Insights

The NAB (ASX:NAB) share price is underperforming its big four peers so far today

The NAB share price is underperforming in the big banking sector today.
The post The NAB (ASX:NAB) share price is underperforming its big four peers so far today appeared first on The Motley Fool Australia. –

The National Australia Bank Ltd (ASX: NAB) share price is currently underperforming compared to the other big four ASX banks. NAB shares are currently up just 0.2%.

That compares to the Commonwealth Bank of Australia (ASX: CBA) share price being up 0.9%, the Westpac Banking Corp (ASX: WBC) share price being up 0.7% and the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price being up 0.8%.

NAB changes interest rates

According to reporting by a few organisations, including RateCity, NAB has decided to increase some of its fixed rates.

This is apparently the second time that NAB has increased its fixed rates in recent months.

The 3-year rate was reportedly increased by 0.1 percentage point to 2.18%. Next, the four-year rate was hiked by 0.25 percentage points to 2.49% and the 5-year rate was increased by 0.30 percentage points to 2.79%.

RateCity.com.au research director, Sally Tindall, noted:

Governor Lowe has made it clear rates will not rise until at least 2024. As a result, many banks are still hiking rates of three years and over, however, cuts to two-year rates have slowed.

NAB has been careful to keep its two-year fixed rate under 2 per cent. Without this rate the bank could struggle to keep new customers coming in the door in what remains an ultra-competitive market.

These fixed rate hikes won’t impact how much someone can borrow, as banks base serviceability tests on the revert rate. However, they do serve as a reminder these rates aren’t going to stick around forever.

‘Liar loans’ in focus

Loan applications are also in focus this week after it emerged in UBS’ annual survey that there was a record number of so-called liar loans over the last 12 months. The survey showed that 41% of those applications “were not completely factually accurate”.

Time will tell whether this has any bearing on profit or the NAB share price.

The things that people were not truthful about included not disclosing all of their living costs, not giving the bank a full picture of their liabilities and overestimating their income.

Commenting on the higher levels of debt that people were taking on compared to their income, UBS wrote:

Amid home prices booming 18.3 per cent year-on-year (highest since 1989), we think borrowers are ‘chasing the market’ and stretching towards their capacity limit to be able to qualify.

NAB share price valuation snapshot

Over the last 12 months the NAB share price has risen by almost 65%.

At the current NAB market capitalisation and using the estimated on Commsec, the bank is priced at around 15x FY22’s estimated earnings.

The major bank is projected to pay an annual dividend of $1.32 per share in FY22, which would translate to a grossed-up dividend yield of 6.7%.

Broker Credit Suisse currently rates NAB shares as a hold, with a price target of $28.50. Credit Suisse believes that its improved performance is reflected in the current valuation.

The post The NAB (ASX:NAB) share price is underperforming its big four peers so far today appeared first on The Motley Fool Australia.

Should you invest $1,000 in NAB right now?

Before you consider NAB, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Could liar loans crash the housing market?

How has the NAB share price performed since reporting results

How these 4 ASX 200 bank shares have performed since reporting results

ASX 200 midday update: Pilbara Minerals jumps, bank shares fall

The CBA (ASX:CBA) share price is underperforming its big four peers today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!