NAB housing lending revenue continues to drop, and shareholders pay the price
NAB's housing lending revenue has dropped for a second year in a row, and shareholders have seen their dividends drop.
The bank, still feeling the pinch from the banking royal commission, has slashed its dividends by 16 percent, from an unsustainable 99 cents a share to 83 cents.
NAB posted $2.7 billion profits, 4.3 percent up from the same period a year ago.
NAB chief executive Philip Chronican said in a statement that the decision to cut the dividend was difficult.
"We have to trade off the fact that our shareholders really rely on that dividend for income, but we need to also make sure that we've got a strong bank," Chronican said.
NAB's housing lending revenue is now $250 million less than it was in September 2017, when the national housing market began its downturn.
It is around $200 million less than this time last year, with steadily declines over the last four half yearly result announcements.
The bank have however managed to reduce their interest only loan book, but it still sits at a relatively high 26.5 percent.
There was a spike in the second half of 2017, where $9.2 billion of interest only loans were converted to principal and interest.
In the first half of 2019 there were $7.9 billion of IO loans moved to P&I.
Of the 26.5 percent, eight percent are owner-occupier interest only loans, with 18.5% made up of investor interest only loans.
Over half of their loan book is made up of owner occupier principal and interest loans.
It was reported yesterday ANZ only have 18% of their loans as interest only.
In April NAB introduced a debt-to-income decline threshold of 9x.
Three percent of NAB's portfolio now has dynamic LVR over three percent.
Click here to enlarge.
