News: NAB UPDATE 1-National Australia Bank Q1 profit flat as low interest rates offset by lower...

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Feb 16 (Reuters) - National Australia Bank Ltd (NAB) on Tuesday said its first-quarter cash profit was flat versus a year ago, as the impact of sustained record-low interest rates were offset by lower credit impairments.

Australia's No. 2 lender by market value posted cash earnings of A$1.65 billion for the three months ended Dec. 31, compared with the same figure a year ago.

While most of 2020 was riddled with high credit impairments and weak loan growth during the coronavirus pandemic, Australian lenders are now noting better business conditions as the country was able to effectively control the domestic outbreak and snap back from enforced lockdowns.

The bank said credit impairment charges for the quarter slumped 98% compared with the second half of 2020, as more borrowers began repaying deferred loans.

This helped NAB's cash profit rise 47% in the December quarter versus the last six month period of 2020.

Expenses fell 1% in the quarter, the Melbourne-based lender said, while maintaining its 2021 expense growth target of 0.2%.

NAB's Common equity tier 1 (CET1) ratio, a closely watched measure of the bank's spare cash, rose to 11.7% at Dec. 31 from 11.5% at Sept. 30.