National Australia Bank Limited · ASX:NAB
National Australia Bank — Debt Investor Presentation (May 2016)
28 slides from National Australia Bank's debt investor presentation, May 31, 2016
Slide 1: National Australia Bank Limited
For personal use only National Australia Bank Limited ABN 12 004 044 937
Slide 2: Important Notice
Important Notice This document has been prepared by National Australia Bank Limited ABN 12 004 044 937 (“NAB”) in relation to its proposed offer of NAB Capital Notes 2. A Prospectus in respect For personal use only of the NAB Capital Notes 2 was lodged with ASIC on 31 May 2016. The Prospectus does n
Slide 3: NAB Capital Notes 2 – Offer Summary
NAB Capital Notes 2 – Offer Summary Issuer • National Australia Bank Limited (“NAB”) Offer size • A$750 million with the ability to raise more or less For personal use only • The net proceeds of the Offer will be used for general corporate purposes. APRA has provided Use of proceeds confirmation tha
Slide 4: Distributions
NAB Capital Notes 2 – Distributions For personal use only • Quarterly, floating rate Distributions in arrears Distributions • Distributions are discretionary, non-cumulative and subject to the Payment Condition • Failure to pay a Distribution when scheduled will not constitute an event of default •
Slide 5: Mandatory Conversion
NAB Capital Notes 2 – Mandatory Conversion For personal use only • On the Mandatory Conversion Date, if NAB Capital Notes 2 have not been Converted, Written Off, Redeemed or Resold beforehand, NAB must Convert NAB Capital Notes 2 into Ordinary Shares, provided the Mandatory Conversion Conditions are
Slide 6: Conversion, Redemption or Resale Events
NAB Capital Notes 2 – Conversion, Redemption or Resale Events For personal use only • With the prior written approval of APRA, NAB may elect to Convert into Ordinary Shares, Redeem Optional Conversion, or Resell all or some NAB Capital Notes 2 on 7 July 20221 Redemption or Resale on 7 • Conditions a
Slide 7: Loss Absorption Event
NAB Capital Notes 2 – Loss Absorption Event • A Common Equity Trigger Event will occur if NAB’s Common Equity Tier 1 Capital (CET1 Capital) Common Equity Trigger Ratio as determined by NAB or APRA at any time is equal to or less than 5.125% (on either a Level 1 Event For personal use only or Level 2
Slide 8: Illustration of ranking on winding up
Illustration of ranking on winding up Examples Examples of existing NAB obligations and securities1 For personal use only Higher Ranking Liabilities preferred by law Liabilities in Australia in relation to Protected Accounts under the Banking Act (generally, and secured debt savings accounts and ter
Slide 9: Robust capital buffers
Robust capital buffers • The Group maintains a strong capital, funding and liquidity NAB Level 2 CET1 Capital Ratio position in line with its ongoing commitment to balance sheet strength. The Group’s CET1 Capital Ratio operating target For personal use only remains between 8.75% to 9.25%, based on c
Slide 10: Buffers and pre-emptive actions to protect holders
Buffers and pre-emptive actions to protect NAB Capital Notes 2 holders • NAB’s capital position and earnings provide a buffer for NAB Capital Notes 2 holders • From 1 January 2016, the Capital Conservation Buffer (CCB) restricts the ability for NAB to distribute earnings should NAB’s CET1 capital Fo
Slide 11: Trading prices of selected NAB Hybrids to an adjusted NAB Ordinary Share Price
Trading prices of selected NAB Hybrids to an adjusted NAB Ordinary Share Price • The trading prices of NAB’s Basel III compliant Additional Tier 1 securities currently on issue (including NAB CPS, NAB CPS II and NAB Capital Notes) have been less volatile than the trading price of NAB’s ordinary shar
Slide 12: Comparison of NAB Capital Notes 2 to other NAB Additional Tier 1 Securities
Comparison of NAB Capital Notes 2 to other NAB Additional Tier 1 Securities NAB Capital Notes 2 NAB Capital Notes NAB CPS II For personal use only ASX Code NABPD NABPC NABPB Perpetual, subject to Mandatory Perpetual, subject to mandatory Perpetual, subject to mandatory Term Conversion on 8 July 2024
Slide 13: Information about the Offer
Information about the Offer For personal use only • The Offer comprises: – The Securityholder Offer – The Institutional Offer, and Offer Structure – The Broker Firm Offer • Information about the different types of offers and how to apply is provided in Section 3 of the Prospectus “Applying for NAB C
Slide 14: Certain events that may occur during the term of NAB Capital Notes 2
Certain events that may occur during the term of NAB Capital Notes 2 The table below summarises certain events that may occur during the term of NAB Capital Notes 2, and what Holders may receive upon the occurrence of such events. The events are dependent on factors including share price, the occurr
Slide 15: Key dates for the Offer
Key dates for the Offer1 Important Dates Date For personal use only Record Date for Securityholder Offer 26 May 2016 Announcement of the Offer 31 May 2016 Lodgement of Prospectus with ASIC 31 May 2016 Bookbuild 7 June 2016 Announcement of Margin 8 June 2016 Offer Opens 8 June 2016 Securityholder Off
Slide 16: Key risks
Key risks NAB Capital Notes 2 are NAB Capital Notes 2 do not constitute deposit liabilities of NAB, are not Protected Accounts for the purposes of the Banking not deposit liabilities or Act or any other accounts with NAB and are not guaranteed or insured by any person. For personal use only Protecte
Slide 17: Key risks (continued)
Key risks (continued) Holders have no right to request that their NAB Capital Notes 2 be redeemed. Absent a Conversion, Redemption or Resale, Holders have no right to in order to realise their investment, Holders would have to sell their NAB Capital Notes 2 on the ASX at the prevailing For personal
Slide 18: Overview & 1H16 Results Summary
For personal use only Overview & 1H16 Results Summary
Slide 19: Our strategic focus
Our strategic focus Australia and New Zealand’s most respected bank For personal use only Organisation-wide focus on Deliver a great customer customer outcomes experience Customer centric technology deployments Reshape our operating model for the future environment Leveraging investments and c
Slide 20: Group financial result
Group financial result1 Mar 16 Mar 16 vs Mar 16 vs Half year Sep 15 Mar 15 For personal use only ($m) Net operating income 8,923 2.0% 3.3% Operating expenses (3,831) (2.0%) (4.2%) Underlying profit 5,092 2.0% 2.7% Bad & doubtful debts (375) (7.4%) 6.0% Cash earnings 3,310 1.4% 6.5% Cash ROE 14.1% (2
Slide 21: Solid Australian and New Zealand performance
Solid Australian and New Zealand performance Underlying profit1 and cash earnings by business unit (local currency) 1H16 vs 1H15 For personal use only Underlying profit growth Cash earnings growth 11.9% 11.7% 6.5% 5.0% 2.7% 2.8% 1.4% (3.3%) NAB Group Australian NZ Banking NAB Wealth NAB Group Austra
Slide 22: Group revenue and net interest margin
Group revenue and net interest margin Net operating income For personal use only ($m) Excluding FX HoH revenue growth +1.9% 79 (55) 163 7 12 (116) 86 Derivative Valuation Adjustments (-$30m)1 8,923 Net interest income 8,747 ex Markets & Treasury 8,636 Mar 15 Sep 15 Volumes Margin Markets & Fees & NA
Slide 23: Asset quality
Asset quality B&DDs and as a % of GLAs 90+ DPD & GIAs, and watch loans as a % of GLAs For personal use only ($m) 0.16% 0.14% 1.11% 0.13% 0.12% 0.77% 0.63% 0.78% 399 375 349 1.47% 299 1.16% 1.22% 1.15% Sep 14 Mar 15 Sep 15 Mar 16 Sep 14 Mar 15 Sep 15 Mar 16 Watch loans as % of GLAs 90+ DPD & GIAs as
Slide 24: Strong capital position
Strong capital position Group Basel III Common Equity Tier 1 Capital Ratios For personal use only (%) 3.33 0.83 (0.58) (0.10) (0.60) (0.10) 13.02 10.24 9.69 Sep 15 Cash earnings Dividend net of RWA growth CYBG Other Mar 16 Internationally Mar 16 DRP demerger / (APRA Comparable (Internationally parti
Slide 25: Key regulatory changes impacting capital and funding
Key regulatory changes impacting capital and funding Description International regulation status Domestic regulation status Fundamental Review of Aims to replace current trading book capital rules with a more Final Basel Committee on Banking Future APRA consultation the Banking Book & coherent and c
Slide 26: Funding profile is robust
Funding profile is robust Group Stable Funding Index (SFI) Term wholesale maturity profile For personal use only ex. CYBG ($bn) 89% 90% 92% 91% 89% 85% 86% 20% 20% 21% 22% 21% 20% 20% 29 31 21 22 18 18 65% 66% 69% 70% 71% 69% 68% 18 17 23 15 18 1 6 6 4 18 13 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 15
Slide 27: 1H16 summary
1H16 summary Solid 1H16 group result driven by improved Australian Banking performance For personal use only o Good growth in Australian Banking revenue and underlying profit o Business Bank has momentum after a significant period of change Balance sheet strong - capital, funding and asset quali
Slide 28: Key Contacts
Key Contacts Issuer Joint Lead Managers For personal use only Shaun Dooley National Australia Bank Limited J.P. Morgan Australia Limited Group Treasurer Nicholas Chaplin Andrew Best Phone: +61 (03) 8641 4089 Phone: +61 (02) 9237 9518 Phone: +61 (02) 9003 8383 Mobile: +61 (0) 411 406 468 E-mail: Shau
National Australia Bank — Debt Investor Presentation (May 2016) on 6ix