NAB share price lifts amid ‘first for a major Australian bank’

The S&P/ASX 200 Index (ASX: XJO) is on fire on Friday, and the National Australia Bank Ltd (ASX: NAB) share price is no exception.

Despite inflation data from the United States coming in above expectations last night, investors are loading up today. This follows a similar reaction in the US share market overnight, with the Nasdaq composite grinding 2.2% above its previous closing point.

In afternoon trading, shares in one of Australia’s largest banks are humming along. At present, the NAB share price is firming up by 1.8% to $31.15 apiece.

The positive move is somewhat perplexing. Let’s delve into why might NAB shares — and other ASX 200 banks — be responding swimmingly to the latest economic data.

What’s the silver lining for the NAB share price?

For households, the latest US inflation data is not a pleasing sight by any measure. The stubbornness of living costs means more interest rate hikes are likely on the agenda of central banks. However, for banks, it could mean a further thickening of the bottom line.

Earlier in the week, the Bank of Queensland Limited (ASX: BOQ) surprised the market with a solid full-year result for FY22. Most notably, the bank’s exiting net interest margin (NIM) was 1.81%, tracking above its second-half average of 1.75%.

Many of us have seen this firsthand, unfortunately. Upon the Reserve Bank of Australia (RBA) announcing a cash rate increase, banks have been quick to action increases to loans, but slow to pass on higher rates to savers — the latter normally being only partially increased.

Hence, with the latest US data suggesting more rate hikes to come, Aussie investors could be anticipating improved margins across all ASX 200 bank shares, including NAB. Whether that actually plays out also depends on default rates and the level of competition between lenders.

Another feather in this ASX 200 bank’s cap

In other news, NAB has announced the launch of a new payment technology of its own today dubbed NAB Easy Tap.

According to the press release, the Australian first for a major bank will allow small businesses to accept contactless payments from customers via an eligible android mobile phone or tablet.

The capability comes after Apple Inc (NASDAQ: AAPL) announced its own ‘Apple Tap to Pay‘ earlier in the year, as payment processing becomes more mobile-centric.

Furthermore, NAB’s offering will remove the need for a small business to buy or rent a separate payment terminal.

The NAB share price is up more than 6% so far this year, while the broader benchmark has endured a near 11% blow.

The post NAB share price lifts amid ‘first for a major Australian bank’ appeared first on The Motley Fool Australia.

More reading

• Top broker says ‘we struggle to see CBA underperforming peers’. Here’s why
• Why are ASX 200 bank shares having such a top run on Thursday?
• Why is the NAB share price having such a stellar run today?
• Why investors were looking on the bright side for ASX 200 bank shares today
• What’s the outlook for ASX 200 bank shares in Q2?

Motley Fool contributor Mitchell Lawler has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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