The lender reported half year cash profit of $4.07 billion, a 17 per cent improvement from the same period a year ago but slightly below analyst estimates.

Statutory net profit for the six months to March 31 was up 11 per cent on the same period a year ago to $3.96b, while operating revenue jumped 19.3 per cent to $10.53b.

Chief executive Ross McEwan said NAB was seeing the benefits of executing a clear and consistent strategy regardless of the environment.

“Strong underlying profit growth reflects execution of our long term strategy which has allowed us to make deliberate choices to target growth in higher returning segments combined with the impact of the higher interest rate environment,” he said on Thursday.

The gains were driven by a 19.9 per cent jump in cash earnings to $1.7b at its key business and private banking unit.

Institutional banking as well as the New Zealand unit also reported high double digit growth in earnings for the first half.

On the other hand, NAB’s personal banking unit, which includes the home lending business, posted a 0.4 per cent decline in earnings amid fierce home loan competition and a rise in credit impairment.

“We’ve taken steps to moderate growth in home lending, given the current market dynamics, which has seen new loans written well below the cost of capital,” Mr McEwan told reporters.

Expenses for the half year jumped 11.6 per cent, largely on account of the banks’s takeover of Citi’s consumer business in Australia.

Net interest margin – a key measure of profitability – rose 14 basis points from a year ago to 1.77 per cent, largely reflecting higher earnings on deposits and capital as a result of the rising interest rates.

NAB will pay a fully franked first-half dividend of 83 cents a share, up from 73 cents a share for the same period last year.