NAB share price up amid following the leader on cashbacks

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share priceA man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price

The National Australia Bank Ltd (ASX: NAB) share price is up 0.17% to $26.42 amid news the big four bank will be ending generous cashback offers on new and refinanced loans.

As reported in The Australian, NAB is following the lead of Commonwealth Bank of Australia (ASX: CBA) in ceasing its $2,000 cashback offer on 30 June.

CBA is ending its own $2,000 offer for new loans and refinance loans on 31 May.

Why is the cashback offer ending?

The move follows NAB’s half-year results last week which fell short of expectations.

NAB revealed a net interest margin (NIM) of 1.77%, which was short of Goldman Sachs’ expectations of 1.83%.

The ASX 200 bank also reported an 11.6% increase in expenses during the half.

Cash earnings went up by 17% to $4,070 million but this was lower than consensus estimates of $4,151 million.

As my Fool colleague James points out, the results appear to indicate that NAB’s NIM has peaked sooner than expected.

So, it’s not surprising to see the bank dumping cashbacks, given these are traditionally expensive methods of attracting new customers.

The report quoted NAB CEO Ross McEwan, who said intense competition between the banks for a smaller number of loans had resulted in NAB selling some loans at “sub cost of capital”.

McEwan said he would make “deliberate choices about … where to pull back”.

Is the NAB share price a buy?

ASX 200 bank shares have had a tumultuous time of late.

The collapse of a couple of United States banks and the forced takeover of Credit Suisse by UBS has rattled markets and bank share prices around the world have fallen.

Thus, today’s NAB share price may present a buying opportunity for some investors.

Here’s what has happened to the big four ASX 200 bank shares over the past two months:

  • The Westpac Banking Corp (ASX: WBC) share price has tumbled 9.9%
  • The Commonwealth Bank of Australia (ASX: CBA) share price has fallen 9.5%
  • The National Australia Bank Ltd (ASX: NAB) share price has dropped 8.7%
  • The ANZ Group Holdings Ltd (ASX: ANZ) share price has dipped 3.6%

Another Fool colleague, Tristan, has outlined his reasoning for calling NAB a buy at today’s share price.

The post NAB share price up amid following the leader on cashbacks appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Bronwyn Allen has positions in Anz Group, Commonwealth Bank Of Australia, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

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