National Australia Bank’s third-quarter cash earnings fall 8%, asset quality slips By Reuters

(Reuters) – National Australia Bank reported an 8 percent fall in its third-quarter cash earnings on Friday, hit by increased competition in the mortgage market and higher expenses, while signaling a further deterioration in asset quality its.

The high cost of living further eroded the household

disposable income and their ability to meet loan payments, leading to increased arrears for the bank.

NAB’s NPL ratio to gross loans was 1.31% at the end of June, up 11 basis points from March, reflecting the overall deterioration of its business loan portfolio and higher arrears on its Australian mortgages.

Net interest margin, a key measure of profitability, was stable, with small declines due to lending competition and deposit mix, offset by the benefits of a higher interest rate environment, NAB said.

The country’s top business lender posted cash earnings of $1.75 billion ($1.16 billion) for the quarter ended June 30, compared with $1.90 billion a year ago.

The bank’s Tier 1 ratio — a measure of its cash reserves — was 12.6 percent at the end of the third quarter.

($1 = 1.5131 Australian dollars)