Notes from Morningstar re NAB:NAB reported disappointing...

Notes from Morningstar re NAB:

NAB reported disappointing unaudited 1Q12 cash earnings of $1.4bn, up 8% on $1.3bn in 1Q11 and in line with 4Q11. Statutory NPAT is $1.6bn. We expected cash earnings of $1.5bn, but lower net interest margins and higher bad debts in UK banking affected performance. Strong volume growth in both loans and deposits was offset by higher deposit and wholesale funding costs, causing a sharp fall in net interest margins from 2.28% to 2.19%. A positive was revenue growth continuing to exceed expense growth, with positive jaws of 3.8%. A sharp rebound in the bad debt expense to $545m is 30% above the average of the two previous quarters...

Changes see a decline in our profit forecast to $6.0bn and our fair value falls from $32.50 to $31.67....

Lending and deposit volumes underpin solid business momentum and support our adjusted FY12 and FY13 earnings forecasts, with respective EPS growth forecasts of 7.7% and 7.3%. Our full-year dividend forecast eases from 189cps to 185cps based on a 70% payout ratio representing an 8.0%(ff) dividend yield grossing up to over 11%. Based on the current share price around $23.50 the stock trades at a 26% discount to our fair value. Buy.....

Share price down over 5%.



Re MQG:

Guidance from the operational briefing is for FY12 to be 25% lower than FY11 implying NPAT of around $717m. This compares to previous guidance for a lower result or a similar result if the market recovered to 2H11 conditions. The guidance is well below market expectations and our forecast of $889.1m and reflects the continuing weak conditions, particularly for the market facing businesses....

Our valuation falls from $36.08 to $31.64....

We retain our Buy recommendation up to a new trigger price of $26.50 but reiterate that we do not expect the shares to outperform until there is a sustained improvement in market conditions....

What dividend are MQG going to be giving again? Share price rockets up by 6%.