NAB annual profit has fallen sharply after Australia’s biggest business bank set aside more than $1 billion to cover rising loan losses in a more difficult economic environment.
National Australia Bank reported statutory net profit of $6.14 billion for the year to September 30, a 9.1 per cent decline. Cash earnings fell by 13.4 per cent during the 2026 financial year.
Credit impairment charges rose to $1.5 billion, compared with $833 million the previous year. The total included $1.1 billion in individually assessed charges and a further $464 million in collective forward-looking provisions.
NAB said it had increased provisions to reflect slowing growth, falling house prices, higher interest rates and continuing inflationary pressures.
Chief executive Andrew Irvine said: “In FY2026 we delivered good momentum while taking deliberate steps to strengthen our resilience, positioning us to continue growing and supporting customers.”
Mr Irvine said underlying profit would have increased by 6.9 per cent once large items were excluded, while cash earnings would have been unchanged at $7.1 billion.
NAB warns of a more challenging economy
The bank warned that Australia’s economy was slowing after five central bank interest rate increases since February.
“Cost pressures continue to pose a material risk to the economy, while the correction in the housing market poses some additional downside risk to growth,” NAB said. “For both growth and inflation, productivity remains a key challenge.”
NAB, which has a strong focus on small and medium-sized businesses alongside its retail, private banking and institutional finance operations, increased Australian business lending by 9.8 per cent during the year after gaining market share.
Total deposits rose by 5.2 per cent, including a 7.4 per cent increase in business transaction account balances.
The bank announced plans in October to cut 2,500 jobs as part of an effort to simplify its operating model. The restructuring is expected to cost about $300 million in 2027.
“These changes, along with the ongoing disciplined execution of our strategy, position NAB to navigate the near-term uncertainty,” Mr Irvine said.
NAB declared a final dividend of 85 cents per share, taking its total annual payout to $1.70 per share, unchanged from 2025.
