National Australia Bank (NAB) H2 2025 earnings summary

Executive summary

• Underlying profit increased in FY25, supported by strong balance sheet, revenue and volume growth in the second half, and a customer-centric strategy.

• Business lending balances in Australia grew 5.8% in the second half, the strongest half-yearly improvement in 3.5 years.

• The first year of the Refresh strategy delivered positive outcomes in customer advocacy and operational simplification.

• Continued investment in technology, digital transformation, and AI to enhance customer and colleague experiences.

• Focus remains on business banking, deposit growth, and proprietary home lending to drive sustainable returns.

Financial highlights

• Underlying profit: $10,965m, up 1.3% year-over-year; cash earnings: $7,091m, down 0.2% year-over-year.

• Revenue grew 2.9% year-over-year, driven by volume growth and stronger market and treasury income.

• Net interest margin increased 8 basis points in the second half; group NIM at 1.70%.

• Dividend per share: 127 cents, payout ratio 73.3% of cash earnings.

• Total provisioning at 1.64% of credit risk-weighted assets; collective provision coverage ratio decreased to 1.33%.

Outlook and guidance

• Australian GDP growth forecast at 2% in 2025 and 2.3% in 2026, with business credit growth expected at 7.5% and housing credit at 6% in 2026.

• Opex growth expected to be lower in FY26 than FY25's 4.6%, with targeted productivity benefits of over AUD 450 million.

• Investment spend in FY26 estimated at ~$1.8bn.

• Margins expected to benefit from replicating portfolios, with stable interest rate environment anticipated in the first half of 2026.

• Migration of Citi Consumer Business to new platform to complete by December 2025.