Full Year 2025 National Australia Bank Ltd Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Victor German - Macquarie Group Ltd - Analyst : I was hoping to get a little bit more color on business bank margin and fees. From your divisionary analysis, it looks like overall business margins are flat, as Andrew alluded, but it's partly due to the benefit from replicating portfolio and lower liquids. When it comes from -- to lending margins specifically, what trends are you seeing? And are lending margins declining? Or is the decline moderating or accelerating? Just a little bit more color on that and what it means for 2026 margins in that space. And then my second -- do you want me to ask the second question now or wait?

Question: Victor German - Macquarie Group Ltd - Analyst : Yeah. And the second question is, obviously, competition can come from both margins and fees. And if we look at your disclosure on fees, it looks that there are some pressures emerging. So just a little bit more color on that, if possible. And how significant are those fee pressures when we're thinking about sort of going into 2026? Should we be taking your second half fee line as a base? Or are there other considerations for that noninterest income line?

Question: Victor German - Macquarie Group Ltd - Analyst : Sorry, Shaun, maybe just to make sure that we get this right. So if we look at second half noninterest income, excluding markets, which obviously is volatile and moves around from interest in enter noninterest income. And that core line, it sounds like you're suggesting that there were some issues in the second half, which were potentially a one-off and shouldn't necessarily be kind of implied going into 2026? Or is that kind of baseline the right line to grow from as we think about the future?

Question: Richard Wiles - Morgan Stanley & Co Ltd - Analyst : Andrew, can you talk to us a little bit more about transaction accounts? In your prepared comments, you referred to the growth in new transaction accounts through the branch network. But perhaps if you can talk to a transaction account balanced growth generally, house split between sort of offset accounts and other more valuable low-cost transaction accounts and also how split between Personal Banking and BPB, please?

Question: Richard Wiles - Morgan Stanley & Co Ltd - Analyst : Okay. So a lot of good trends there, Andrew. In Personal Banking in the division, deposits were up 9% for the year. Can you tell us what was the growth in sort of transaction accounts or obviously wasn't TD driven, was the growth driven in transaction accounts or was it more savings accounts?

Question: Ed Henning - CLSA Ltd - Analyst : Just the first one on expenses, you've called out expense growth below the 4.6% this year. This year included $130 million of hopefully, a one-off or hopefully be a little bit less next year going forward. You've also called out higher productivity. You've also called out investment spend flat where it was up $150 million last year. Just why aren't you saying below 3.2%, which was your underlying growth or a number below that 4.6%? What are you seeing coming through your cost line with a lot of the numbers going down or flat on last year that you're seeing coming through your expense line for '26?

Question: Ed Henning - CLSA Ltd - Analyst : But just to clarify, like your underlying growth was 3.2%. You're saying below 4.6% but yet a number of the moving parts from last year won't continue for next year, it won't be at the same level. So it seems like it's better and better than 3.2%, but yet you're saying below 4.6%?

Question: Ed Henning - CLSA Ltd - Analyst : Okay. That's great. And just a second one quickly on the margin. Can you just talk about some of the moving parts a little bit more? You talked about the deposit hedge is now up to for next half, but it was up 3% in the half just gone. Why that's falling away when you've still got that five-year hedge rolling through? And then also, if you look at what you talked about proprietary still going strong and hopefully grow that. So the lending should be a bit better there. You grew investor lending, credit cards are up. Can you just talk a little bit more on the lending side as well just some of those moving parts rolling into first half '26, please? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 11:30PM, NAB.AX - Full Year 2025 National Australia Bank Ltd Earnings Presentation

Question: Andrew Triggs - JPMorgan Chase & Co - Analyst : Just a first question on asset quality. Obviously, you're starting to see a turn in the broader book trends, but you did see a number of single names. Is there anything you can sort of like very granular in the book that you can sort of point to that gives us a bit more insight in predicting those sort of two bookends around asset quality. I note there's the typical product -- sorry, probability of topside in the business book towards the back shows the ratio above I think 2.5% was pretty stable half-on-half. But is there anything you can sort of give us -- it gives you a little bit more insight on comfort that you won't get the same extent of individual provision issues into the next half?

Question: Andrew Triggs - JPMorgan Chase & Co - Analyst : And Andrew, just a second question around I guess, customer franchise metrics. Pleasing to see some reasonably good momentum on MPS across the key target segments. MFI doesn't generally appear in your pack and doesn't therefore, seem to be as intense an area of focus or strategy of some of your competitors. Can you talk to where you think you are at on MFI trends and maybe segment that across consumer and SME?

Question: Brian Johnson - MST Financial - Analyst : As I'm looking at the screen, your share price is down about 2.5% in a market that is up on a small earnings miss. And if we kind of listen to the nature of the questions today are a lot about the capital and the dividend sustainability. I just -- and so it's up to you guys whether you answer this quite clearly or not. But if we take the core equity Tier 1 ratio at 11.7%, take out the dividend of $59 million, add back the sale of the life business, which is $11, you get to a notional ex dividend number of 11.21, which is below the 11.25. And you can say, we've got three months to earn it, but that's the reality of where you are today. So the question I've got relates to slide 29. And Shaun, you've mentioned it, but I don't think you've really addressed it. But if we probably have a look at one of the things that really dragged on your capital ratio during the period, it's basically -- it's a very small note number four, which is this $4.8 billion change in the risk-weighted overlay in respect of some methodology. So that, I reckon that costs around 12 basis points, which is pretty significant in the scheme of things. So could we find out -- is this an overlay that reverses really quickly? Or what are the things that drive it up or down? Or does it just -- would this change in methodology, does it just grow in line with the risk-weighted assets? And how is it impacted relative to the capital [for?]

Question: Brian Johnson - MST Financial - Analyst : Can I go back to that? So this $4.8 billion in the outlook, you've got it reversing, could we get a feeling as to how quickly you think it reverses? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 11:30PM, NAB.AX - Full Year 2025 National Australia Bank Ltd Earnings Presentation

Question: Brian Johnson - MST Financial - Analyst : Okay. And then the second question, if I may. Recently, Andrew, you've come out with a statement with an aspiration on basically [resi] property development. having followed NAV for a number of years, when that was historically kind of blown up is when it's had too much commercial real estate lending. In the AFR interview, you said that you wouldn't increase your risk tolerance to basically fulfill the -- fulfill that objective. But it kind of feels to me like that would suggest that the greater than 2.5% probability that you've got to take on board a little bit more risk relative to the portfolio to deliver it. Could you just walk us through why we should feel comfortable that this is not something to watch?

Question: Brian Johnson - MST Financial - Analyst : We should not expect to see that greater than 2.5% probability to 48%. That should not rise other things being equal.

Question: Brendan Sproules - Goldman Sachs Group Inc - Analyst : Brendan from Goldman Sachs. I just had a question on some of the statements that you made in response to BJ's question around the capital position. You talked about the confidence you've got in the profit that will come out of this risk-weighted asset growth that you've had in the last 12 months. If I look on slide 21, the thing that's held back your profit growth has been this large negative jaws between net operating income and operating expenses. Could you maybe talk into '26 and '27 talked about cost growth at a little bit under or under 4.6%. What are you thinking in terms of positive jaws and actually been able to turn around the growth in your ROE?

Question: Brendan Sproules - Goldman Sachs Group Inc - Analyst : And maybe my second question, just on the asset quality side. I mean slide 28 shows your provisioning balances. And as you've seen the acceleration in business credit growth, you've seen your coverage ratio fall in terms of CP. Is that a trend that we're going to expect to continue just given how strong credit growth opportunities are in the market? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 11:30PM, NAB.AX - Full Year 2025 National Australia Bank Ltd Earnings Presentation

Question: Thomas Strong - Citibank Cameroon SA - Analyst : Just two questions on the Corporate and Institutional Bank please. Just the first around the revenue. I mean you saw annualized GLA growth of 12% in NIM expansion. Can you just talk to, I guess, what you're seeing from a competitive standpoint in C&I in particular, given there's probably faring appetite from your peers to deploy capital into this space at the moment?

Question: Thomas Strong - Citibank Cameroon SA - Analyst : That's very clear. And I guess just as a follow-up question. If we look at the GLA growth in CIB in the half, but the risk-weighted intensity was a lot lower than the 2%. Is that just relating to the mix of business that's skewing to that larger end?

Question: Matthew Dunger - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Just understand the strong progress you've made on transaction accounts, but the total deposit growth slowed in the half, excluding C&IB particularly. You've showed that on slide 79, Business Bank and term deposits showing some slower growth. We know that TDs have been competitive. So just wondering to what extent the lower TD growth reflects current pricing versus the planned shift you've been talking about in the franchise? And at what point do you start to worry about franchise momentum in the private bank?