NAB Posts Higher Cash Earnings Stable Margins

National Australia Bank reported stable growth, stronger core profit, higher lending and deposits, improved customer focus and a strong position to handle uncertain economic conditions.

National Australia Bank Limited (ASX: NAB) 

on 4 May 2026 shared its Half Year results for 1H26.  The bank reported steady progress in its plan with continued momentum across its business. Cash earnings were impacted by a change in software capitalisation policy which reduced earnings by $949 million. When this large item is excluded, cash earnings increased by 2.3% compared with the previous half and underlying profit rose by 6.4%. Growth was supported by strong performance in Business and Private Banking. The bank also highlighted progress in its focus areas which include business lending expansion, deposit growth, and improving its home lending channels. It stated that despite global uncertainty it is in a stable position and has taken steps to strengthen its balance sheet for future conditions.

Financial 

During 1H26, revenue increased by 3.1%. Excluding Markets and Treasury income, revenue grew by 1.8% mainly due to higher volumes though partly affected by currency movements. Gross loans and advances rose by 2.9% while deposits increased by 2.3%. After adjusting for exchange effects, loans grew 3.7% and deposits rose 3.0%. Net interest margin increased slightly to 1.81% with stable core performance. Expenses rose sharply by 26.2% due to the large notable item, but excluding it, costs actually fell by 0.5% as productivity gains balanced higher staff and technology spending. The bank also improved its financial safety by increasing provisions and maintaining strong capital levels.

Business segment progress

The bank continued to focus on its three main priorities. In Business and Private Banking, lending increased with gains in small and medium business segments and deposits also grew strongly. Digital tools are being used more widely with most lending applications now submitted online. In Personal Banking, home loan balances increased moderately and more customers used direct bank channels instead of brokers. Deposit growth was supported by renewed focus on branch activity. Corporate and Institutional Banking delivered growth despite strong competition. The New Zealand business also showed steady improvement with rising customer activity and digital engagement. Across all areas, the bank is working to improve customer experience through simpler systems and faster service.

Capital position and dividend 

To handle uncertain economic conditions, the bank strengthened its balance sheet by increasing provisions and maintaining capital above its target level. It also plans to raise about $1.8 billion through a dividend reinvestment plan with a small discount. This is expected to lift its capital ratio further. The 2026 interim dividend was declared at 85 cents per share fully franked. It will be paid on 2 July 2026 with a record date of 8 May 2026. NAB specified it is prepared to manage through volatility whereas continuing to focus on long term growth and stable returns.

(Source: Company Report)