National Australia Bank Ltd (ASX: NAB) shares are on the move on Thursday.
In morning trade, the banking giant's shares are down almost 2% to $43.67.
This follows the release of its FY 2025 results before the market open.
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NAB shares fall on results day
Investors have been selling the bank's shares today after it reported a decline in cash earnings for FY 2025.
For the 12 months ended 30 September, NAB delivered a 2.9% increase in revenue. Management notes that this reflects volume growth and higher Markets & Treasury (M&T) income, which were partially offset by higher customer-related remediation charges and the impact from business disposals and run-offs.
Excluding M&T income, revenue rose 1.4% over the year and increased 4.3% in the second half compared with the first half.
However, NAB's expenses increased quicker than revenue and were up by 4.6% in FY 2025. This includes $130 million related to payroll review and remediation charges.
Excluding its payroll review and remediation charges, expenses rose 3.2%. This reflects higher personnel and technology related costs, partially offset by productivity benefits and lower costs relating to its enforceable undertaking with AUSTRAC.
This ultimately led to cash earnings coming in at $7,091 million for FY 2025. This was down 0.2% on the prior corresponding period and is short of the consensus estimate $7,183 million.
Despite the softer earnings, NAB has followed the lead of Westpac Banking Corp (ASX: WBC) by increasing its dividend by 1 cent to 170 cents per share. This comprises an interim dividend of 85 cents per share and a final dividend of 85 cents per share. Based on yesterday's close price, this equates to a dividend yield of 3.8%.
Commenting on the bank's performance, NAB's CEO, Andrew Irvine, said:
NAB has delivered a 1% lift in underlying profit in FY25. This reflects good momentum, particularly over 2H25, as we execute the first year of our refreshed strategy while maintaining prudent balance sheet settings. Cash earnings were broadly stable over the year. While credit impairment charges increased, pleasingly a number of key asset quality outcomes improved over 2H25, consistent with a supportive Australian economic environment.
Irvine appears cautiously optimistic on the bank's outlook. He adds:
We remain optimistic about the outlook. NAB has a clear strategy and we are well placed to manage our bank for the long term and deliver sustainable growth and returns for shareholders.
