The financial damaged caused by the coronavirus pandemic to the National Bank of Australia has been revealed with nearly 10 percent of its customers to confirm if they will be able to resume loan repayments.
The major bank reported cash earning of $3.7 billion, which fell 36.6 percent compared to last year as stated in the financial results for the 2020 financial year on Thursday.
Recent rate cuts by the Reserve Bank would place downward pressure on NAB’s revenue due to an expected reduction in interest income from loans, says NAB chief executive Ross McEwan.
“Our operating environment is evolving through the ongoing challenges and uncertainties associated with COVID-19,” Mr. McEwan said.
Those who have accessed loan deferral support due to the pandemic confirmed they will be able to resume repayments following the tapering of the scheme. Roughly 90 percent of home and business customers have confirmed this.
Mr. McEwan said a small portion of customers that had accessed help would likely need ongoing support well into 2021.
“We don’t know yet at this stage those customers … are resuming or whether they will be able to,” he said. “We won’t know that for at least the next three months.”
The profit of National Bank of Australia was $2.6 billion for the 12 months ending in September 30.
The head of Australia’s largest business bank added that stimulus packages were supporting the economic recovery.
“While economic activity has been materially impacted, the significant stimulus for households and businesses provided in the federal budget, combined with an expected more complete reopening of domestic state borders, provide a bridge to economic recovery as support is reduced,” Mr. McEwan said.
Credit Suisse investment analysts said the results were in line with their predictions, with the amount of bad debts 4 percent lower than anticipated.
Credit impairment charges of $2.76 billion have also dragged down the bank’s performance. It has also set aside $1.86 billion in provisions relating to the pandemic.
NBA’s expenses rose 10.7 percent, primarily related to costs associated with its operational overhaul strategy.
Mr. McEwan noted additional costs during the year had been primarily associated with the pandemic, particularly in moving more than 90 percent of the bank’s staff to remote working.
In the daily charts of AUD/USD, the pair fell early Friday morning in Sydney session.
The pair broke past the resistance level at 0.72431 on Thursday and gave up some of its gains on Friday morning. Traders are waiting for a pull back from a later session upon bouncing from the resistance level at 0.72431 turned support. Once the pullback has been confirmed, further upward movement can be seen as dollar weakens due to the uncertainty of the U.S. Presidential Elections.
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