NAB cash earnings fall 13.4% as credit charges rise 85.7%
Cash earnings excluding large notable items were flat at $7,090 million as a $1,547 million credit impairment charge rose 85.7% from $833 million.
National Australia Bank (NAB) reported cash earnings of $6,141 million for the year to 30 September 2026, down 13.4% from $7,091 million a year earlier, as credit impairment charges rose 85.7%. Cash earnings excluding large notable items were unchanged at $7,090 million.
The credit impairment charge rose to $1,547 million from $833 million in FY25. Individually assessed charges of $1,083 million related primarily to customers in Corporate and Institutional Banking and Business and Private Banking business lending. Collective provision charges of $464 million included a $403 million net increase in forward-looking provisions. Collective provisions as a percentage of credit risk-weighted assets rose 7 bps to 1.40%.
Net interest income rose 6.4% to $18,512 million from $17,398 million. Net interest margin increased 6 bps to 1.80%, or 3 bps excluding a 3 bps benefit from Markets and Treasury and lower liquid assets, reflecting higher earnings on deposit and capital replicating portfolios and a small benefit from lower funding costs, partly offset by lending competition. Other operating income rose 2.5% to $3,502 million. Net operating income increased 5.8% to $22,014 million.
Gross loans and advances increased 5.2% in FY26, or 6.5% excluding translation of a lower New Zealand dollar, versus a 5.9% rise in FY25. Deposits rose 5.2%, or 6.2% excluding that translation, after 7.4% growth in FY25. Australian business lending balances rose 9.8% with market share gains, after a 9% increase in FY25.
Business and Private Banking cash earnings excluding large notable items rose 10.7% to $3,685 million. Personal Banking rose 8.7% to $1,362 million. Corporate and Institutional Banking fell 6.1% to $1,740 million on higher credit impairment charges, lower Markets income and the winding down of the asset servicing business. New Zealand Banking fell 7.0% to NZ$1,381 million on higher credit impairment charges.
Expenses excluding large notable items rose 4.5% to $10,292 million, reflecting higher personnel costs, investment spend including a 1H26 software-capitalisation policy change, technology-related costs and depreciation, partly offset by $463 million of productivity benefits. Total expenses rose 18.2% including $1,347 million of large notable items. Underlying profit excluding LNIs rose 6.9%.
The Group CET1 ratio rose 17 bps to 11.87% at 30 September 2026 from 11.70% at 30 September 2025, driven by $1.8 billion raised via the FY26 interim dividend reinvestment plan and the sale of the remaining 20% stake in MLC Life, offset by dividends, lending growth and IRRBB RWAs. Pro forma CET1 is 12.07% after a 1.5% discount on the 2H26 DRP expected to raise about $0.9 billion. The final dividend was held at 85 cents a share, keeping total FY26 dividends at 170 cents.
Non-performing exposures to gross loans and advances edged up 1 bp to 1.56% after a 16 bps rise to 1.55% in FY25. The impaired asset ratio rose 5 bps, primarily relating to business lending in C&IB and B&PB. Default-but-not-impaired fell 4 bps to 1.22%. Australian home lending proprietary-channel drawdowns improved to 50% of total in FY26 from 41% in FY25. Australian home lending balances grew 3.8% after 5.2% growth in FY25. NAB plans to invest at a similar level to FY26 in FY27 and expects underlying cost growth of less than 3% compared with FY26 excluding higher restructuring charges announced in October 2026 and the impact of the software capitalisation policy change.