National Australia Bank (NAB) investor relations material

Executive summary

• Statutory net profit for 1H26 was $2,750m, down 18–19.3% year-over-year, impacted by a $1,347m pre-tax ($949m after-tax) accelerated software amortisation charge and exchange rate movements on NZ operations.

• Cash earnings were $2,639m, down 26.3% year-over-year; excluding large notable items, cash earnings were $3,588m, up 7.1% year-over-year and 2.3% sequentially.

• Underlying profit rose 6.4% ex-notables, supported by strong balance sheet momentum, stable margins, and broad-based credit growth.

• Interim dividend of 85 cents per share, fully franked, with a 1.5% DRP discount and partial underwrite to raise ~$1.8bn in capital.

• Customer advocacy and satisfaction improved, with positive NPS across all segments and recognition as Roy Morgan Major Bank of the Year 2025.

Financial highlights

• Net operating income increased 5.9% year-over-year to $10,870m; net interest income rose 8.5% year-over-year to $9,163m.

• Net interest margin improved by 11 bps year-over-year to 1.81%; margins remained broadly stable excluding markets and treasury.

• Operating expenses rose 26.2–32.5% due to the software amortisation; excluding this, expenses fell 0.5–5.1%.

• Credit impairment charge was $706m, up $221m from the previous half, reflecting a $300m top-up to forward-looking provisions.

• Cash return on equity (ex-notables) at 11.6%; basic cash EPS (ex-notables) 117.3 cents.

Outlook and guidance

• Near-term outlook is more challenging due to inflation, higher rates, and Middle East conflict; economic growth expected to slow to 1.5% in 2026.

• Productivity benefits targeted at over $450m for FY26, with cost growth expected to be less than 4.6%.

• Pro forma CET1 ratio expected at 12.05% after DRP and capital raise; dividend payout policy and CET1 capital target unchanged.

• Management remains focused on prudent balance sheet settings, disciplined cost management, and continued investment in technology and AI.