National Australia Bank CEO Ross McEwan has warned the Reserve Bank needs to lift the cash rate slowly to avoid destabilising housing markets, as he unveiled a 9.1 per cent jump in cash earnings which will likely drive consensus earnings upgrades.

Speaking after NAB reported strong revenue growth and relatively benign margin compression over the first quarter, Mr McEwan said increases to fixed home loan rates being pushed through by banks “will have a dampening effect on house prices”. He is concerned aggressive cash rate rises, as the Reserve Bank manages the inflation target, could depress sentiment on housing.