NAB, which has been hamstrung by the poor performance of its UK operations, posted an unaudited cash profit of A$1.45 billion ($1.50 billion) compared with A$1.4 billion a year ago.
Cash profits, which exclude one-offs, non-cash accounting items and investment gains or losses, are the most closely watched by investors.
"NAB has been tarnished over the year due to a number of negative issues and earnings surprises. However, the current discount to peers even at today's price looks slightly overdone," said Evan Lucas, a strategist at IG Markets.
NAB trades at the lowest 12 month forward price to earnings multiple of its "Big Four" Australia bank peers according to Thomson Reuters Starmine, behind Commonwealth Bank of Australia , Westpac Banking Corp <WBC.AX. and Australia and New Zealand Banking Group.
NAB shares rose 0.6 percent in early trade, touching a two-year high of A$28.30.
The stock was boosted last month by speculation Spain's Banco Santander SA was mulling a $3.2 billion bid for NAB's 337 Clydesdale and Yorkshire bank branches. Santander denied it was in talks with NAB.
"All of these bank stocks have run away," said Angus Gluskie, a portfolio manager, White Funds Management, which owns shares in NAB. "The outlook for them is not bad so we're comfortable holders and interested buyers at the right points in time."
NAB said its charge for bad and doubtful debts, an area of concern for the industry in late 2012, had fallen about 10 percent to A$554 million. Revenues rose 3 percent, boosted by its wholesale banking division and fatter customer margins.
"This is a pleasing result, especially given operating conditions remain challenging in both Australia and the UK, notwithstanding recent improvements in financial markets," Chief Executive Cameron Clyne said in a statement.
Clyne said NAB had cut around 500 jobs in the quarter, mostly in its British operations, and would be focusing on reducing costs further
Its core tier-one capital ratio on a Basel II basis was 8.39 percent.