Mortgage holders tipped to get much-needed relief: NAB boss

[Pelican Press 0]

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Mortgage holders tipped to get much-needed relief: NAB boss

National Australia Bank boss Andrew Irvine says a combination of a stable government and falling interest rates will help guide the *********** economy as he reiterates calls for the cash rate to drop to 2.6 per cent by early 2026.

In welcome news for homeowners, the NAB chief executive used his half-yearly results to talk up the strength of the *********** economy while also calling for further support for households.

Camera IconNAB predicts RBA governor Michele Bullock will announce an outsized rate cut. NewsWire / Nikki Short Credit: News Corp Australia

“There’s no doubt these are challenging times, there’s all sorts of geopolitical uncertainties that we have to manage,” he said.

“That being said, Australia is in good shape. We enter this ******* of instability in a strong position.

“We have unemployment that’s very low, I believe we will see three or four base-rate reductions that will stimulate the domestic economy.”

Mr Irvine said global trade uncertainty from US President Donald Trump’s trade tariffs remained a key source of risk going forward for the *********** economy and reiterated calls for the cast rate to drop.

“The sound starting position of the *********** economy provides scope for a more stimulatory monetary policy response to support the recovery against potential headwinds, with the cash rate now forecast to decline from 4.1 per cent currently to 2.6 per cent by February 2026,” he said.

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The Reserve Bank of Australia began its rate-cutting cycle in February, reducing the cash rate by 25 basis points from 4.35 per cent to 4.10 per cent. It held interest rates during its April meeting but is widely expected to cut on May 20.

NAB economist Sally Auld on Tuesday said the RBA would cut the cash rate by 50 basis points in May, followed by 25 basis point cuts in July, August, November and February.

The major bank is expecting five cuts in this rate-cutting cycle, with the central bank needing to “catch up” with recent global developments.

This would take the cash rate down to 2.6 per cent and shave an estimated $526 off monthly repayments for the average $600,000 loan.

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NAB announced on Wednesday that its cash profit rose to $3.58bn for the six months to March 31, beating forecasts of cash earnings of $3.47bn and up 1 per cent on the prior corresponding *******.

But NAB said its net interest margin, a key metric of profitability, slipped 2 basis points from the March 2024 half to 1.7 per cent.

NAB’s interim dividend of 85 cents puts $2.6bn back in the hands of shareholders.

Mr Irvine said the *********** economy would also have the added benefit of a re-elected Labor government.

“If I look ahead, I think the recent election results are good for Australia. They bring stability, they bring consistency and they provide the Labor government with a clear mandate to drive the policies that we need in this country to support further economic growth,” he said.

NAB’s results follow rival big four bank Westpac, which announced a worse-than-expected result on Monday.

For the six months ending March 31, the bank’s net profit after tax fell 1 per cent to $3.3bn.

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