What happened for the NAB (ASX:NAB) share price in the FY22 first quarter?

It was a busy quarter for the NAB share price…
The post What happened for the NAB (ASX:NAB) share price in the FY22 first quarter? appeared first on The Motley Fool Australia. –

Despite the National Australia Bank Ltd (ASX: NAB) share price succumbing to the “September effect”, the big four banking constituent experienced a relatively strong quarter.

Kicking off the new financial year, the first quarter saw the bank’s share price climb 6.14%.

Meanwhile, the other big four contenders struggled to keep up with the NAB share price during that time. For comparison, Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Grp Ltd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC) added 4.47%, 0.4%, and 0.74% respectively.

Following the strong quarterly performance, NAB shares are now back above their November to February pre-pandemic levels.

Let’s take a look at what had investors so optimistic during the last quarter.

What’s going on with the NAB share price?

NAB’s first quarter of the new financial year (July to September) swung into action with its hefty $2.5 billion share buyback. This capital return was announced at the end of July as part of its effort to stay in its Common Equity Tier 1 (CET1) target range of 10.75% to 11.25%.

Commenting on the buyback at the time, NAB group chief executive officer Ross McEwan said:

Our support for customers and colleagues continues through ongoing lockdowns and as the COVID-19 situation evolves. At the same time, NAB’s strong financial performance, combined with the divestment of MLC Wealth, has created an opportunity for NAB to reduce our surplus capital while retaining a strong balance sheet during these uncertain times.

Thereafter, the NAB share price rose an impressive 11.3% from 30 July before reaching its peak on 6 September. However, the bank made another notable announcement in between these two points in time.

On 9 August, the third-largest Aussie bank revealed an agreement to acquire Citigroup’s Australian consumer business. This entails NAB paying a $250 million premium to the business’s net assets to acquire the Aussie segment of the American investment bank. NAB plans to use the acquired business to deliver on its strategic growth ambition for its personal banking business.

Quarterly update

Another catalyst during the period involved the release of NAB’s quarterly update. The update highlighted an unaudited statutory net profit of $1.65 billion. Meanwhile, cash earnings growth was up 10.3% compared to the prior corresponding period. These positive results were driven by better credit conditions, reducing the level of impairments.

Evidently, investors were pleased with this update as the NAB share price climbed higher for weeks following its release.

Unfortunately, with the weight of the September effect, shares in the bank dragged lower in the last month. Although, shares have rebounded to some extent so far in October. As a result, the NAB share price is fetching $27.70 apiece at the time of writing.

Based on the current price, NAB commands a market capitalisation of $91 billion.

The post What happened for the NAB (ASX:NAB) share price in the FY22 first quarter? appeared first on The Motley Fool Australia.

Should you invest $1,000 in National Australia Bank right now?

Before you consider National Australia Bank, 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 National Australia Bank 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

ASX 200 bank shares fall flat amid flurry of new regulations

3 ASX shares protected from rising inflation and interest rates

Why the ANZ (ASX:ANZ) share price has lagged the ASX 200
How does the Westpac (ASX:WBC) dividend compare to the banking sector?
How did the NAB (ASX:NAB) share price perform in September?

Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia. 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!