A previous poster mentioned CBA. I am sure everyone knows CBA has a different financial year to the other 3. They pay their divs on the half year ending Dec & June. The $2 Div paid end March was from half year end Dec 2019 with all out of they way before Covid issues. They subsequently reduced Div payable end Sep based on the (credit impaired) half year end June '20 (also with the benefit of longer trading period during the pandemic).
NAB pays Divs on Half years ending March and September.
Last Div was 30c which was a 61% payout ratio on half year results ending 31/3/20 coupled with a cap raise to improve capital ratios. (Normally NAB payout ratios much higher!)
The payout ratio was significantly reduced however the actual profit figure was also significantly reduced due to very large B&DD provisions. The 3rd quarter (06/20) has already shown a much improved profit figure as provisions reduced from the March Qtr high.
In very simplistic and rough estimate terms I would expect NAB to ann a half year NP somewhere between $2.5 to $3b. Should not need to increase capital too much however I would expect it will be some time before they return to previous levels of payout (if ever)
So, assuming they can justify a (conservative) 60% payout ratio it is reasonable to expect a 50 to 60c Div next half - will be very much dependent on maintaining capital ratios.
How this plays out in the SP is of course subject to market sentiment, however little doubt investment return expectation is lower across the board and even this level of Dividend will be attractive to many at higher prices than current SP. Not hard to see a return to low to mid $20's, however market may be jittery until it is evident that the banks have booked sufficient provisions for the looming bad debts and that our economy does not contract further.
Any further bad news will certainly work against an improving SP and of course NAB won't be excluded from any general market meltdown or malaise!!
The actual level of B&DD will no doubt play out over the next year or so, however hopefully NAB will not need to replicate the large provisions booked in March qtr.
All the above is not meant to be a detailed analysis, more broad brush, back of envelope type musings and personal opinion.
Not intended as any sort advice.
NAB Price at posting:
$18.08 Sentiment: None Disclosure: Held
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