National Australia Bank has posted a 22 per cent rise in fiscal third quarter earnings, helped by a decline in charges for bad debts.

According to unaudited figures for the three months to 30 June 2010, the bank achieved cash earnings of A$1.1 billion ($1 billion), compared to A$900 million in the previous quarter. This was mostly due to a decline in bad debt charges, from A$1.06 billion in the third fiscal quarter last year to A$510 million for the same quarter this year, allowing the bank to rate its net interest margin as "stable".

NAB expects to grow at a faster pace in the coming months, as the demand for loans from Australian businesses is likely to expand by 6.5 per cent by 2011, it said in a statement.

The bank is presently embroiled in a takeover issue involving asset management firm AXA Asia Pacific Holdings. NAB had offered to acquire AXA for A$13.3 billion but was blocked by the Australian Competition and Consumer Commission early this year. It has sinced relaunched its bid with certain conditions to appease the ACCC's concerns.