National Australia Bank (NAB): Stay on the road but mind the scenery.

Bell Potter

Stockbroker

NAB’s key 2015 results are: (1) cash NPAT $5,839m (BP $6,259m, consensus $6,256m); (2) cash EPS 234cps [+11%] (BP 255cps, consensus 255cps); (3) final dividend 99cps fully franked (BP 99cps, consensus 99cps); (4) NIM 1.87% (BP 1.91%, consensus 1.91%); and (5) BDD charge $823m (BP $925m, consensus $888m). Price target $35.50, Buy rating maintained. We have lowered cash NPAT across the outer years by ~3%. This reflects weaker overall NIM (lowered by 4bp on a sustainable basis), lower other income (proportional removal of life insurance contributions) and a redistribution of the BDD charge (timing issue). While the price target is slightly reduced to $35.50 (previously $36.00), the Buy rating is unchanged. Concern about the weaker NIM is justified to a certain point but we feel the market has not fully appreciated NAB’s transformation progress to date. The bank continues to move closer to completing its strategic turnaround and a core business ROE milestone of 15% assuming UK demerger and IPO should underpin a healthy re-rating of the bank going forward. Read the report (VIEW LINK)


Bell Potter Securities is a leading Australian stockbroking, investment and financial advisory firm that provides a comprehensive offering of financial services to a diversified client base that includes individuals, institutions and corporations.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.