NAB doubles dividend after profits soar to $6.5b; vows to cut fossil fuel financing

National Australia Bank has doubled its final dividend after reporting soaring full-year cash earnings alongside the release of a new oil and gas policy that aims to phase out exposure to the sector over the next two decades.

Full-year cash earnings increased 76.8 per cent to $6.5 billion in the year to September 30, which chief executive Ross McEwan said showed the bank “navigated a challenging environment” during COVID-19 while delivering better services for customers.

NAB has unveiled a new oil and gas policy. Credit:

NAB shareholders will receive a final dividend of 67 cents per share, up from 30 cents paid last year, taking the full-year dividend to $1.27 a share, the bank said in a statement on Tuesday morning.

While NAB’s revenue declined by 2.2 per cent over the past financial year, the bank reported 6 per cent overall growth in loans, with a 7 per cent rise in business lending and 4 per cent in mortgage growth in what Mr McEwan said cemented the bank’s leading position in business lending.

The bank’s headline figures were also driven by falling expenses and a reduction in the provision for bad loans by $217 million, which is a major swing from the $2.8 billion charge the same period last year. The credit impairment write-back reflects the improving asset quality across both housing and business lending, NAB said.

Alongside the results, NAB unveiled a new policy on financing oil and gas companies. The bank pledged to align funding with the International Energy Agency’s recent report that declared no new fossil fuel projects could be funded if economies are to reach net zero emissions by 2050.

NAB said it had capped its oil and gas exposure at $US2.4 billion ($3.2 billion), and will reduce this stake over the next two decades. As part of the new policy, NAB said it will only consider directly financing gas extraction projects in Australia “where it plays a role in underpinning national energy security”.

More to come.

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