The National Australia Bank Ltd (ASX: NAB) share price has been a very impressive performer on Friday.
In afternoon trade the banking giant's shares are up 10% to $16.10.
Why is the NAB share price storming higher?
There have been a couple of catalysts for today's strong share price performance.
The first is a broker note out of Credit Suisse this morning. According to the note, the broker has upgraded NAB's shares to an outperform rating with a trimmed price target of $19.50.
The broker made the move on valuation grounds. It appears to still sees a lot of value in the bank's shares even after factoring in lower earnings, higher bad debts, and dividend cuts.
What else is supporting its shares?
In addition to this, this morning NAB announced a sweeping support package for business and personal customers in response to the coronavirus outbreak.
According to the release, business customers experiencing financial difficulty can defer their payments on a range of floating and variable rate business loans for up to six months.
NAB, which is Australia's largest bank for businesses, advised that it will also cut 200 basis points from the rate on new loans and all overdrafts on its flagship digital business product QuickBiz. This will be effective March 30.
Furthermore, it will reduce variable rates on small business loans by 100 basis points. This is on top of the 25 basis point reduction that it announced on March 13.
In respect to personal customers, home loan customers that are experiencing financial challenges will also be able to pause their repayments for up to six months.
NAB has also announced reductions of up to 60 basis points to fixed rate home loans to give customers the option of added certainty. There are no changes to home loan variable rates.
For depositors, the bank has introduced a 10-month term deposit rate of 1.75% per annum in recognition that this low interest rate environment is hurting savers. This follows a similar move by Commonwealth Bank of Australia (ASX: CBA) on Thursday.
Overall, the bank estimates that this package could inject over $10 billion into the economy over six months, or $380 million a week, depending on customer needs and take-up.
An unprecedented situation.
NAB CEO Ross McEwan said: "Our focus is clear – to support our business and personal customers with their financial needs when they need it most. These measures will provide significant relief to businesses and homebuyers over the next six months as we all deal with this unprecedented situation."
"Businesses in particular need help and they need it now, so we have come through with a range of measures. This support will provide cash flow relief so they can stay open, and keep people in jobs."
"One third of Australia's small to medium businesses bank with NAB and we are going to be there for them. "The changes also offer our home loan customers the option to fix their rate at our lowest rate ever, or pause payments to help ease financial pressures," he added.
