National Australia Bank's cash profit rose circa 47% versus last year and was this was circa 19% ahead of Morgan Stanley's forecast due to lower loan losses. Pre-provision profit was circa 1.5% above the broker's estimate due to better expenses.

The bank considers its performance sound with momentum continuing to build up. The broker believes the bank's circa $110bn SME portfolio should benefit from the improvement in general business conditions and confidence

Australian loan growth is expected to be circa 2.5% in FY21 and circa 4% in FY22.

Equal-weight rating with the target rising to $25.30 from $24.50. Industry view: In-line.

Sector: Banks.

Target price is $25.30.Current Price is $25.63. Difference: ($0.33) - (brackets indicate current price is over target). If NAB meets the Morgan Stanley target it will return approximately -1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena