Shares in Australia's largest business bank have rallied on better-than-expected earnings, but global trade tensions still hang like a cloud over the global economy.
National Australia Bank posted cash earnings of $3.6 billion for the half-year ended March, up one per cent from the same period in 2024 and pipping expectations.
Markets responded well to the figures, pushing NAB shares up as much as four per cent higher before easing to $35.91, a 1.7 per cent gain by lunchtime.
"We're managing our business well in continued challenging conditions, delivering higher cash earnings and return on equity," chief executive Andrew Irvine told investors and reporters at an earnings call.
"NAB's balance sheet settings remain strong, enabling us to support our customers through the cycle."
The result was helped by 4.1 per cent growth in corporate and institutional banking earnings to $909 million, up from $873 million in the previous half.
"Corporate and institutional banking is the stand-out performer, with an underlying profit growth of seven per cent, half-on-half," chief financial officer Shaun Dooley said.
"This has been led by revenue with strong growth and higher markets income."
Cash earnings from personal banking fell 6.8 per cent in the half to $576 million, but still an improvement on the equivalent 2024 half's $556 million.
Mr Irvine said a disciplined approach to cost management and Australia's relatively favourable economic position would leave NAB well-placed to weather the storm wrought by US-led tariffs and trade conflicts.
"Economic growth improved in the second half of '24, driven by a rebound in household consumption, " he said
"Easing inflation, tax cuts and declines in the cash rate are expected to support growth in household incomes over the balance of 2025."
Mr Irvine said managing well despite continuing challenging market conditions.
"Our environment remains challenging, and there is significant uncertainty in that global economic outlook," he said.
The bank is giving a 42.5 per cent weighting to "the downside economic scenario" in light of global trade uncertainty and while direct impacts of US tariffs would likely be minimal, any global slowdown would impact local business and consumer sentiment.
"You don't have to go back five or six weeks to remember the world was a scary place," Mr Irvine said.
"We're still not through that and that hasn't fully played out, so we just wanted to make sure out setting were prudent going into the future with that level of uncertainty."
In the latest twist in the ongoing trade saga, White House officials have announced long-awaited tariff negotiations with Beijing officials will begin later this week in Switzerland.
NAB declared an interim dividend of 85 cents per share, up one cent on last year's payout.
The bank's result was slightly better than Westpac's, which on Monday, posted first-half earnings of $3.3 billion, down one per cent, and an interim dividend of 76 cents.
Westpac shares have slipped more than six per cent in the wake of the results, which undershot investor expectations.