Squid on NAB

Goldman is out with a quick take on what looks like a less stellar if still good bank result:

• Company cash earnings of A$2,915 mn vs. GSe A$2,952 mn and consensus A$2,885 mn. PPOP of A$5,274 mn was 2% below our expectations broadly on weaker-than-expected revenue. BDDs were slightly better than expected at 96 bp on non-housing loans vs. GSe. Interim DPS of A93¢ vs. GSe / consensus A92¢.
• Signs of improvement in asset quality with new impaireds down 23% hoh and 4% yoy
• UK CRE portfolio down from £5.6bn in Oct-12 to £5.0bn in Mar-13 and management noted while deterioration has continued, it has slowed.
• We note headline margin looks weak but there was an A$151 mn transfer between net interest income and trading non-interest income. Adjusting for this, margin was 1bp ahead of our expectations.
• The trading result itself was strong but driven by sales rather than trading and treasury, which was up 5% yoy and 35% hoh. Treasury and balance sheet income was flat yoy and down 34% hoh.
• Basel III CET1 ratio of 8.22% was ahead of our expectations (8.03%) and represented 32 bp of capital generated in the half.