Why did the NAB (ASX:NAB) share price struggle in November?

What went wrong for the bank’s shares last month?

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The National Australia Bank Ltd (ASX: NAB) share price has failed to continue its upwards trajectory in November.

The banking giant’s shares dropped around 5% over the course of last month following the company’s FY21 results.

In comparison, the S&P/ASX 200 Index (ASX: XJO) also ended November in the red, shedding 1.56% over the same time frame.

And NAB wasn’t the only ASX 200 financial share to suffer in November.

The Commonwealth Bank of Australia (ASX: CBA) share price dived around 10% last month, while Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) sank 14% and 5%, respectively.

Let’s take a look at what might have weighed on NAB shares recently.

What happened to NAB in November?

The NAB share price finished lower than it started last month, dragged down by weakened investor sentiment.

Regardless of the company registering a mostly positive set of numbers in its FY21 scorecard, it appears the market expected a slightly better result.

The bank achieved cash earnings from continuing operations of $6,558 million, reflecting a 76.8% increase over the prior corresponding period. However, Australian investment house Morgans had estimated NAB to report cash earnings from continuing operations of $6,597 million in FY21.

This saw investors backtrack on NAB shares by 0.76% to $28.99 on the day.

Looking ahead, management noted that a pick-up in activity was forecasted as lockdowns begin to ease. NAB predicts its net interest margin to improve in FY22, before turning positive the following financial year.

Furthermore, the bank anticipates that lower funding costs and a favourable deposit mix will support profit growth.

NAB share price summary

Despite recording a negative performance, the NAB share price has risen by 20% in 2021.

Its shares reached a 52-week high of $30.30 after the release of its FY21 results before investors sold it down. It’s worth noting that even at today’s prices, the company’s shares are trading are pre-COVID-19 levels.

NAB commands a market capitalisation of roughly $90.32 billion, making it the fourth-largest company on the ASX.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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