National Australia Bank Limited · ASX:NAB
National Australia Bank — Debt Investor Presentation (December 2024)
93 slides from National Australia Bank's debt investor presentation, December 2024
Slide 1: Debt Investor Update December 2024
Debt Investor Update December 2024 This presentation is general background information about the NAB Group. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular inve
Slide 2: Key messages
Key messages • Sound FY24 financial performance benefitting from a more stable 2H24 operating environment • Australian economy on track for soft landing, business activity remains resilient • Focus on disciplined execution over past 4 years has delivered good balance sheet momentum and improved retu
Slide 3: 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 May 2025 with Forecasts1 8 gradual easing to 3.10% by mid 2026 7 7 • Lab
Slide 4: 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 5: 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 6: 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 4.3 4.5 4.3 Unemployment3 3.4 4.0 5.2 5.
Slide 7: 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 ($m) 2H24 v 1H24 Net operating income 10,138 10,112 (0.3%) ex Markets & Treasury 9,282 9
Slide 8: Delivering improved shareholder returns over time
Delivering improved shareholder returns over time Cash return on equity1 Basic cash EPS1 (cents) 247 221 229 199 154 12.9% 11.7% 11.6% 10.7% FY20 FY21 FY22 FY23 FY24 8.3% Dividends per share (cents) 167 169 151 127 60 FY20 FY21 FY22 FY23 FY24 Payout ratio2 FY20 FY21 FY22 FY23 FY24 38.9% 63.7% 68.4%
Slide 9: 2H24 revenue
2H24 revenue Net operating income (HoH) ($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 10: 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 11: 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 12: 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 $2m 0.15% 0.20% • In
Slide 13: Strong provisioning maintained
Strong provisioning maintained Total provision balances higher Key considerations ($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 14: 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 15: Business & Private Banking business lending $155bn
Business & Private Banking business lending $155bn Non-performing exposures (NPLs) as % of GLAs Aligned to revised APS 2201 2.66% 2.14% 2.30% 0.60% 1.75% 1.66% 0.37% 0.39% 0.51% 0.33% 1.77% 1.91% 2.06% 0.72% 0.73% 1.33% 0.65% 0.66% 0.58% 0.51% 1.24% 0.30% 0.23% 0.21% 0.22% 0.35% 0.45% Sep 15 Sep 16
Slide 16: Australian housing lending asset quality
Australian housing lending asset quality1 Arrears increasing as % of GLAs but limited impairment Key considerations • Arrears continuing to rise, primarily reflecting a challenging 2.45% economic environment 1.63% 1.82% • While 2H24 deterioration remains broad-based across loan 1.61% 1.41% types and
Slide 17: Housing lending offset and redraw balances
Housing lending offset and redraw balances1 Offset & redraw balances Offset & redraw balances distribution by number of ($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 18: 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 19: 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 20: 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 21: 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 22: Additional information: Strategy
Additional information Strategy
Slide 23: Our long-term strategy
national Our long-term strategy australia bank Why we are here To be the most customer-centric company in Australia and New Zealand Who we are here for Customers ([<e@>) 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
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: ubank: 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 31: 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 32: 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 137 132 132 portfolio management 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 33: 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 34: 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 $80bn finance ambition by 2030
Slide 35: Additional information: Group & Divisional Performance
Additional information Group & Divisional Performance
Slide 36: 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) $738.2bn New Zealand Banking 19% Corporate Func
Slide 37: Divisional contributions
Divisional contributions Divisional cash earnings1 FY24 ($m) FY24 v FY23 2H24 ($m) 2H24 v 1H24 Business & Private Banking2 3,257 0.0% 1,611 (2.1%) Personal Banking2 1,174 (19.6%) 618 11.2% Corporate & Institutional Banking3,4 1,772 (3.7%) 873 (2.9%) New Zealand Banking3,5 1,444 (4.6%) 694 (7.5%) (1)
Slide 38: Business & Private Banking
Business & Private Banking1 Cash earnings Revenue Net interest margin ($m) ($m) 0.9% Flat 1.8% (2.1%) 3.36% 3.18% 3.08% 3.03% 8,221 8,299 3,258 3,257 4,113 4,186 1,646 1,611 FY23 FY24 1H24 2H24 FY23 FY24 1H24 2H24 1H23 2H23 1H24 2H24 Business and housing lending GLAs and deposits Credit impairment c
Slide 39: Business & Private Banking (B&PB) business lending
Business & Private Banking (B&PB) business lending Diversified Australian business lending growth (YoY)1 Growth in Other is attributable to Retail and Wholesale Trade, Manufacturing and Denotes lending balance Construction as at 30 September 2024 16.8% 8.1% 9.5% 9.1% 8.2% 5.8% Agri Health CRE3 Other
Slide 40: Personal Banking
Personal Banking1 Cash earnings Revenue Net interest margin ($m) ($m) (6.9%) (19.6%) 2.4% 11.2% 2.04% 4,921 1.82% 1.74% 1.75% 4,579 1,461 1,174 2,262 2,317 556 618 FY23 FY24 1H24 2H24 FY23 FY24 1H24 2H24 Mar 23 Sep 23 Mar 24 Sep 24 Housing lending GLAs and deposits Credit impairment charge and as a
Slide 41: Unsecured lending
Unsecured lending Key considerations Balance and market share1 ($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 42: 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 43: 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 44: Customer-related remediation
Customer-related remediation Customer-related remediation provision charges1 ($m) 1,189 Continuing operations Discontinued operations 749 1,011 380 654 268 101 137 240 87 245 58 45 43 138 21 143 40 45 178 117 35 95 135 31 97 45 130 20 21 27 8 47 56 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23 1
Slide 45: Investment spend and productivity
Investment spend and productivity Re-defining investment spend1 FY25 investment spend considerations2 ($m) ~$1,800m • Additional spend to support investment in: $1,638m • A range of existing and new initiatives to drive $1,574m improved customer advocacy 187 • The gradual replacement of complex and
Slide 46: AUSTRAC Enforceable Undertaking
AUSTRAC Enforceable Undertaking Overview of Enforceable Undertaking Status as at September 2024 • Following its investigation, AUSTRAC accepted an • An external auditor was appointed in May 2022 and continues Enforceable Undertaking (EU) from NAB in April 2022 to lift its to report to NAB and AUSTRA
Slide 47: Additional information: Capital, Funding & Liquidity
Additional information Capital, Funding & Liquidity
Slide 48: Risk-weighted assets
Risk-weighted assets Risk-weighted assets ($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 deterioration more than offset by updated model and 29.5 met
Slide 49: 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 50: 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 51: 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 52: 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 53: 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 $578bn Liquids and Wholesale funding Other Assets 155 150 149 157 Other 1 3 Non- Financial Other Loans 2 2 Corporate Deposits 2
Slide 54: Term wholesale funding profile
Term wholesale funding profile Historical term funding issuance1 ($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 55: Additional information: Group Asset Quality
Additional information Group Asset Quality
Slide 56: 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 57: 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 58: Group lending mix
Group lending mix Gross loans and acceptances by product - $738.2bn Gross loans and acceptances by geography1 Other International 3% Asset Overdrafts 1% New Zealand 13% & lease financing 3% Credit card outstandings 1% Australia 84% Housing loans 56% Housing loans 57.00% Gross loans and acceptances b
Slide 59: Group provisions
Group provisions Total provision Collective provision ($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 60: 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 61: 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 $174m from forward looking provis
Slide 62: ECL provisioning by stages
ECL provisioning by stages Loans and advances by stage1 Provisions by stage2 Provision coverage by stage3 ($bn) ($m) (%) 0.59 0.60 0.61 959 974 5,921 942 5,585 5,767 9 10 8 195 192 1,516 1,639 1,855 217 19.0 18.9 18.1 717 756 772 3,540 3,588 3,400 1.63 0.44 1.84 0.43 1.77 0.42 529 540 666 0.07 0.07
Slide 63: Probability of default (PD) analysis
Probability of default (PD) analysis Non retail IRB EAD1 by probability of default ($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 64: 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 65: 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 66: Agriculture, forestry & fishing exposures
Agriculture, forestry & fishing exposures1 Group EAD $62.2bn September 2024 Key Australian considerations • Weather conditions have been mixed, with favourable conditions on the East Coast and rains in Western Australia, but dry conditions and recent frost events in Western Victoria and South Austra
Slide 67: Commercial real estate (CRE)
Commercial real estate (CRE)1 Gross loans & acceptances (GLAs) Breakdown by total GLAs By sector By geography New Australia Total2 Zealand QLD Residential WA Retail 16% Total CRE (A$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 68: 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 69: 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 70: 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 71: 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 72: 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 73: Additional information: Australian Housing Lending
Additional information Australian Housing Lending
Slide 74: 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 $’000 per account 345 358 371 381 536 564 564 By product type - Variable rate 68.4% 76.8% 84.7% 89.6% 91
Slide 75: Housing lending practices & policies
Housing lending practices & policies Key origination requirements Loan-to-value (LVR) limits • Income verified using a variety of documents including Principal & Interest – Owner Occupier 95% payslips and/or checks on salary credits into customers’ accounts Principal & Interest – Investor 90% • 10%
Slide 76: Australian housing lending
Australian housing lending Strategy RBA owner occupier VR front book pricing1 (%) • Deliver seamless customer, banker and broker experiences supported by investment in digital, data and technology 3 • Continue to manage portfolio returns through a disciplined 2.64 2.67 2.59 approach 2.41 • Improve p
Slide 77: Housing lending volume and flow movements
Housing lending volume and flow movements Housing lending flow movements1 ($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 ($bn) 239.5 242.1 243.0 103.6 105.2 100.3 12.8 13.5 13.4 Sep
Slide 78: Housing lending portfolio profile
Housing lending portfolio profile Housing lending volume by borrower and repayment Australian mortgages profile1 type1 VIC/TAS 33% Owner Occupier Owner Interest Only, 3.0% Occupier Line of Credit, 2.5% Principal & QLD 14% Interest, Investor 61.0% Interest Only, 12.0% WA 7% NSW/ACT 43% SA/NT 4% Inves
Slide 79: Housing lending arrears profile
Housing lending arrears profile1 90+ DPD as a % of GLAs by purpose 90+ DPD & GIAs as a % of GLAs 2.5% 1.30% 2.0% 2.0% 1.18% 1.17% 1.5% 1.12% 1.02% 1.09% 1.0% 0.95% 1.0% 0.93% 0.5% 0.85% 0.0% 0.0% Sep 17 Sep 18 Sep 19 Sep 20 Sep 21 Sep 22 Sep 23 Sep 24 Sep 18 Sep 19 Sep 20 Sep 21 Sep 22 Sep 23 Sep 24
Slide 80: Housing lending fixed rate portfolio profile
Housing lending fixed rate portfolio profile1 Fixed rate (FR) lending book FR home loan contractual expiry profile ($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 information: New Zealand
Additional information New Zealand
Slide 82: New Zealand lending mix
New Zealand lending mix Portfolio breakdown by GLAs – Total NZ$106.8bn Mortgage portfolio breakdown by geography - Total NZ$60.1bn Other 16% Commercial Bay of Plenty 7% Auckland 47% Real Estate Mortgages 7% 56% Waikato 8% Agriculture, Wellington Forestry and 11% Canterbury Fishing 15% 11% Agricultur
Slide 83: New Zealand housing lending key metrics
New Zealand housing lending key metrics New Zealand housing lending Mar 23 Sep 23 Mar 24 Sep 24 Sep 23 Mar 24 Sep 24 Drawdowns1 Total Balances (spot) NZ$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 84: 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 85: Additional information: Sustainability
Additional information Sustainability
Slide 86: 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 • $7.3b
Slide 87: Energy generation exposures
Energy generation exposures Energy generation EAD by fuel source1,2 (AUD$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 1.47 0.00 • 80% of total energy generation financing to 0.68 0.70 0.54 0.48 1.38 renewables (increase from 77% at 1
Slide 88: Resources exposures
Resources exposures Resources EAD by type1,2,3 (AUD$bn) Pre revised capital Post revised capital framework4 framework5 10.03 9.11 0.57 0.36 0.42 0.81 • Decreasing exposure to thermal coal, on 0.38 0.84 7.54 track to be effectively zero6 by 2030 7.51 7.49 Gold Ore Mining 0.46 excluding performance gu
Slide 89: Thermal coal mining and oil and gas limits
Thermal coal mining and oil and gas limits Thermal coal mining (AUD$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 90: Source and notes
Source and notes Slide 26 (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 91: Disclaimer
Disclaimer This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to any “U.S. person” (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”)) or any other jurisdiction
Slide 92: Disclaimer
Disclaimer There are a number of other important factors that could cause actual results to differ materially from those projected in such statements, including (without limitation) a significant change in the NAB Group’s financial performance or operating environment; a material change to law or re
Slide 93: Disclaimer
Disclaimer The presentation is not being distributed to and must not be passed on to persons in the United Kingdom, except for persons (1) who are not UK retail investors* and (2) who: (i) are investment professionals in accordance with Article 19(5) of the Financial Services and Markets Act 2000 (F
National Australia Bank — Debt Investor Presentation (December 2024) on 6ix