Interim 2007 National Australia Bank Earnings Presentation Transcript

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

Question: Jeff Emmanuel - UBS - Analyst : Jeff Emmanuel from UBS. I've got a couple of questions, if I can. Firstly, on the hedging, Michael, of AUD100 million, NAB seems to be the only bank out of the big five that includes hedging above the line now, and at AUD100 million of (inaudible), it's a pretty chunky number that contributed in a fair way over the half to the UK and New Zealand. So I just came to get your thoughts on why that methodology is more appropriate, and I've got a second one. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. MAY 10, 2007 / 12:30AM, NAB.AX - Interim 2007 National Australia Bank Earnings Presentation

Question: Jeff Emmanuel - UBS - Analyst : Can I ask about the UK in a bit more detail? Obviously the year-on-year comparisons are great, but over the second half through to this half, revenues really only grew a percent, and that's in sterling. So [X] the currency hit. The lending book grew by under 8%, and against the UK system growing at 6% or so, are you happy with the fact that you have opened 85 branches, you have really embarked on a growth strategy, but yet the revenue line in the UK has just hardly moved?

Question: Jeff Emmanuel - UBS - Analyst : The margin at 3.1% still looks to be 120 BPS above sector average in the UK. So can you give us a feel for where it starts to stabilize? Because it seems like there's a long way to go.

Question: Jeff Emmanuel - UBS - Analyst : Michael, just a question. You mentioned in slide six of your presentation just the fee income trend, up 0.4 of a percent, and the question, really, around that is you pointed out the variables around it. But it just seems to me that whilst margins are holding up, fee income looks to have stalled across the sector. So just keen to see whether you're seeing competitive pressures driving it, or is there something else that either means it bounces back or stays where it is?