Banking giant NAB has reported a $7.7bn increase in cash earnings despite warning a more “challenging environment” is to come.

The 8.8 per cent increase in cash earnings was revealed as part of the big four bank’s full-year results for 2023 released on Thursday.

NAB chief executive Ross McEwan said the bank had been determined to “get the basics right”.

“NAB is focused on delivering better outcomes for our customers and colleagues – regardless of the environment,” he said.

“All our businesses have played their part. In particular our leading business franchise has continued to grow.

“This is a great franchise, with great customers and bankers, and we’re determined to keep investing in it to make it even better.”

Despite the increase, Mr McEwan said he expected the challenging environment that appeared in late-2023 to persist into next year.

“We saw the impact of higher interest rates in our first-half performance,” he said.

“However, our results softened in the second six months amid intense competition as customers seek the best deal.

“This is all leading to some of the thinnest mortgage margins I’ve seen in my time in Australian banking.

“We also saw the broader environment get more challenging, as higher rates and inflation weighed on households.”

Mr McEwan said some customers were feeling the pinch more than others.

“The RBA’s decision to again increase the official cash rate because of persistent inflation will increase the pressure on households,” he said.

“Our message to people struggling with the increase in cost of living is: We’re here to help – please call us early.

“We’ve added more bankers this year to take those calls and we will be there when customers need us most.”

A final dividend of 84c per share was also declared, taking full-year dividends to $1.67.

NAB said the figure equated to $5.2bn being delivered to shareholders.

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