National Australia Bank Limited · ASX:NAB
National Australia Bank — FY2024 Earnings Presentation
136 slides from National Australia Bank's earnings presentation, Nov 7, 2024
Slide 1: Full Year Results 2024 Investor Presentation
national australia bank Full Year Results 2024 Investor Presentation 7 November 2024 Andrew Irvine Group Chief Executive Officer Nathan Goonan Group Chief Financial Officer National Australia Bank Limited ABN 12 004 044 937 |
Slide 2: NAB 2024 Full Year Results Index
NAB 2024 Full Year Results Index This presentation is general background information about NAB. It is intended to be used by a professional analyst audience and is not intended to be relied upon as financial advice. Refer to page 136 for legal disclaimer. Financial information in this presentation i
Slide 3: Overview
Overview Andrew Irvine Chief Executive Officer
Slide 4: Key messages
Key messages • Sound FY24 financial performance benefitting from a more stable 2H24 operating environment • Supporting customers impacted by higher costs of living and interest rates • Focus on disciplined execution over past 4 years has delivered good balance sheet momentum and improved returns whi
Slide 5: Financial results
Financial results Underlying profit ($m) Cash earnings1 ($m) Statutory profit ($m) (6.9%) vs FY23 8.0% vs FY22 (8.1%) vs FY23 (6.1%) vs FY23 Flat vs FY22 1.0% vs FY22 11,631 10,823 10,022 7,731 7,414 7,104 7,102 6,891 6,960 FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24 (1) Refer to page 40 for defini
Slide 6: Helping our customers in a challenging environment
Helping our customers in a challenging environment Supporting personal and small Strong customer engagement with Offering customers more loyalty business customers experiencing financial wellbeing tools in FY24 and recognition benefits financial difficulty • 26% increase in NAB Assist customer • >1.
Slide 7: Balance sheet momentum aligned to long-term strategy
Balance sheet momentum aligned to long-term strategy Lending growth tilted to higher Growing share in deposits Consistent growth in NZ returning business segments Growth in balances (4 years from Sep 2020 – Sep 2024) 42% 44% 29% 26% 28% 22% 20% B&PB Business Total Business Aust Home Aust Business Au
Slide 8: Delivering improved shareholder returns over time
Delivering improved shareholder returns over time Cash return on equity1 Basic cash EPS1 (cents) 247 221 229 199 154 12.9% 11.7% 11.6% 10.7% FY20 FY21 FY22 FY23 FY24 8.3% Dividends per share (cents) 167 169 151 127 60 FY20 FY21 FY22 FY23 FY24 Payout ratio2 FY20 FY21 FY22 FY23 FY24 38.9% 63.7% 68.4%
Slide 9: Maintaining prudent balance sheet settings
Maintaining prudent balance sheet settings Group CET1 above target range of 11.0% - 11.5%1 Strong provisioning CP/CRWA1 ~$7.4bn on-market share buy-backs completed since Aug 21 $5.2bn CP at Sep 24 includes $1.9bn of forward-looking provisions 11.51% 12.22% 12.35% 12.21% 10.38% 1.47% 1.47% 1.31% 0.96
Slide 10: Evolving our long-term strategy
Evolving our long-term strategy Our Strategic Ambition What we aim to deliver over the medium term1 Leading customer advocacy • Move to a more customer-centric, simpler and fast-paced organisation • Improved customer service and customer experiences • Reinforce execution disciplines Winning in marke
Slide 11: Our long-term strategy
Our long-term strategy Why we are here To be the most customer-centric company in Australia and New Zealand national australia bank Who we are here for Customers [@2 Colleagues Customers who trust us and choose us to be their bank K@Y Customer obsessed colleagues who are proud to work at NAB We are
Slide 12: Focused on driving improved customer advocacy
Focused on driving improved customer advocacy Net Promoter Score relative to major bank peers #3 Mass Consumer1 #2 Business2 1 +20 11 +2 +15 -1 8 -3 +10 -2 7 +5 -7 3 -8 +0 -13 -5 Sep 23 Dec 23 Mar 24 Jun 24 Sep 24 Sep 23 Dec 23 Mar 24 Jun 24 Sep 24 NAB Peer 1 Peer 2 Peer 3 NAB Peer 1 Peer 2 Peer 3 #
Slide 13: Customer obsessed colleagues
“Customer obsessed” colleagues Who we are Refreshed colleague strategy to support Colleague engagement score remains top quartile1 strategic execution • Colleague strategy centred on 3 pillars • Building a customer centric culture • Talent acquisition and retention • Leaders who inspire and support
Slide 14: Business & Private Banking
Business & Private Banking Australia’s leading business bank servicing the business & personal banking needs of SME customers1 Deep sector More bankers in Integrated HNW Relationship-led specialisations Deep credit more places offering capability Increasingly enabled Agri, Health, CRE >6,000 custome
Slide 15: Australian housing lending
Australian housing lending Strategy RBA owner occupier VR front book pricing1 (%) • Deliver seamless customer, banker and broker experiences supported by investment in digital, data and technology 3 • Continue to manage portfolio returns through a disciplined 2.64 2.67 2.59 approach 2.5 2.41 • Impro
Slide 16: Investing to grow deposits
Investing to grow deposits PB Premier targeting B&PB NAB Portal Pay for secure C&IB NAB Liquidity+ nextgen Mass Affluent segment payments to real estate agents cash management • Leveraging NAB Private Banking expertise to grow and deepen • Faster, safer and easier payments • AI enabled cash manageme
Slide 17: FY24 Financials
FY24 Financials Nathan Goonan Chief Financial Officer
Slide 18: Financial results
Financial results Underlying profit ($m) Cash earnings1 ($m) Statutory profit ($m) (1.8%) 0.2% (0.8%) 5,461 5,362 3,548 3,554 3,494 3,466 1H24 2H24 1H24 2H24 1H24 2H24 P&L key financial indicators 1H24 ($m) 2H24 ($m) 2H24 v 1H24 Net operating income 10,138 10,112 (0.3%) ex Markets & Treasury 9,282 9
Slide 19: Divisional performance aligned to our strategy
Divisional performance aligned to our strategy Underlying divisional profit ($m) Business & Private Corporate & Institutional Personal Banking1 New Zealand Banking2,3 Banking1 Banking2 2.5% 1.9% 5.6% (3.5%) 2,562 2,626 1,214 1,237 1,120 954 1,007 1,081 1H24 2H24 1H24 2H24 1H24 2H24 1H24 2H24 (1) Dur
Slide 20: 2H24 revenue
2H24 revenue Net operating income (HoH) ($m) HoH revenue decrease -0.3% (ex M&T 1.0% increase ) (52) 53 106 (15) (118) 10,125 10,138 10,230 10,112 Sep 23 Mar 24 Volumes Margin Fees & Other Sep 24 Markets & Sep 24 Commissions (ex M&T) Treasury Markets & Treasury (M&T) income breakdown Key revenue dri
Slide 21: Net interest margin
Net interest margin Net interest margin (HoH) -2bps decrease flat ex M&T (0.01%) 0.01% (0.02%) (0.01%) (0.02%) 0.03% NII/OOI offsets (revenue neutral) Includes 4bps (Aust) and 1bp (NZ) impact from higher 1.71% 1.72% replicating portfolio returns 1.70% Sep 23 Mar 24 Lending Margin Funding Costs Depos
Slide 22: Investment spend and productivity
Investment spend and productivity Re-defining investment spend1 FY25 investment spend considerations2 ($m) ~$1,800m • Additional spend to support investment in: $1,638m • A range of existing and new initiatives to drive $1,574m improved customer advocacy 187 • The gradual replacement of complex and
Slide 23: Operating expenses
Operating expenses Operating expenses (YOY) ($m) +4.5% 100 157 4 (453) 99 237 260 4,421 Includes ~$40m Includes: 9,427 9,023 Citi productivity • $85m uplift for financial crime • $80m related to restructuring costs1 Sep 23 Salary related Volume related Technology Depreciation & Productivity Other EU
Slide 24: Asset quality
Asset quality Non-performing exposures (NPL) as a % of GLAs Key 2H24 impacts Increase primarily driven by • Recent increase in Gross Impaired Assets (GIAs), but NPLs remain higher mortgage arrears and B&PB business lending dominated by Default but not impaired • CIC of $365m, up $2m 0.20% 0.15% • In
Slide 25: Business & Private Banking business lending asset quality
Business & Private Banking business lending asset quality Key considerations Non-performing exposures (NPLs) as % of GLAs • Challenging macro environment, broad-based deterioration across industries GIAs as a % of Business GLAs Default but not impaired as a % of Business GLAs1 • Common thematics of
Slide 26: Australian housing lending asset quality
Australian housing lending asset quality1 Arrears increasing as % of GLAs but limited impairment Key considerations • Arrears continuing to rise, primarily reflecting a challenging 2.45% economic environment 1.63% 1.82% • While 2H24 deterioration remains broad-based across loan 1.61% 1.41% types and
Slide 27: Strong provisioning maintained
Strong provisioning maintained Total provision balances higher Key considerations ($m) • Total provisions of $5.9bn represent 1.6x 100% base case scenario (after excluding $334m in 1.56% FLA balances from the 100% base scenario) 1.47% 1.47% 1.47% 1.35% 1.42% • CP of $5.2bn representing 1.47% CRWA 1.
Slide 28: Capital remains above target range
Capital remains above target range Group Basel III CET1 capital ratio (%) 0.17 (0.25) L1: 12.08 L1: 11.91 (0.60) 0.81 0.35 (0.28) 12.15 12.35 12.21 Mar 24 Cash earnings Dividend Credit RWA1 Other RWA2 Share buy-back Other 3 Sep 24 Sep 24 Pro forma4 CET1 considerations Credit risk-weighted assets ($b
Slide 29: Strong funding and liquidity metrics
Strong funding and liquidity metrics Key messages Liquidity position well above regulatory minimums (%) • Maintained strong funding and liquidity position with LCR and NSFR well above regulatory minimums • Final tranches of the TFF repaid in 3Q24 100 % • Term funding issuance diversified across prod
Slide 30: Closing comments
Closing comments Andrew Irvine Chief Executive Officer
Slide 31: Australian economy on track for soft landing
Australian economy on track for soft landing Economic growth slowed in 2024 but expected to Cash rate expected to fall as inflation continues to recover in 2025 and 20261 moderate2 (%) • Cash rate cuts expected to commence from February 2025 Forecasts1 8 with gradual easing to 3.10% by early 2026 7
Slide 32: Businesses under pressure but resilient
Businesses under pressure but resilient Business conditions Conditions around the long run average; confidence remains soft and weakest in retail and wholesale2 • Business conditions have softened over 2024 but stabilising around long-run average; weakest in goods sectors 20 20 • Continued easing in
Slide 33: Key priorities in FY25 aligned to our refreshed strategy
Key priorities in FY25 aligned to our refreshed strategy • Reinforce execution disciplines to drive improved customer advocacy, greater speed and simplification • Continued momentum in business banking, improve proprietary lending and deposit franchises • Retain balance sheet strength and prudent ri
Slide 34: Additional Group Information
Additional Group Information
Slide 35: NAB at a glance
NAB at a glance Cash earnings divisional splits % of Cash earnings1 Key financial data FY24 Business & Private Banking 46% Cash earnings1 $7,102m Personal Banking 16% Cash ROE 11.6% Corporate & Institutional Banking 25% Gross loans & acceptances (GLAs) $738.2bn New Zealand Banking 19% Corporate Func
Slide 36: Operating expenses
Operating expenses Operating expenses (HOH) ($m) +1.6% 25 54 (77) 20 (25) (7) 83 4,421 4,677 4,750 Mar 24 Salary related Volume related Technology Depreciation & Productivity Other EU & Remediation1 Sep 24 & Investment Amortisation (1) EU-related costs of $41m ($48m in 1H24). Customer related remedi
Slide 37: Markets & Treasury income
Markets & Treasury income Markets & Treasury income breakdown ($m) 1,250 911 856 808 753 762 888 738 578 622 580 478 445 392 369 345 343 277 206 262 71 8 26 29 8 0 387 362 345 366 401 397 407 388 403 410 (86) (17) (37) (15) Mar 20 Sep 20 Mar 21 Sep 21 Mar 22 Sep 22 Mar 23 Sep 23 Mar 24 Sep 24 NAB ri
Slide 38: Customer-related remediation
Customer-related remediation Customer-related remediation provision charges1 ($m) 1,189 Continuing operations Discontinued operations 749 1,011 380 654 268 101 137 240 87 245 58 45 43 138 21 143 40 45 178 117 35 95 135 31 97 45 130 20 21 27 8 47 56 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23 1
Slide 39: AUSTRAC Enforceable Undertaking
AUSTRAC Enforceable Undertaking Overview of Enforceable Undertaking Status as at September 2024 Following its investigation, AUSTRAC accepted an An external auditor was appointed in May 2022 and continues Enforceable Undertaking (EU) from NAB in April 2022 to lift its to report to NAB and AUSTRA
Slide 40: Group cash earnings reconciliation to statutory net profit
Group cash earnings reconciliation to statutory net profit NAB uses cash earnings (rather than statutory net profit attributable to owners of the Company) for its internal management reporting purposes and considers it a better reflection of the Group’s underlying performance. Accordingly, informa
Slide 41: Digital transformation, Technology and Innovation
Digital transformation, Technology and Innovation
Slide 42: Technology strategy
Technology strategy Ambition Enabling best in class banking experiences for our customers and colleagues through safe, simple and modern technology Improved customer & De-risk bank Accurate, available data Build resilience colleague experiences and protect customers & analytics • 22 to 1 call centre
Slide 43: Customer Brain
Customer Brain Using data and AI to better understand customers and drive more personalised experiences Business & Private Bank Personal Bank Strengthen NAB’s business Deepen product experiences, banking position engagement and recognition Colleagues Business lending Customer Data Home lending banke
Slide 44: Investing in our digital banking channels
Investing in our digital banking channels Mobile app and internet banking supporting Retail and SME customers NAB Mobile app NAB Internet Banking • Quick and simple registration and login • Modernised technology for faster customer • Fast, secure digital payments experiences • Improved search for be
Slide 45: Manage business banking from anywhere
Manage business banking from anywhere NAB Connect supporting B&PB1 and C&IB customers • Customers can access the platform when needed with +99% service availability • Clients can customise NAB Connect to their business needs through self and assisted service functions • In-built fraud controls such
Slide 46: Investing to protect customers against scams and fraud
Investing to protect customers against scams and fraud FY24 investment and initiatives Key outcomes • >100 FTE added to our investigations and fraud team, • 1.4m real-time customer payment alerts sent with now totalling >570 FTE >$170m in payments subsequently abandoned in FY24 • Real-time customer
Slide 47: Innovating with NAB Ventures
Innovating with NAB Ventures NAB’s venture capital arm that makes investments to promote strategic priorities 22 1 The NAB Ventures team: Works alongside other parts of the bank to incubate and test innovative new customer propositions and 5 leverage new developments in technology Investments Manage
Slide 48: Additional Divisional Information
Additional Divisional Information – Business & Private Banking 50 – Personal Banking 55 – Corporate & Institutional Banking 61 – New Zealand Banking 65
Slide 49: Divisional contributions
Divisional contributions Divisional cash earnings1 FY24 ($m) FY24 v FY23 2H24 ($m) 2H24 v 1H24 Business & Private Banking2 3,257 0.0% 1,611 (2.1%) Personal Banking2 1,174 (19.6%) 618 11.2% Corporate & Institutional Banking3,4 1,772 (3.7%) 873 (2.9%) New Zealand Banking3,5 1,444 (4.6%) 694 (7.5%) (1)
Slide 50: Business & Private Banking
Business & Private Banking1 Cash earnings Revenue Net interest margin ($m) ($m) 0.9% Flat 1.8% (2.1%) 3.36% 3.18% 3.08% 3.03% 8,221 8,299 3,258 3,257 4,113 4,186 1,646 1,611 FY23 FY24 1H24 2H24 FY23 FY24 1H24 2H24 1H23 2H23 1H24 2H24 Business and housing lending GLAs and deposits Credit impairment c
Slide 51: Business & Private Banking business lending
Business & Private Banking (B&PB) business lending Diversified Australian business lending growth (YoY)1 Growth in Other is attributable to Retail and Wholesale Trade, Manufacturing and Denotes lending balance Construction as at 30 September 2024 16.8% 8.1% 9.5% 9.1% 8.2% 5.8% Agri Health CRE3 Other
Slide 52: Private Wealth
Private Wealth Delivering banking, investments and advice to high net worth (HNW) customers via an integrated offer combining JBWere, NAB Private Investments, nabtrade and Private Banking • Growth in deposits, housing lending and FUM supported by • Launch of refreshed JBWere client portal using digi
Slide 53: Building a digital SME business lending platform
Building a digital SME business lending platform Delivering faster, more seamless lending experiences across small to complex customers for all business lending products Application Verification and decisioning Fulfillment and Settlement Simplified digital application Fast, automated decisions Incre
Slide 54: Better business transaction & payments experiences
Better business transaction & payments experiences Innovative digital • NAB Easy Tap - turns a merchant’s Android device into a payment terminal payment • NAB Portal Pay - faster, safer and easier payments for real estate agents and their solutions clients; real estate agents can receive deposits fr
Slide 55: Personal Banking
Personal Banking1 Cash earnings Revenue Net interest margin ($m) ($m) (6.9%) (19.6%) 2.4% 11.2% 2.04% 4,921 1.82% 1.74% 1.75% 4,579 1,461 1,174 2,262 2,317 556 618 FY23 FY24 1H24 2H24 FY23 FY24 1H24 2H24 Mar 23 Sep 23 Mar 24 Sep 24 Housing lending GLAs and deposits Credit impairment charge and as a
Slide 56: Personal Banking
Personal Banking Supporting frontline Growth in proprietary Sustainably grow Market leading in bankers lending deposits unsecured lending • Continued investment in a • Target growth segments • Building a modern platform • Investing in branch network simplified mortgage incl mass affluent to drive to
Slide 57: Continued delivery of Simple Home Loans
Continued delivery of Simple Home Loans FY24 update • 34% broker home loans now approved via Simple • 1.2 days median CXTTUA for proprietary and broker1 Home Loans (SHL) (up from 24% in 1H24) applications through SHL • 95% Retail proprietary applications eligible through • 97% of applications settle
Slide 58: Unsecured lending
Unsecured lending Key considerations Balance and market share1 ($bn) • Momentum in credit cards continued throughout FY24, with 26.4% 26.7% 27.5% strong acquisition and spend performance across NAB and Citi portfolios. Balances peaked in 1H24 reflecting record levels of seasonal spend 0.22 • Portfol
Slide 59: Migration of Citi Consumer Business is a key priority
Migration of Citi Consumer Business is a key priority Integration and migration timeline Key milestones delivered Timeline Jun 22 Sep 22 Mar 23 Jun 23 Mar 24 Dec 251,2 Acquisition High Net Worth New New Mortgages, Target date to completed colleagues unsecured unsecured deposits and complete integr
Slide 60: The daily money companion for the digital generation
The daily money companion for the digital generation - branchless banking, smart technology FY24 highlights Strong customer advocacy Continued growth and strong customer advocacy Overall NPS1 NPS1 <35 yrs Highly rated app • Maintained #2 NPS across peers +33 +38 4.7 • 15% increase in total customers
Slide 61: Corporate & Institutional Banking
Corporate & Institutional Banking1 Cash earnings Underlying profit Net interest margin ($m) ($m) (%) (0.4%) 2.14 2.14 2.08 1.98 (3.7%) 1.9% (2.9%) 2,460 2,451 0.97 1.04 1.05 1,840 1,772 0.87 1,214 1,237 899 873 FY23 FY24 1H24 2H24 FY23 FY24 1H24 2H24 Mar 23 Sep 23 Mar 24 Sep 24 C&IB NIM ex Markets R
Slide 62: Disciplined growth in Corporate & Institutional Banking
Disciplined growth in Corporate & Institutional Banking1 GLA outcomes Higher corporate, funds and Deposits2 ($bn) securitisation lending ($bn) combined with disciplined 137 portfolio management 132 132 7 5 3 54 47 51 23 24 26 104 108 111 53 56 52 Sep 23 Mar 24 Sep 24 Sep 23 Mar 24 Sep 24 Custody Ter
Slide 63: Corporate & Institutional Banking
Corporate & Institutional Banking Deep expertise & Tech-enabled solutions Ongoing simplification & leading capabilities making doing business easier disciplined balance sheet usage Long term relationships Leading Transaction Leading Debt Capital Focused Global Sustainability with target segment Bank
Slide 64: Corporate & Institutional Banking customer metrics
Corporate & Institutional Banking customer metrics Large Corporate & Institutional – NPS1 Large Corporate & Institutional RSI1 Transactional Banking – Relationship Strength Index2 50 630 580 40 550 580 30 520 20 490 530 10 460 0 480 430 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 202
Slide 65: New Zealand Banking
New Zealand Banking1 Cash earnings Revenue Net interest margin (NZ$m) (NZ$m) (0.1%) (4.6%) (2.0%) (7.5%) 2.45% 2.36% 2.37% 2.34% 3,490 3,486 1,513 1,444 750 694 1,761 1,725 FY23 FY24 1H24 2H24 FY23 FY24 1H24 2H24 Mar 23 Sep 23 Mar 24 Sep 24 Business and housing lending GLAs and deposits Credit impai
Slide 66: New Zealand Banking
New Zealand Banking Improved digital Increasing market Simpler, more Focus on capability supporting share in underweight focused bank returns customer growth segments • Above system growth in • Strong focus on returns • Simplified products, fees • Strong customer growth household deposits and given
Slide 67: New Zealand Banking customer metrics
New Zealand Banking customer metrics #2 BNZ Consumer NPS1 #2 BNZ Business NPS2,3 #3 BNZ Large Corporate Relationship Strength Index (RSI)4 10 650 50 4 618 0 600 40 32 570 30 31 -10 -11 550 -11 536 23 -20 500 20 18 -22 465 10 13 -30 450 0 -40 400 Sep 20 Sep 21 Sep 22 Sep 23 Sep 24 Sep 20 Sep 21 Sep 2
Slide 68: New Zealand lending mix
New Zealand lending mix Portfolio breakdown by GLAs – Total NZ$106.8bn Mortgage portfolio breakdown by geography - Total NZ$60.1bn Other 16% Commercial Bay of Plenty 7% Auckland 47% Real Estate Mortgages 7% 56% Waikato 8% Agriculture, Wellington Forestry and 11% Canterbury Fishing 15% 11% Agricultur
Slide 69: New Zealand housing lending key metrics
New Zealand housing lending key metrics New Zealand housing lending Mar 23 Sep 23 Mar 24 Sep 24 Sep 23 Mar 24 Sep 24 Drawdowns1 Total Balances (spot) NZ$bn 56.4 57.7 58.8 60.1 5.9 5.4 6.7 By product - Variable rate 8.9% 8.4% 8.9% 9.6% 8.9% 11.1% 11.4% - Fixed rate 89.6% 90.1% 89.5% 88.7% 89.3% 86.9%
Slide 70: New Zealand customer deposits
New Zealand customer deposits1 Customer deposits balances by product (NZD) Customer deposits percentage by product (NZD) ($bn) (%) $80.0bn $82.3bn $78.5bn 4% 3% 3% 3% 3% $74.2bn $74.6bn 3 3 3 3 3 38% 41% 44% 46% 47% 28 35 37 39 31 21% 21% 16 21% 20% 19% 16 16 16 16 37% 35% 32% 28 25 25 24 25 31% 31%
Slide 71: Additional product information: Australian Housing Lending
Additional product information Australian Housing Lending
Slide 72: Housing lending key metrics
Housing lending key metrics1 Australian housing lending Mar 23 Sep 23 Mar 24 Sep 24 Sep 23 Mar 24 Sep 24 Portfolio Drawdowns3 Total Balances (spot) $bn 333 338 344 3532 40 39 38 Average loan size $’000 per account 345 358 371 381 536 564 564 By product type - Variable rate 68.4% 76.8% 84.7% 89.6% 91
Slide 73: Housing lending practices & policies
Housing lending practices & policies Key origination requirements Loan-to-value (LVR) limits • Income verified using a variety of documents including Principal & Interest – Owner Occupier 95% payslips and/or checks on salary credits into customers’ accounts Principal & Interest – Investor 90% • 10%
Slide 74: Housing lending volume and flow movements
Housing lending volume and flow movements Housing lending flow movements1 ($bn) (4) (14) 49 (29) 351 353 Mar 24 New fundings Interest Pre- External Sep 241 & & payments refinance redraw2 repayments & closures Housing lending by division2,3 ($bn) 239.5 242.1 243.0 103.6 105.2 100.3 12.8 13.5 13.4 Sep
Slide 75: Housing lending portfolio profile
Housing lending portfolio profile Housing lending volume by borrower and repayment Australian mortgages profile1 type1 VIC/TAS 33% Owner Occupier Owner Interest Only, 3.0% Occupier Line of Credit, 2.5% Principal & QLD 14% Interest, Investor 61.0% Interest Only, 12.0% WA 7% NSW/ACT 43% SA/NT 4% Inves
Slide 76: Housing lending portfolio profile
Housing lending portfolio profile Owner occupied lending volume growth1 Investor lending volume growth1 ($bn) ($bn) 3.2% (0.9% HoH) 1.5% (0.3% HoH) 220.7 225.6 227.7 117.4 118.8 119.2 Sep 23 Mar 24 Sep 24 Sep 23 Mar 24 Sep 24 Owner Occupier monthly growth2 Investor monthly growth2 1.6% 1.0% 1.2% 0.6
Slide 77: Housing lending arrears profile
Housing lending arrears profile1 90+ DPD as a % of GLAs by purpose 90+ DPD & GIAs as a % of GLAs 2.5% 1.30% 2.0% 2.0% 1.18% 1.17% 1.5% 1.12% 1.02% 1.09% 1.0% 0.95% 1.0% 0.93% 0.5% 0.85% 0.0% 0.0% Sep 17 Sep 18 Sep 19 Sep 20 Sep 21 Sep 22 Sep 23 Sep 24 Sep 18 Sep 19 Sep 20 Sep 21 Sep 22 Sep 23 Sep 24
Slide 78: Housing lending offset and redraw balances
Housing lending offset and redraw balances1 Offset & redraw balances Offset & redraw balances distribution by number of ($bn) accounts 95 14 90 30% 45% 12 40% 85 25% 10 35% 80 20% 30% 75 8 25% 15% 70 6 20% 65 10% 15% 4 60 10% 5% 2 5% 55 0% 0% 50 0 0 up to 5k 5k to 50k 25k to 50k 50k to 100k 100k to
Slide 79: Housing lending LVR
Housing lending LVR1 LVR breakdown at origination 60% 40% 20% 0% LVR LVR LVR LVR LVR ≤60% 60.01% - 70% 70.01% - 80% 80.01% - 90% >90% Mar 23 Sep 23 Mar 24 Sep 24 Dynamic LVR breakdown of drawn balance2 60% Sep 24 Dynamic LVR 38.5% 40% 20% 0% LVR LVR LVR LVR LVR LVR 90.01% - 100% ≤60% 60.01% - 70% 70
Slide 80: Housing lending fixed rate portfolio profile
Housing lending fixed rate portfolio profile1 Fixed rate (FR) lending book FR home loan contractual expiry profile ($bn) • $28bn FR book at Sep 24, rolls to variable rate (VR) loan at expiry • ~$17bn (~61%) has customer rates below 3%, and only $7.5bn still to expire after Sep 25 • ~85% retention fo
Slide 81: Additional product information: Australian Deposits
Additional product information Australian Deposits
Slide 82: Deposits & transaction accounts
Deposits & transaction accounts1 Customer deposit mix by product Customer deposit percentage by product ($bn) (%) 537 514 523 501 505 26 5% 5% 4% 5% 5% 23 24 23 25 48 8% 8% 9% 9% 9% 45 47 41 42 26% 29% 131 160 170 31% 31% 32% 148 159 22% 111 23% 115 119 126 133 23% 24% 25% 195 39% 35% 175 168 166 16
Slide 83: Deposits & transaction accounts
Deposits & transaction accounts Business & Private Banking1 Personal Banking1 Corporate & Institutional Corporate Functions & ($bn) Banking2 Other3 221 163 137 137 214 157 2 132 132 203 207 151 2 8 7 3 33 146 5 3 30 33 3 34 29 36 28 17 27 17 16 52 54 47 51 15 34 32 28 30 81 85 68 75 24 26 25 23 55 5
Slide 84: Additional information: Group Asset Quality
Additional information Group Asset Quality
Slide 85: Group credit impairment charge
Group credit impairment charge Credit impairment charge as % of GLAs Global 1.4% Financial Crisis 1.2% 1.0% 0.8% 0.6% 0.4% Late 80’s / Early 90’s 0.10% 0.2% Recession -0.1% Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep
Slide 86: Group estimated long run loan loss rate
Group estimated long run loan loss rate Group business mix – GLAs by category Estimating long run loan loss rate NAB Australian Long run Long run Sep 1985 Personal geography net write average average lending 8% off rates as a % of GLAs (1985 – 20242) (2005 – 20242) Home lending3 0.03% 0.03% Home Com
Slide 87: Group lending mix
Group lending mix Gross loans and acceptances by product - $738.2bn Gross loans and acceptances by geography1 Other International 3% Asset New Zealand 13% Overdrafts 1% & lease financing 3% Credit card outstandings 1% Australia 84% Housing loans 56% Housing loans 57.00% Gross loans and acceptances b
Slide 88: Group provisions
Group provisions Total provision Collective provision ($m) ($m) 1.57% 1.62% 1.62% 1.69% 1.31% 1.42% 1.47% 1.47% 1.47% 0.015 0.80% 0.81% 0.81% 0.80% 0.74% 0.74% 0.70% 0.70% 0.72% 0 5,577 5,753 5,897 5,921 5,056 5,214 5,351 5,165 4,826 -0.025 3000 Mar 23 Sep 23 Mar 24 Sep 24 -3% 0 Sep 22 Mar 23 Sep 23
Slide 89: Provisions
Provisions Movement in provisions1 $154m change in provisions for expected credit losses Mar 24 – Sep 24 ($m) (58) 118 210 (116) Net $174m release from forward looking provisions Mar 24 – Sep 24 5,921 5,585 5,767 Sep 23 Mar 24 Underlying Forward Looking Target sector Individually Sep 24 collective p
Slide 90: Expected Credit Losses (ECL) assessment
Expected Credit Losses (ECL) assessment ECL scenarios & weightings Key considerations Total Provision for ECL1,2,3 • Increase in ECL vs Mar 24 primarily reflects 2H24 deterioration in asset quality, partially offset by a net $m 100% Base 100% (probability release of $174m from forward looking provis
Slide 91: Group non retail lending industry sector analysis
Group non retail lending industry sector analysis Key considerations • Challenging macro environment, broad-based deterioration across industries • Sep 24 NPL ratios overweight Business & Private Banking exposures and target sectors with FLAs1 • Recent deterioration most evident in: • Construction,
Slide 92: Target sector forward looking adjustments (FLAs)
Target sector forward looking adjustments (FLAs) Non retail target sectors non-performing exposures as % of lending EAD1 3.0% 2 2.0% CRE - office, retail & THE Retail Trade Construction 1.0% THE Total non retail lending 0.0% Sep 21 Sep 22 Mar 23 Sep 23 Mar 24 Sep 24 Collective provision target secto
Slide 93: ECL provisioning by stages
ECL provisioning by stages Loans and advances by stage1 Provisions by stage2 Provision coverage by stage3 ($bn) ($m) (%) 0.59 0.60 0.61 959 974 5,921 942 5,585 5,767 9 10 8 195 192 1,516 1,639 1,855 217 19.0 18.9 18.1 717 756 772 3,540 3,588 3,400 1.63 0.44 1.84 0.43 1.77 0.42 529 540 666 0.07 0.07
Slide 94: Probability of default (PD) analysis
Probability of default (PD) analysis Non retail IRB EAD1 by probability of default ($bn) Investment grade Sub investment grade Default 65% Sep 24 34% Sep 24 0.68% Sep 24 200 150 100 50 0 0<0.03% 0.03<0.11% 0.11<0.55% 0.55<2.00% 2.00<5.01% 5.01<99.99% 100% Mar 23 Sep 23 Mar 24 Sep 24 Australia and NZ
Slide 95: Australian business lending asset quality
Australian business lending asset quality Business lending credit impairment charge and as a % Business lending non-performing exposure as % of of GLAs GLAs 600 ($m) ($m) 1.66% 0.26% 1.33% 1.43% 500 0.24% 0.14% 0.15% 1.06% 1,001 400 652 626 300 596 200 3,404 295 339 2,664 3,001 100 189 181 2,013 0 -
Slide 96: Australian Business & Private Banking asset quality
Australian Business & Private Banking asset quality B&PB credit impairment charge and as % of GLAs1,2 B&PB non-performing exposures and as % of GLAs1,2 ($m) ($m) 0.21% 0.25% 0.24% 2.12% 0.16% 1.72% 1.79% 1.44% 5,580 314 322 4,588 4,260 1,439 250 12 3,410 200 1,177 1,142 66 281 308 1,034 209 3,446 4,
Slide 97: Business & Private Banking business lending $155bn
Business & Private Banking business lending $155bn Non-performing exposures (NPLs) as % of GLAs Aligned to revised APS 2201 2.66% 2.14% 2.30% 0.60% 1.75% 1.66% 0.37% 0.39% 0.51% 0.33% 1.77% 1.91% 2.06% 0.72% 0.73% 1.33% 0.65% 0.66% 0.58% 0.51% 1.24% 0.30% 0.23% 0.21% 0.22% 0.35% 0.45% Sep 15 Sep 16
Slide 98: Agriculture, forestry & fishing exposures
Agriculture, forestry & fishing exposures1 Group EAD $62.2bn September 2024 Key Australian considerations Weather conditions have been mixed, with favourable conditions on the East Coast and rains in Western Australia, but dry conditions and recent frost events in Western Victoria and South Austra
Slide 99: Commercial real estate (CRE)
Commercial real estate (CRE)1 Gross loans & acceptances (GLAs) Breakdown by total GLAs By sector By geography New Australia Total2 Zealand QLD Residential WA Retail 16% Total CRE (A$bn) 67.1 7.0 74.1 11% VIC 26% Industrial 6% SA 26% 5% Increase/(decrease) from 20% 3.7 - 3.7 Sep 23 (A$bn) Tourism Oth
Slide 100: Commercial real estate
Commercial real estate1 Key asset quality considerations Sector considerations • Non-performing exposures above low levels of recent years but • Slower lending momentum observed in Development remain below longer term historical levels; current experience segment; labour shortages in construction se
Slide 101: Construction
Construction1 Exposure at default Key considerations • Key challenges continue to be around labour availability and subcontractors issues (both availability and completion risk); new housing EAD $13.8bn EAD $13.9bn starts have moderated in the face of rising interest and construction costs 1.9 • ~4%
Slide 102: Retail Trade
Retail Trade1 Exposure at default Key considerations • Despite population growth, ongoing cost of living pressures EAD $15.7bn EAD $15.8bn are resulting in a moderation in overall consumer demand • Consumer segments are being impacted differently 2.4 2.2 including a shift in consumer spending patter
Slide 103: Tourism, hospitality and entertainment
Tourism, hospitality and entertainment1 Exposure at default Key considerations • Industry data suggests trading performance for Tourism and EAD $14.8bn EAD $15.3bn Entertainment operators remains robust, notwithstanding wage input cost increases and reduced discretionary spending 2.0 1.8 • Impacts o
Slide 104: Manufacturing
Manufacturing1 Exposure at default Key considerations • Higher interest rates and input costs have led to deterioration in the Manufacturing industry, particularly those within the EAD $21.3bn EAD $20.3bn food and beverage supply chain 5.0 • Increase in NPL ratio in 2H24 primarily reflects a small n
Slide 105: Additional information: Capital, Funding & Liquidity
Additional information Capital, Funding & Liquidity
Slide 106: Risk-weighted assets
Risk-weighted assets Risk-weighted assets ($bn) (13.0) 0.0 0.2 (5.9) 432.6 413.9 Mar 24 Credit Operational Market IRRBB Sep 24 risk risk risk RWA IRRBB risk-weighted assets ($bn) • Credit RWA growth from lending and asset quality 33.6 30.2 29.5 deterioration more than offset by updated model and met
Slide 107: Capital & Deposit hedges
Capital & Deposit hedges NAB replicating portfolios NAB replicating portfolios1 (%) Replicating portfolio 5 Avg return of replicating portfolio 30 Sep 24 balance Invested out to term of 2H23 1H24 2H24 4 1.81% 2.14% 2.54% Capital AUD $41bn 3 years Deposits AUD $73bn 5 years 3 BNZ replicating portfoli
Slide 108: Internationally comparable capital ratios
Internationally comparable capital ratios 28.2% 28.4% 29.5% 20.5% 20.2% 21.1% 17.8% 17.5% 18.1% 20.3% 14.2% 19.9% 20.3% 14.1% 20.9% 12.2% 12.1% 14.1% 12.1% 12.4% 14.7% Sep 23 Mar 24 Sep 24 Equivalent internationally comparable ratios3 APRA Common Equity Tier 1 ratios APRA Tier 1 ratios APRA Total ca
Slide 109: Key regulatory changes impacting capital and funding
Key regulatory changes impacting capital and funding Change CY24 CY25 CY26 CY27 Additional Tier 1 (AT1) Capital Discussion paper released Consultation Implementation Market Risk (APS 116) Implementation Counterparty Credit Risk (APS 180) Implementation Interest Rate Risk in the Banking Book Implemen
Slide 110: Loss Absorbing Capacity and Additional Tier 1
Loss Absorbing Capacity and Additional Tier 1 Key messages APRA changes to major banks’ capital minimums • Based on the Group's RWA and Total Capital position at 30 20.92% Sep 24, NAB meets APRA’s Jan 26 LAC requirements 18.25% 18.25% Tier 2, 6.25% • NAB has $0.6bn of existing Additional Tier 1 and
Slide 111: Asset Funding
Asset Funding Funded balance sheet Group source and uses of funds, 12 months to 30 September 24 $980bn $980bn ($bn) Short Term Wholesale, 12% Term Funding 38 42 Liquid Assets1, 23% <12 months, Other Other Deposits3 1 2% 9 2 1 Short 6% 2 Term 25 30 Assets2 2% Customer Other Short Term Equity Term Ter
Slide 112: Liquidity
Liquidity Liquidity coverage ratio (quarterly average) Net stable funding ratio composition ($bn) Group NSFR 117% as at 30 Sep 24 130% LCR 140% LCR 139% LCR 137% LCR $678bn $578bn Liquids and Wholesale funding Other Assets 155 150 149 157 Other 1 3 Non- Financial Other Loans 2 2 Corporate Deposits 2
Slide 113: Term wholesale funding profile
Term wholesale funding profile Historical term funding issuance1 ($bn) 5.7 6.7 8.1 5.0 4.3 5.0 years years years years years years 39 40 1 1 37 33 29 3 26 14 29 30 30 18 21 13 10 5 9 9 7 2 2 FY19 FY20 FY21 FY22 FY23 FY24 Tenor2 RBNZ Funding Facilities RBA Term Funding Facility Senior Unsecured and S
Slide 114: Diversified & flexible term wholesale funding portfolio
Diversified & flexible term wholesale funding portfolio FY24 Issuance by product type1 FY24 Issuance by currency1 RMBS 5% Other 1% Covered 13% AUD 45% EUR 15% Subordinated 9% NZD 2% Senior 73% USD 37% Outstanding issuance by product type 1, 2 Outstanding issuance by currency1 RMBS 2% JPY 1% Other 5%
Slide 115: Funding costs
Funding costs Indicative term wholesale funding issuance costs1 Average term wholesale funding portfolio costs2 (bps) (bps) 400 130 300 125 200 120 100 115 0 110 Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep 20 20 21 21 22 22 23 23 24 24 21 21 22 22 23 23 24 24 3 yr senior
Slide 116: Additional information: Sustainability
Additional information Sustainability
Slide 117: Sustainability is embedded in our Group Strategy
Sustainability is embedded in our Group Strategy Prioritising support for customers in three areas: Climate action Access to affordable housing First Nations economic advancement First Nations business and Environmental Affordable and specialist community organisation finance ambition housing lendin
Slide 118: FY24 progress against our climate strategy
FY24 progress against our climate strategy Supporting customers to decarbonise and Investing in climate capabilities build resilience • ~8,000 colleagues completed foundational climate • #1 Australian bank for global renewables transactions1 training since 2023 launch, >10,000 completions of • $7.3b
Slide 119: Energy generation exposures
Energy generation exposures Energy generation EAD by fuel source1,2 (AUD$bn) Pre revised capital Post revised capital framework3 framework4 8.58 0.49 8.09 7.54 7.39 0.00 0.24 7.36 7.35 0.00 • 80% of total energy generation financing to 0.68 0.48 1.47 1.38 0.70 0.54 renewables (increase from 77% at 1
Slide 120: Resources exposures
Resources exposures Resources EAD by type1,2,3 (AUD$bn) Pre revised capital Post revised capital framework4 framework5 10.03 9.11 0.57 0.36 0.42 0.81 • Decreasing exposure to thermal coal, on 0.38 0.84 7.54 track to be effectively zero6 by 2030 7.51 7.49 Gold Ore Mining 0.46 excluding performance gu
Slide 121: Thermal coal mining and oil and gas limits
Thermal coal mining and oil and gas limits Thermal coal mining (AUD$bn) exposure1 Oil and gas extraction - (USD$bn) exposure5 Pre revised capital Post revised capital Pre revised capital Post revised capital framework2 framework3 framework 2 framework3 0.46 0.42 0.30 0.24 0.20 0.16 2.34 2.23 21% 23%
Slide 122: FY24 Update: Climate and environment
FY24 Update: Climate and environment Nature and biodiversity Helping communities withstand natural disasters Understanding and supporting our customers. • The NAB Foundation is supporting communities to • Partnering with Macdoch Foundation to support Farming for the withstand and recover from natura
Slide 123: FY24 Update: Housing and First Nations advancement
FY24 Update: Housing and First Nations advancement Affordable and specialist housing Economic advancement for First Nations people • $2.1bn lending provided to help more Australians access • $464m (up 11% YoY) against target to get to $1bn in lending affordable and specialist housing1 against target
Slide 124: FY24 Update: Inclusive and accessible banking
FY24 Update: Inclusive and accessible banking Supporting customers experiencing vulnerability Supporting customers with microfinance1 Supporting customers 40,940 40,641 • >2,800 customers assisted by NAB’s Customer Support Hub – provides specialised extra care to customers experiencing 31,607 31,161
Slide 125: Additional information: Economic data
Additional information Economic data
Slide 126: Australia and NZ key economic indicators
Australia and NZ key economic indicators Australian economic indicators (%)1 NZ Economic indicators (%)1 CY22 CY23 CY24(f) CY25(f) CY26(f) CY22 CY23 CY24(f) CY25(f) CY26(f) GDP growth2 2.6 1.6 1.0 2.2 2.3 GDP growth2 2.2 0.0 -0.3 3.0 2.9 Unemployment3 3.5 3.9 4.4 4.5 4.3 Unemployment3 3.4 4.0 5.2 5.
Slide 127: Consumers are adjusting, but the labour market has held up
Consumers are adjusting, but the labour market has held up Consumption growth has slowed1 The household savings rate has fallen as real incomes have been pressured2 (%) (%) 16 Quarterly Year-ended 16 20 12 12 Household savings rate 15 8 8 4 4 10 0 0 -4 -4 5 -8 -8 0 -12 -12 -16 -16 -5 2007 2011 2015
Slide 128: House prices have rebounded and rents remain strong
House prices have rebounded and rents remain strong House prices growth has diverged across states1 Rents growth has been strong in most capital cities2 (Index) (%) Sydney Melbourne Brisbane Sydney Melbourne Brisbane 190 15 180 Adelaide Perth Hobart Adelaide Perth Hobart 170 10 160 150 5 140 130 0 1
Slide 129: The business sector has remained resilient
The business sector has remained resilient Confidence is low, but conditions are around average1 Capacity utilisation is above average1 (Net Bal.) (%) 85 20 0 80 -20 Business Confidence -40 75 Capacity utlilisation Business Conditions -60 Long-run average -80 70 2008 2010 2012 2014 2016 2018 2020 20
Slide 130: Inflation is high but moderating
Inflation is high but moderating Inflation has moderated but remains above target1 Services inflation has been more persistent2 (%) (%) (%) 7 7 8 6 6 6 5 Quarterly Year-ended 5 4 Goods Services 4 4 3 3 2 2 2 0 1 1 0 0 -2 2004 2008 2012 2016 2020 2024 2006 2009 2012 2015 2018 2021 2024 The exchange r
Slide 131: New Zealand economy
New Zealand economy Economy has contracted since Q3 2022, unemployment Recovery in commodity export prices over 2024 2 rate still low but has moved up1 (GDP, $NZ billion, chain prices) (Unemployment rate, %) (Index, January 2019 = 100) 6 180 75 160 70 5 140 65 120 4 60 100 Total index Dairy 80 55 3
Slide 132: New Zealand housing
New Zealand housing House prices have been under pressure, but have Sales volumes up in 2024, but still at a modest level2 stabilised in recent months1 (Index) (‘000s) 4,500 10 4,000 8 3,500 6 3,000 4 Auckland 2,500 2 National ex Auckland 2,000 0 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 202
Slide 133: Abbreviations and disclaimers
Abbreviations and disclaimers
Slide 134: Abbreviations
Abbreviations ALA Alternative Liquid Assets HQLA High Quality Liquid Assets CET1 Common Equity Tier 1 Capital IRB Internal Ratings Based approach CIC Credit impairment charge ICMA International Capital Market Association CLF Committed Liquidity Facility LCR Liquidity Coverage Ratio CP Collective Pro
Slide 135: Source and notes
Source and notes Slide 12 (1) Sourced from RFI Global – Atlas, measured on 6 month rolling average. Based on all consumers, 18+ and excludes consumers with personal income of $260k+ and/or investible assets $2.5m+ and/or footings of over $850k. Ranking based on absolute scores, not statistically sig
Slide 136: Disclaimer
Disclaimer The material in this presentation is general background information about the NAB Group current at the date of the presentation on 7 November 2024. The information is given in summary form and does not purport to be complete. It is intended to be read by a professional analyst audience in
National Australia Bank — FY2024 Earnings Presentation on 6ix