NAB 3Q26 Unaudited Cash Earnings $1.83bn, CET1 11.93%

National Australia Bank reported unaudited cash earnings of $1.83 billion and unaudited statutory net profit of $1.81 billion for the three months to 30 June 2026. Results are presented on a cash earnings basis and compared with the quarterly average of the March 2026 half year for continuing operations unless otherwise stated. Cash earnings rose 39% on that basis including the $1,347 million large notable item recorded in 1H26 operating expenses, or 2% excluding it, which NAB (ASX:NAB) said primarily reflected lower credit impairment charges alongside broadly stable underlying profit. Revenue rose 2%, or 3% excluding Markets and Treasury income, while operating expenses excluding the large notable item rose 4%, which the bank attributed to its 1H26 software capitalisation policy change resulting in a higher proportion of investment spend expensed in 3Q26, higher technology costs, seasonally higher salary costs and investment spend, increased depreciation and amortisation and higher payroll remediation costs, partly offset by productivity benefits. Net interest margin decreased 2 basis points to 1.79%; excluding Markets and Treasury, NIM increased 2 basis points.

Total gross loans and acceptances were $817.4 billion at June 2026, up 2% on March 2026, and total customer deposits were $685.4 billion, also up 2%. Australian business lending rose 2%, including 4% growth from Business & Private Banking, and drawdowns via proprietary channels in the Personal Banking and Business & Private Banking divisions, excluding ubank, improved from 47.7% in 1H26 to 50.9% in 3Q26. Credit impairment charges of $299 million included individually assessed provision charges of $180 million and collective provision charges of $119 million. The ratio of non-performing exposures to gross loans and acceptances decreased 2 basis points from March 2026 to 1.50%, while the ratio of collective provisions to credit risk weighted assets increased 1 basis point to 1.36%. The Group Common Equity Tier 1 ratio on a Level 2 basis was 11.93% at June 2026 against 11.65% at March 2026 and an operating target of greater than 11.25%; NAB noted the FY26 interim dividend, equivalent to negative 58 basis points, and the completion of $1.8 billion of CET1 capital raised via the interim dividend reinvestment plan, equivalent to positive 40 basis points, had no impact on the 3Q26 ratio because both affect the CET1 ratio in July 2026. Chief Executive Andrew Irvine said that while the ratio of non-performing loans declined over 3Q26, watch loans were higher, reflecting current and potential stress impacting performing customers, and that the Australian home lending market softened in 3Q26 with NAB's applications down 15% compared with 2Q26. NAB continues to target productivity savings of more than $450 million for FY26 and operating expense growth in FY26 below FY25 growth of 4.6%, excluding any large notable items.