NAB profit rises 18% in first quarter, Macquarie warns on global outlook: Economy Roundup

NAB has reported an 18% rise in first-quarter profit due to lower amounts of bad debt, but the company has also warned that funding costs are still high.

Cash profit rose from $1.1 billion in the same period last year to $1.3 billion, well ahead of analysts’ expectations of $1.23 billion. It also reported a Tier 1 ratio of 8.96%.

Chief executive Cameron Clyne said in a statement the company is trying to keep rates low by erasing a number of fees, and also said support for SMEs will drive much of NAB’s growth.

“Business banking continues to gain market share and extend its leadership position in small-to-medium enterprise banking in what remains a subdued business credit environment,” he said.

“We’ve maintained momentum in our core businesses, we’ve performed well relative to our peers, in all of our markets,” he added.

Market share in home loans grew by 31 basis points to 13.6%, and the share of business banking grew by just under one percentage point to 23.8%.

“We have a strong balance sheet that is able to handle the impact of Basel III proposals and take advantage of higher system growth and we have positioned the bank exceptionally well to absorb political intervention,” Clyne said.

Cochlear profit up 16% in first half

Cochlear has reported a 16% increase in first half net profit with sales also rising 8% as the company’s new Nucleus 5 implant has been met with positive results.

Net profit rose to $87.2 million for the six months ending December 31, beating expectations for a result of $83.6 million.

“Cochlear is strategically well positioned for long-term sustainable growth, and the outlook remains positive,” Cochlear said in a statement. “There is a significant unmet clinical need for Cochlear’s products, leading to ongoing demand from the emerging and developed markets.”

“Continued investments in capacity, resources and capabilities together with an exciting new product pipeline will underpin and drive this long-term growth.”

Australian shares flat despite solid Wall Street result

The Australian sharemarket has opened flat this morning despite a solid result on Wall Street, where stocks have reached two-and-a-half year highs.

The benchmark S&P/ASX200 index was up 14 points or 0.3% to 4883.2 at 12.15 AEST, while the Australian dollar managed to stay above parity at $US1.01.

AMP shares lost 0.2% to $5.55 as Commonwealth Bank shares gained 0.5% to $53.75. ANZ rose 0.8% to $24.44 as Westpac rose 0.5% to $23.51.

Macquarie warns on global conditions

Macquarie has said its second half profit will be up 35% for the first half but earnings will be down by 5% due to volatile market conditions.

Chief executive Nicholas Moore has said global conditions are still shaky and that the bank’s primary business, Macquarie Securities, was still being affected. A good full-year performance would depend on how global conditions pan out.

“In the full year we would expected to see few one-off items, the compensation ratio will remain at historically average levels,” Moore said. “And we would expect to see some of the capital on the balance sheet put to work.'”

Brambles buys container company

Pallet supplier Brambles has purchased American company Container and Pool Solutions for $US15.4 million from LF Capital Partners.

In a statement, Brambles said CAPS will help the company’s pooling business and “support our global network and our access to intercontinental product flows”.

The CAPS leadership team will remain in place, the company said.

Wall Street shares reach two-and-a-half year highs

Stocks on Wall Street have reached their highest point in over two years after a string of solid financial results and major merger announcements.

The Dow Jones industrial average was up 69.40 points, or 0.57%, to 12,161.55.