{"id":66634,"date":"2026-08-16T18:38:14","date_gmt":"2026-08-16T22:38:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/nab-posts-a1-83b-q3-profit-a2-milk-earnings-tumble-44\/66634\/"},"modified":"2026-08-16T18:38:14","modified_gmt":"2026-08-16T22:38:14","slug":"nab-posts-a1-83b-q3-profit-a2-milk-earnings-tumble-44","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/nab-posts-a1-83b-q3-profit-a2-milk-earnings-tumble-44\/66634\/","title":{"rendered":"NAB Posts A$1.83B Q3 Profit; a2 Milk Earnings Tumble 44%"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>National Australia Bank (<a href=\"\/stock\/NAB\">NAB<\/a>)<\/strong> reported a <strong>Q3 cash profit of A$1.83 billion<\/strong>, maintaining a steady <strong>Net Interest Margin (NIM) of 1.8%<\/strong> despite a softening home lending market.<\/li>\n<li><strong>The a2 Milk Company (<a href=\"\/stock\/A2M\">A2M<\/a>)<\/strong> saw full-year net profit <strong>plummet 44% to NZ$113.6 million<\/strong>, primarily due to severe supply chain disruptions for its <strong>China-label infant formula<\/strong>.<\/li>\n<li><strong>New Zealand&#39;s Services Index (PSI)<\/strong> remained flat at <strong>50.6 in July<\/strong>, indicating a tentative and narrowly based expansion as the sector struggles with weak employment and cautious consumer spending.<\/li>\n<li><strong>NAB<\/strong> is aggressively targeting <strong>productivity savings of over A$450 million<\/strong> for FY26, aiming to keep operating expense growth below the <strong>4.6%<\/strong> seen in the previous fiscal year.<\/li>\n<li><strong>The Australian home lending market<\/strong> showed signs of cooling in Q3 2026, with <strong>NAB<\/strong> reporting a <strong>15% decline in home loan applications<\/strong> compared to the prior quarter.<\/li>\n<\/ul>\n<h2>NAB Navigates Softening Housing Market with Cost Discipline<\/h2>\n<p>National Australia Bank (<a href=\"\/stock\/NAB\">NAB<\/a>) delivered a resilient third-quarter performance, posting <strong>cash earnings of A$1.83 billion<\/strong>. The bank&#39;s <strong>Common Equity Tier 1 (CET1) ratio<\/strong> stood at a robust <strong>11.9%<\/strong>, while its <strong>non-performing exposures-to-GLAS ratio reached 1.50%<\/strong>. Despite these solid figures, the bank noted that the <strong>Australian home lending market softened<\/strong> during the period, reflecting broader economic pressures on households.<\/p>\n<p>To counteract revenue headwinds, CEO Andrew Irvine emphasized a rigorous focus on efficiency. The bank remains on track to achieve <strong>productivity savings exceeding A$450 million<\/strong> by the end of FY26. Management has committed to keeping <strong>FY26 operating expense growth below the 4.6%<\/strong> recorded in FY25, even as it continues to invest in technology and simplification initiatives.<\/p>\n<h2>Supply Chain Woes Hit a2 Milk Bottom Line<\/h2>\n<p>The a2 Milk Company (<a href=\"\/stock\/A2M\">A2M<\/a>) reported a sharp <strong>44% decline in full-year net profit<\/strong>, falling to <strong>NZ$113.6 million<\/strong>. The downturn was largely attributed to a <strong>14% drop in China-label infant milk formula (IMF) sales<\/strong>, which fell to <strong>NZ$544.3 million<\/strong>. Supply chain bottlenecks and production backlogs left key products out of stock, forcing many customers to migrate to competing brands.<\/p>\n<p>While the statutory figures were disappointing, the company\u2019s <strong>underlying NPAT actually rose 7% to NZ$235.8 million<\/strong> when excluding one-off items. Revenue for the year grew <strong>12.4% to NZ$1.97 billion<\/strong>, supported by strong performance in <strong>English-label IMF<\/strong> and liquid milk in the U.S. and Australia. Management stated that the supply issues have now been largely resolved, with a focus shifting to winning back market share in China.<\/p>\n<h2>New Zealand Services Sector Stagnates<\/h2>\n<p>The <strong>BNZ-BusinessNZ Performance of Services Index (PSI)<\/strong> held steady at <strong>50.6 in July<\/strong>, matching the previous month&#39;s reading. While any figure above 50 indicates expansion, the current level suggests the recovery is <em>tentative and fragile<\/em>. The <strong>employment sub-index remained in contraction at 48.5<\/strong>, marking its 32nd consecutive month below the break-even mark.<\/p>\n<p>Industry analysts noted that the expansion is &quot;narrowly based,&quot; with sectors exposed to discretionary spending, such as hospitality, continuing to struggle. High cost-of-living pressures and elevated fuel prices have kept New Zealand consumers cautious. However, when combined with a stronger <strong>Performance of Manufacturing Index (PMI)<\/strong>, the data suggests annual GDP growth could trend toward <strong>2.0%<\/strong> in the coming months.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways National Australia Bank (NAB) reported a Q3 cash profit of A$1.83 billion, maintaining a steady Net Interest Margin [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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