There are many Defensive Stocks with a growth story to tell. And when the returns get laced with dividends, they easily outdo the contemporaries.
One such stock is National Australia Bank Limited, which has grown from a price near $29.0 a year ago, to $38. 28 in the latest session. The stock not only grew 32% but also returned $0.84 cents twice as fully franked dividends.
National Australia Bank Limited (ASX: NAB)
National Australia Bank Limited (ASX: NAB) recently released its trading updates for the third quarter of the fiscal year 2024, concluding on 30 June 2024.
During this period, lending balances experienced a 1% increase over the June quarter, bolstered by a 3% rise in Australian small and medium-sized enterprise (SME) business lending, as the bank continued to emphasize the expansion of its SME sector.
In contrast, growth in Australian home lending was modest at 1%. The bank recognized the necessity of balancing returns with growth in this fluctuating market.
Deposit growth remained a key area of focus, achieving a 1% increase across both Business & Private Banking and Personal Banking during the third quarter of 2024.
Revenue saw a decline of 1%. However, when excluding Markets & Treasury (M&T) income, revenue increased by 1%, driven by volume growth and an uptick in other operating income, including fees from business lending.
The net interest margin (NIM) remained stable, with slight reductions attributed to competitive lending conditions and changes in deposit composition, which were counterbalanced by advantages stemming from a higher interest rate environment. There was no impact on NIM from M&T and liquid assets.
Expenses rose by 1%, primarily due to increased salary-related costs, although this was partially mitigated by productivity gains.
The company places considerable emphasis on achieving cost reductions throughout its operations, leading to the ongoing implementation of various initiatives designed to enhance efficiency. Significantly, the company aims for productivity savings of around $400 million in fiscal year 2024, which is anticipated to contribute positively to its financial performance.
NAB has demonstrated a Strong Financial Growth trajectory, achieving an increase in revenue from $18.2 billion in 2019 to $21.3 billion in 2023. Concurrently, its earnings have risen from $5.9 billion to $7.4 billion. This growth is supported by an expanding portfolio of loans and earning assets, alongside a solid capital position, as evidenced by a capital adequacy ratio that has consistently surpassed 15% over the past five years, reaching 19.8% at the conclusion of FY23. These factors collectively underscore the company's potential for continued and stable financial growth in the future.
Source: Company’s Report
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