Due to a plunge in charges for bad debts, the third-quarter cash profit of National Australia Bank (NAB) witnessed a 22 percent year-on-year increase to approximately A$1.1 billion.

While the quarterly cash earnings’ figures of the NAB – which is the first of Australia’s leading four banks to report earnings - fell short of the analysts' expectations for A$1.2 billion; they still were on course to fall in line with their pre-crisis annual earnings of A$4.4 billion. NAB is.

Furthermore, revealing that the bank’s Tier 1 capital - or its ability absorb losses – fell from 9.09 in March to 8.79 percent by third-quarter end, NAB said that the fall resulted from growth in risk-weighted assets arising from regulatory requirements and the takeover of TierOne Bank in the US.

Nonetheless, noting that the third-quarter results matched the average recorded for the first two quarters of NAB’s financial year, CEO Cameron Clyne said in a statement: “In the June quarter, NAB delivered solid, sustainable business results, improved customer satisfaction and remained financially strong during what was a period of continued uncertainty in global financial markets.”

A better indication about how the Australian banking sector is faring will be possible only after the country’s other top three banks - Commonwealth Bank of Australia; Australia and New Zealand Banking Group; and Westpac Banking Corp – post their annual results in the coming weeks.