National Australia Bank Limited

NAB said underlying profit rose 6.4% half on half, while cash earnings were up 2.3% excluding the large notable item. Revenue increased 3.1%, with Markets and Treasury income up $147 million and revenue ex Markets and Treasury up 1.8%; margins were broadly stable, with reported NIM up 3 basis points and stable excluding Markets and Treasury and lower liquids. Statutory profit declined 18% due mainly to a one-off accelerated software amortization charge of $1.35 billion. Credit impairment charge for the first half was $706 million, or 18 basis points of gross loans and advances, and the March CET1 ratio was 11.65%. NAB raised forward-looking collective provisions by $300 million to $1.93 billion and said total provisions were 1.68% of credit risk-weighted assets. The interim dividend is $0.85 per share, or 72.5% of cash earnings ex notable items. For the second half, NAB expects about $1.8 billion from the DRP discount and partial underwriting, lifting pro forma CET1 to 12.05%; it also said full-year term funding issuance is expected to be around $36 billion, and FY26 investment spend should be about $1.8 billion with productivity savings targeted at greater than $450 million.

Andrew Irvine framed the half as one of strong operational momentum, supported by stable margins, broad-based credit growth and progress on NAB’s three priorities: business banking, deposits and proprietary home lending. He repeatedly emphasized the bank’s customer-centric strategy, saying better customer advocacy should translate into deeper relationships, retention and referrals. At the same time, his tone on the outlook was more cautious, citing higher fuel costs, supply disruptions, inflation and rate pressure as risks to customers and growth.

Inder Singh focused on the mechanics of the results and the balance sheet. He explained the $1.35 billion accelerated amortization charge from the software capitalization policy change, and said the remaining $2.2 billion software balance will amortize over a shorter period, with second-half impacts expected to be broadly offsetting and OpEx ratio around 50% in 2H26. He highlighted stable NIM ex neutral items, 0.5% lower operating expenses ex the notable item, $199 million of productivity savings, $706 million of credit impairment charges, CET1 of 11.65%, and liquidity ratios of 132% LCR and 116% NSFR.

Analysts pressed management on unsecured consumer losses, commercial credit charges, capital/RWA sensitivity, NIM trends, and whether the software capitalization change was sufficient. Management said the unsecured uptick was modest and mostly seasonal plus Citi book migration, not a major change in outlook. On commercial asset quality, Andrew Irvine said domestic book quality improved overall, while Victor German’s capital question drew an estimate from Inder Singh that, under base-case assumptions, RWA could rise by about $3 billion over 12 to 18 months. On margins, management said rate-lag impact if only one more rate hike occurs would be around 0.5 basis points, with no meaningful fixed-rate headwind seen and no current migration to yield-bearing deposits.