National Australia Bank Limited · ASX:NAB
National Australia Bank — FY2009 Earnings Presentation
87 slides from National Australia Bank's earnings presentation, Oct 28, 2009
Slide 1: Investor presentation
Investor presentation 28 October 2009 Cameron Clyne, Group Chief Executive Officer Mark Joiner, Executive Director Finance National Australia Bank Limited ABN 12 004 044 937
Slide 2: Solid performance in challenging environment
Solid performance in challenging environment Sep 09 Change on Sep 09 Change on Full year Sep 08 Half year Mar 09 Revenue ($m) 16,906 9.7% 8,392 (1.4%) Costs ($m) (7,580) (4.2%) (3,810) (1.1%) Underlying Profit ($m) 9,326 14.6% 4,582 (3.4%) B&DDs ($m) (3,815) (53.3%) (2,004) (10.7%) Cash Earnings ($m
Slide 3: Outlook – cautious optimism
Outlook – cautious optimism United Kingdom Expect GDP growth to re-commence but slowly <1% in 2010 Australia Indicators suggest past worst: > Housing markets have modestly Business confidence has strengthened improved sharply > Commercial property prices stabilising 72% Large government deficit will
Slide 4: 2010 Priorities
2010 Priorities Leadership, culture and talent Balance sheet strength Efficiency and cost management Supporting customers and improving reputation Continuing to address portfolio priorities 4
Slide 5: FY09 Financials
SK National Australia Bank FYO9 Financials | 3énab | @ Clydesdale Bank + ®§ Yorkshire Bank O6nz Great Western Bank mic y —7
Slide 6: Group financial result
Group financial result Full year to Half year to ($m) Sep 09 Sep 08 Change (%) Sep 09 Mar 09 Change (%) Net interest 12,072 11,142 8.3% 6,188 5,884 5.2% income Other operating 4,834 4,272 13.2% 2,204 2,630 (16.2%) income (incl MLC) Net operating 16,906 15,414 9.7% 8,392 8,514 (1.4%) income Operating
Slide 7: Underlying business performance
Underlying business performance Home currency Full year to Half year to (m) Sep 09 Sep 08 Change (%) Sep 09 Mar 09 Change (%) Underlying profit Business and Private 3,664 3,205 14.3 1,856 1,808 2.7 Banking Retail Banking 1,831 1,529 19.8 935 896 4.4 MLC 407 576 (29.3) 198 209 (5.3) UK Region £529 £5
Slide 8: Contribution to cash earnings
Contribution to cash earnings Home currency Full year to Half year to (m) Sep 09 Sep 08 Change (%) Sep 09 Mar 09 Change (%) Cash Earnings Business and Private 1,811 2,028 (10.7) 796 1,015 (21.6) Banking Retail Banking 963 900 7.0 508 455 11.6 MLC (pre IoRE) 311 408 (23.8) 153 158 (3.2) UK Region £78
Slide 9: Tier 1 capital position
Tier 1 capital position (%) 0.78 (0.47) (0.28) 0.14 (0.05) (0.37) 0.40 0.04 8.96 0.51 (0.30) 0.25 8.31 2.15 11.32 1.72 6.59 6.81 Core Tier 1 Tier 1 Hybrid Mar 09 Cash Dividend (net RWA Hybrid capital Underwrite Institutional Non-cash Acquisitions Change in UK FCTR Other $0.1bn Sep 09 Sep 09 $29.3bn
Slide 10: Credit RWA movement
Credit RWA movement NAB Group: Credit RWA movement March 2009 to September 2009 ($bn) 11.8 (15.3) 11.5 (3.2) (14.4) 321.6 312.0 Mar 09 Credit Quality Calculation Exchange Rate Net Grow th RWA Sep 09 Adjustm ents Optim isation 10
Slide 11: Non-cash earnings items (after tax)
Non-cash earnings items (after tax) Full year to Half year to ($m) Sep 09 Sep 08 Change (%) Sep 09 Mar 09 Change (%) Cash earnings 3,841 3,916 (1.9%) 1,814 2,027 (10.5%) (incl IoRE) Distributions 245 312 (21.5%) 101 144 (29.9%) Treasury shares (256) 375 Large (344) 88 Large FV & HI (79) (89) 11.2% (
Slide 12: Funding and liquidity
Funding and liquidity Group Stable Funding Index (SFI) Liquid asset holdings ($bn) 68 71 72% 76% 78% 66 70% 58 16% 19% 19% 17% 37 39 42 29 53% 56% 57% 59% 29 29 29 29 Mar 08 Sep 08 Mar 09 Sep 09 Mar 08 Sep 08 Mar 09 Sep 09 C us t o m e r F unding Inde x T e rm F unding Inde x M a r 0 7 le v e l Liqu
Slide 13: Retail Deposit Volumes
Retail Deposit Volumes Australia Banking Market Share (Spot)* ($bn) 11.8% 7.3% Australia Banking grew at 1.5x system 4.8% 123 132 (excluding transfers) 105 110 48 53 43 UK deposits annual growth 14%, nearly 4x 42 system 63 67 75 79 NZ market share steady, 1H decline regained in 2H Mar 08 Sep 08 Mar
Slide 14: Business Lending Volumes
Business Lending Volumes Australia Banking Market Share (Spot)* ($bn) All Australia + 3.7% vs system - 3.5%. 5.6% Australia Banking SME up + 7.7% 8.1% 7.6% UK region – average volumes - 0.5% vs system - 2.2% 113 107 NZ Region – increase in market share in key 99 92 business segments Mar 08 Sep 08 Ma
Slide 15: Retail Lending Volumes
Retail Lending Volumes Australia Banking Market Share (Spot)* ($bn) Mortgages 7.4 7.5 7.4 2.0% > Australia Banking grew below system 7.1 2.0% 4.2% > UK and NZ – in line with system 148 151 154 142 Unsecured personal lending > Flat for all businesses Mar 08 Sep 08 Mar 09 Sep 09 H o us ing Uns e c ure
Slide 16: Net interest margin
Net interest margin Group NIM – Attribution Analysis 0.01% (0.06%) 0.02% 0.07% (0.01%) (0.12%) 0.03% (0.02%) 0.08% 2.25% 2.25% 2.07% Sep 08 HY Australian UK NZ Banking nabCapital Mar 09 HY Australian UK NZ Banking nabCapital Other Sep 09 HY Banking Banking Banking Banking Australia Banking UK Region
Slide 17: Other operating income
Other operating income Other Operating Income (excl MLC) MLC Net Income ($m) ($m) 220 226 204 185 2,091 1,690 1,675 426 1,325 385 335 344 Mar 08 Sep 08 Mar 09 Sep 09 Mar 08 Sep 08 Mar 09 Sep 09 Investments Insurance Global Markets (inc nabCapital FUM Treasury) Income ($m) ($bn) 1,079 0.86% 0.91% 0.9
Slide 18: Costs (including MLC)
Costs (including MLC) Operating expenses: Contribution to Net Increase ($m) 172 124 (20) (140) 92 94 (18) 7,580 7,276 7,316 Sep 08 Aust Bank MLC UK Region NZ Region nabCapital GWB Other* Sep 09 Jaws and CTI momentum Investment spend ($m) CTI FY07 CTI FY08 CTI FY09 343 445 331 483 50.8% 46.9% 43.9% 8
Slide 19: B&DD charge and provision coverage
B&DD charge and provision coverage B&DD charge B&DD charge ($m) ($m) 2,300 2,300 1,900 1,900 1,500 1,500 1,100 1,100 700 700 300 300 -100 -100 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Australia United Kingdom Specific Provision Collective Provision Economic
Slide 20: Group portfolio and asset quality
Group portfolio Gross loans and acceptances by product and by region as at September 2009 Risk rated non-retail exposures* UK NZ Term Other 23% 26% 26% Acceptances 14% 9% Lending 13% 29% nabCapital 11% BBB+ to BBB- 33% Overdrafts 35% 36% 4% 77% 74% 74% Leasing Great 23% Investment Investment A+ to A
Slide 21: UK Region Asset Quality
UK Region Asset Quality Gross loans and acceptances by product as at September 2009 UK B&DD Charge (£33.5bn) Commercial Commercial (£m) Property - Property - Investment Development 17% 6% Unsecured 6% Other business 34% 253 168 115 60 Mortgages 37% Mar 08 Sep 08 Mar 09 Sep 09 Development lending Gro
Slide 22: Specialised Group Assets – Pro Forma Portfolio
Specialised Group Assets – Pro Forma Portfolio “Non-franchise” activity Approx A$24bn credit risk weighted assets (CRWAs) representing approx A$20bn of commitments, A$17bn drawn Indicative CRWA split: > Conduit transactions A$9bn > Vanilla corporate loans A$8bn > Leveraged loans A$3bn > Project fina
Slide 23: nabCapital Securitisation Portfolio
nabCapital Securitisation Portfolio Overall performance – FY09 Portfolio $13.1bn Sep 09 ($17.0bn Mar 09). Exits of $1.9bn in 2H09 Portfolio performance in FY09 as expected: downgrades and credit events as anticipated Ongoing ratings methodology reviews and close management attention SCDOs - $1.6bn B
Slide 24: 2010 Priorities
2010 Priorities Leadership, culture and talent Balance sheet strength Efficiency and cost management Supporting customers and improving reputation Continuing to address portfolio priorities 24
Slide 25: Questions
SK National Australia Bank | 3énab | @ Clydesdale Bank + ®§ Yorkshire Bank O6nz Great Western Bank mic y —7
Slide 26: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 27: Australia Banking
Australia Banking Business lending Retail deposits Retail lending ($bn) ($bn) 7.3% ($bn) 5.6% 11.8% 8.1% 4.8% 132 123 7.4 7.5 7.6% 105 110 7.4 53 7.1 2.0% 48 2.0% 42 43 4.2% 113 151 154 107 148 99 142 67 75 79 92 63 M ar 08 Sep 08 M ar 09 Sep 09 M ar 08 Sep 08 M ar 09 Sep 09 M ar 08 Sep 08 M ar 09 S
Slide 28: Australia Banking: Net interest margin
Australia Banking: Net interest margin September 2009 up 12bps on March 2009 Lending Deposits 2.8% 0.13% (0.02%) (0.02%) 0.00% 0.03% 0.00% 2.6% 2.4% 2.65% 2.53% 2.2% 2.0% Mar 09 NIM Margin Mix Change Margin Mix Change Treasury Asset Sep 09 NIM Change Change Liability Mix September 2009 up 17bps on S
Slide 29: Business and Private Banking - Australia
Business and Private Banking - Australia Business lending1 Revenue ($bn) ($m) 2.6% 5.6% 5.2% 8.1% 9.4% 2,729 2,799 2,595 7.6% 426 OOI 2,371 541 507 113 107 546 99 2,373 NII 92 2,088 2,188 1,825 Mar 08 Sep 08 Mar 09 Sep 09 Mar 08 Sep 08 Mar 09 Sep 09 Costs Underlying profit ($m) ($m) 921 943 2.7% 896
Slide 30: Business and Private Banking - Australia
Business and Private Banking - Australia Business customer satisfaction1 Transaction banking market share and trend Percentage share and basis point change of primary relationships, by customer segment 2 25 +10 +70 +50 7.00 6.56 6.36 +80 +10 6.00 20 +30 (40) +30 5.00 4.40 +50 +20 15 +30 4.00 3.56 3.
Slide 31: Business and Private Banking: SME Business
Business and Private Banking: SME Business* Diverse assets Portfolio quality*** Business 65% Property & Business Services 49% 65% 66% 67% Construction 8% Retail Trade 35% 34% 33% 8% Housing 35% Other 12% Accom m odation, Cafes, Pubs & Restaurants Sep 08 M ar 09 Sep 09 Finance & Insurance 7% 4% Manuf
Slide 32: Retail Banking - Australia
Retail Banking - Australia Retail deposits Housing loans ($bn) 10.4% ($bn) 11.6% 1.1% 2.4% 2.4% 2.4% 48 53 42 43 87 88 85 83 Mar 08 Sep 08 Mar 09 Sep 09 Mar 08 Sep 08 Mar 09 Sep 09 Costs Revenue ($m) ($m) 2.5% 6.0% 794 811 811 815 5.8% 1,750 1,707 52.1% 50.3% 47.5% 46.6% 1,611 1,523 Mar 08 Sep 08 Ma
Slide 33: Australia Banking Mortgages Portfolio – $157bn
Australia Banking Mortgages Portfolio – $157bn Geography Low doc loans $3.1bn outstanding (2.0% of housing book) LVR capped at 60% (without LMI) Vic 28% Inner-city apartments Qld 21% $5.1bn outstanding Approx 3.3% of housing book SA 5% Other LVR on the portfolio remains stable NSW 35% WA 11% Custome
Slide 34: MLC
MLC FUM Expenses ($bn) ($m) (16%) 21% CAGR (1.2%) 2.0 (16%) 400 350 (15.3) (2.1) (2.3) (0.6) 300 99.2 250 83.6 85.0 14.0 (12.8) (0.1) 3.0 200 70.1 150 Sep Sep Mar Sep Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 07 08 09 09 Funds under management Net flows Investment earnings Other Premiu
Slide 35: MLC Net Margins
MLC Investments Margins FUM by Asset Class 9% 2% 0.94% 31% 0.92% Net Margins (0.01%) 0.90% (0.01%) 2% 0.88% 0.04% 0.91% 33% 2% 0.90% (0.01%) 7% 0.86% 0.88% (0.01%) 0.02% 0.86% 14% 0.84% Ma An Ot Se An FU Ot Ma FU Se Australian Cash Australian Fixed Interest r0 n uit he p0 nu M he r0 M p0 8 ies r 8 i
Slide 36: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 37: nabCapital
nabCapital Underlying profit Revenue by line of business ($m) Global Markets $1,913m & Treasury CGR 13.1% 1,035 ($197m) Structuring & Investments 848 731 Corporate $348m Finance 578 458 502 Institutional $746m Lending (400) 0 400 800 1,200 1,600 2,000 2,400 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09
Slide 38: nabCapital - strong Global Markets Sales & Trading income
nabCapital - strong Global Markets Sales & Trading income in the September 2009 half albeit below the March 2009 half run rate Global Markets Trading Income ► External conditions have enabled Global ($m) ($m) Markets to perform strongly through: 400 20 > Increased customer flows 300 15 > Wider produ
Slide 39: nabCapital - Treasury benefiting from large movements in interest rates
nabCapital - Treasury benefiting from large movements in interest rates Markets Treasury Income ► Consistent with the Group’s objective of ($m) keeping the balance sheet strong, nabCapital Treasury successfully: 336 > Managed short term wholesale funding (less 285 than 12 months) 120 > Managed the G
Slide 40: nabCapital – ~70% of the Corporate Lending back book repriced
nabCapital – ~ 70% of the Corporate Lending back book repriced Corporate Lending Net Interest Margin ► Focus on total customer return and managing risk in the current environment 2.02% ► Margins improving as the business 1.42% reprices to reflect current market 1.21% 1.30% conditions and higher fund
Slide 41: nabCapital: Rate of portfolio degradation slowing
nabCapital: Rate of portfolio degradation slowing Gross impaired assets as % gross loans and Stabilised Collective Provisions as a % of acceptances decreased from June highs Credit RWAs ($m) ($m) 2,000 4.00% 1,500 2.00% 1,500 3.00% 1.50% 1,000 1,000 2.00% 1.00% 500 500 1.00% 0.50% 0 0.00% 0 0.00% Se
Slide 42: Securitisation Portfolio Summary
Securitisation Portfolio Summary Corporates (SCDOs) – A$1.6bn Deal 1 Deal 2 Deal 3 Deal 4 Deal 5 Deal 6 A$284 A$227 A$227 A$246 Tranche size A$300m A$300m (US$250m) (US$200m) (US$200m) (NZ$300m) Portfolio Notional Amount (A$b) $53 $21 $18 $29 $23 $28 Attachment Point – 30 Sept 2009 4.23% 5.63% 6.23%
Slide 43: Securitisation Portfolio Summary
Securitisation Portfolio Summary Credit Wrapped ABS – A$0.8bn Portfolio 1 Portfolio 2 Current NAB Exposure A$443m A$343m (US$390m) (US$302m) Average Portfolio Rating (includes Bond Level Policies) Ba2/BB+ B3/B Portfolio Guarantor MBIA (B3/BB+) AMBAC (Caa2/CC) % of Underlying Asset with Wrap 48.7% 36
Slide 44: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 45: UK Region: Drivers
UK Region: Drivers Business lending Retail deposits Housing (£bn) (£bn) (£bn) 15% 10% 12% 20 20 20 10% 10% 8% 15 15 15 6% 10 5% 10 5% 10 4% 0% 2% 5 5 5 16.8 18.0 19.2 19.1 17.5 18.9 20.1 21.5 11.4 11.7 11.9 12.0 0% 0 -5% 0 0% 0 -2% Mar 08 Sep 08 Mar 09 Sep 09 Mar 08 Sep 08 Mar 09 Sep 09 Mar 08 Sep 0
Slide 46: UK Region: Net interest margin
UK Region: Net interest margin September 2009 up 21bps on March 2009 Lending Deposits 2.7% 0.33% (0.02%) (0.18%) 2.5% 0.36% (0.14%) 2.3% 0.00% (0.14%) 2.1% 1.9% 2.35% 2.14% 1.7% 1.5% Mar 09 NIM Margin Mix Change Margin Mix Change Increased Other Funding and Sep 09 NIM Change Change liquidity liquidi
Slide 47: Basis risk, liquidity and funding costs impacts - UK
Basis risk, liquidity and funding costs impacts - UK Market dislocation costs (£m) 140 120 Basis Risk Liquidity Costs Other Funding Costs 100 80 60 40 20 0 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Spreads Barclays, % Typical 3 year Credit Spread RBS Britannia 5 HBOS, 3m OIS to 3m LIBOR Spread Dunfe
Slide 48: Basis risk mitigation - UK
Basis risk mitigation - UK Business Lending Balances Base Related Products as % of Total BL Libor linked products as % Total BL 65% 60% 55% 50% 45% 40% 35% Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Mortgage book at Sep 08 Mortgage book at Sep 09 Re-pr
Slide 49: UK Region: Operating expenses
UK Region: Operating expenses Operating expenses: Full year comparison (£m) 34 (10) 23 (11) 4 8 717 669 Sep 08 Efficiency Investment Growth Business as Performance Other Sep 09 savings projects strategy usual based initiatives remuneration Operating expenses: Trend (£m) 379 360 358 361 358 359 344 3
Slide 50: Funding mix - UK
Funding mix - UK Stable funding index 97.2% 100.6% 84.7% 85.2% 20.9% 21.7% 12.0% 12.7% 72.7% 72.5% 76.3% 78.9% Mar 08 Sep 08 Mar 09 Sep 09 Note: Stable funding index and funding mix CFI TFI R e t a il c o v e r ra t io charts based on spot balances. Funding mix 59% 53% 13% 15% 11% 7% 8% 6% 6% 6% 8%
Slide 51: UK portfolio composition
UK portfolio composition 2009 Total portfolio composition Gross Loans & Acceptances £33.5bn Mortgages 100% 37% Business Lending Mortgages Unsecured £19.0bn £12.3bn £2.2bn £33.5 bn 57% 37% 6% Business Unsecured Commercial Non Residential IHL PL Cards Other Prop Property £9.5bn £2.8bn £1.0bn £0.5bn (m
Slide 52: UK Region: Asset quality
UK Region: Asset quality Total 90+ days past due as % gross Coverage ratio loans & acceptances (£m) 1.5% 300 1.2% 250 1.0% 1.0% 200 0.8% 150 0.6% 100 0.4% 0.5% 50 0.2% 0 0.0% 0.0% Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 04 04 05 05 06 0
Slide 53: UK Commercial property investment & development lending
UK Commercial property investment & development lending* Investment lending Development lending Residential 41% Other 2% Industrial 11% Industrial 2% Other 1% Tourism & Leisure 5% Residential Tourism & 85% Leisure 8% Retail 2% Office 4% Retail 20% Office 19% Investment lending by balance Development
Slide 54: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 55: New Zealand Region
New Zealand Region Business lending Retail deposits Retail lending (NZ$bn) 5.9% (NZ$bn) 3.0% (NZ$bn) 1.3% 12.1% 5.0% 23.6 24.3 13.8% 22.2 23.3 1.4 1.4 1.4 1.4 2.9% 2.1% 12 .1 12 .7 13 .0 3.0% 11.6 2 3 .5 2 2 .2 2 5 .2 2 3 .3 2 4 .0 2 4 .5 19 .8 17 .4 10 .6 11.2 10 .9 11.3 M ar 08 Sep 08 M ar 09 Sep
Slide 56: New Zealand: Consistent focus in a challenging environment
New Zealand: Consistent focus in a challenging environment Cash Earnings down 12.9% year-on-year driven by NZ Region – Revenue v Expense growth bad debts charges in line with credit cycle (NZ$m) Adapting to the crisis – strengthening the Balance Sheet 800 700 > Liquidity levels increased, funding di
Slide 57: New Zealand: Net interest margin
New Zealand: Net interest margin September 2009 down 19 bps on March 2009 Lending Deposits 2.55% 0.03% (0.22%) 2.45% 0.20% 2.35% 0.01% (0.02%) (0.01%) 2.25% (0.18%) 2.15% 2.23% 2.05% 2.04% 1.95% Mar 09 NIM Margin Change Mix Change Margin Change Mix Change Lending v Other ERC Benefit Sep 09 NIM Depos
Slide 58: New Zealand: Asset Quality
New Zealand: Asset Quality increase in lead indicators in line with credit cycle but net write-offs remain low Total 90+ days past due as % GLAs The increase in 90+ Days Past Due and Impaired Assets is in line with the credit cycle and has moved (NZ$m) off the low base from prior years 300 The incre
Slide 59: GWB: Maintaining focus in a challenging environment
GWB: Maintaining focus in a challenging environment Strong relative financial performance > Cash earnings of US$53m (A$73m), net interest margin of 3.76% and cost-to-income ratio 48.9% Continued strong customer funding performance with deposit / loan ratio at 118% Maintaining strong asset quality >
Slide 60: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 61: Group gross loans & acceptances
Group gross loans & acceptances Group asset composition – growth by Retail Portfolio – Outstandings Volume product segment ($bn) (A$m) Group Retail Oustandings Annualised Growth Rate 250,000 16% Non Retail 200,000 12% Retail - 150,000 8% secured 100,000 Retail - 4% unsecured 50,000 0 0% -15 -10 -5 0
Slide 62: 90+ days past due as a % of GLA
90+ days past due as a % of GLA Group1 Australia Banking1 0.45% 0.45% 0.30% 0.30% 0.15% 0.15% 0.00% 0.00% Mortgages Business Loans Personal Mortgages Business Loans Personal Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 UK Region NZ Region 0.45% 0.45% 0.30% 0.30
Slide 63: Impaired assets as a % of GLA
Impaired assets as a % of GLA Group1 Australia Banking1 3.00% 3.00% 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% Mortgages Business Mortgages Business Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 UK Region NZ Region 3.00% 3.00% 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% Mortga
Slide 64: Attribution analysis
Attribution analysis Collective Provision attribution – Group ($m) 168 (38) (136) 86 (78) 14 368 378 142 3,545 3,553 2,649 Sep 08 R e t a il N o n R e t a il F a ir V a lue E c o no m ic F X Im pa c t M ar 09 R e t a il N o n R e t a il F air V a lue F X Im pa c t Sep 09 C yc le Specific Provision a
Slide 65: Australia Banking
Australia Banking Portfolio break up – total $283bn Australian Mortgages Sep 09 Mar 09 Sep 08 Owner Occupied 66.3% 65.4% 64.7% Investment 33.7% 34.6% 35.3% Mortgages 56% Low Document 2.0% 2.2% 2.1% Proprietary 77.2% 76.7% 76.3% Other 4% Third Party Introducer 22.8% 23.3% 23.7% Overdrafts 3% LMI Insu
Slide 66: UK Region
UK Region Portfolio break up – total £33.5bn UK Mortgages Sep 09 Mar 09 Sep 08 Owner Occupied 77% 75% 74% Commercial Investment 23% 25% 26% Property Low Document 0% 0% 0% 23% Mortgages 37% Proprietary 77% 77% 75% Third Party Introducer 23% 23% 25% LMI Insured % of Total HL Portfolio 1% 1% 1% Loan to
Slide 67: New Zealand Region
New Zealand Region Portfolio break up – total NZ$50.7bn New Zealand Mortgages NZD$m Sep09 Mar 09 Sep08 Low Document 0.14% 0.09% 0.02% Commercial Proprietary 100% 100% 100% Property 12% Mortgages 50% Third Party Introducer Nil Nil Nil Agriculture, Forestry and LMI Insured % of Total HL Portfolio 4.0%
Slide 68: Commercial Real Estate – Group Summary
Commercial Real Estate – Group Summary1 Total $74.5bn 17% of Gross Loans & Acceptances Residential 16% Industrial 15% Tourism & Leisure 6% Other 4% Land 13% A$bn Aus UK NZ Asia US Total Office 29% nabCapital 7.4 1.3 1.7 1.2 11.6 Retail 17% Regional Banks 41.4 15.0 5.1 0.1 1.3 62.9 Total 48.8 16.3 6.
Slide 69: Commercial Real Estate – Australia Banking
Commercial Real Estate – Australia Banking Total $41.4bn 15% of Gross Loans & Acceptances State NSW VIC QLD Other Total (excludes nabCapital – Australia) Location % 33% 26% 23% 18% 100% Loan Balance < $5m 15% 13% 10% 7% 45% Industrial 16% Loan Balance > $5m < $10m 6% 4% 3% 3% 16% Residential 9% Othe
Slide 70: Commercial Real Estate - UK Region
Commercial Real Estate - UK Region Total £7.7bn 23% of Gross Loans & Acceptances Region Scotland North South London Total Location % 26% 45% 18% 11% 100% Residential Loan Balance < £2m 13% 26% 12% 4% 55% Industrial 9% 43% Loan Balance > £2m < £5m 6% 10% 4% 3% 23% Loan Balance > £5m 7% 9% 2% 4% 22% L
Slide 71: Commercial Real Estate - New Zealand Region
Commercial Real Estate - New Zealand Region Total NZ$6.3bn 12% of Gross Loans & Acceptances Other (excludes nabCapital - NZ) Region Auckland Regions Total Location % 39% 61% 100% Loan Balance < NZ$5m 15% 33% 48% Residential Industrial 15% Loan Balance > NZ$5m < NZ$10m 5% 9% 14% 12% Other 4% Loan Bal
Slide 72: Commercial Real Estate - nabCapital
Commercial Real Estate - nabCapital Total $11.6bn 25% of Gross Loans & Acceptances nabCapital - Location AUS NZ UK Asia Total Balance A$bn $7.4bn $1.7bn $1.3bn $1.2bn $11.6bn Other 7% Location % 64% 15% 11% 10% 100% Office 30% Loan Balance < $5m 9% 1% 0% 0% 10% Tourism & Leisure 5% Loan Balance > $5
Slide 73: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 74: Dividend
Dividend Dividends (cents per share) First Half Second Half 97 95 83 83 83 84 75 73 83 83 83 87 97 72 80 73 2002 2003 2004 2005 2006 2007 2008 2009 Payout 59.2% 60.7% 72.6% 78.2% 67.3% 67.4% 81.4% 73.6% ratio 74
Slide 75: Group Capital ratios
Group Capital ratios (%) 14 12 12.19 11.48 10 10.93 8 8.96 8.31 7.35 6 6.59 6.81 5.60 4 2 0 Sep 08 Mar 09 Sep 09 Core Tier 1 Tier 1 Total Capital 75
Slide 76: Funding profile remains robust
Funding profile remains robust Term funding maturity profile* ($bn) FY 10 Refinancing 20 Requirement 15 10 5 0 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Beyond Mar 14 Funding of core assets** The Group’s focus is on maintaining a strong SFI Customer Debt that has a remaining ter
Slide 77: Diversified funding portfolio
Diversified funding portfolio Issuer Currency USD 32% GBP 12% BNZ 7% EUR 6% NAB 84% JPY 6% Clydesdale Bank 9% Other 4% AUD 40% Type Weighted average maturity of term funding issuance Public - (years) Offshore 23% 4.6 Private 3.7 Placem ent 26% Public - Dom estic 51% Mar 09 Sep 09 77
Slide 78: UK FSA Capital Comparison – Basel II
UK FSA Capital Comparison – Basel II Summarised below are details of current key differences as pertinent to the Group and identified by the ongoing Australian Bankers’ Association (ABA) study “Comparison of Regulatory Capital Frameworks – APRA and FSA”.1 Item Details of differences Impact on Bank’s
Slide 79: UK FSA Capital Comparison – Basel II
UK FSA Capital Comparison – Basel II Estimated Impact on NAB’s capital position The following table illustrates the impact on the Group’s capital position considering these key differences between APRA and UK FSA Basel II guidelines. This reflects only a partial list of the factors requiring adjustm
Slide 80: Basel II Risk Weighted Assets
Basel II Risk Weighted Assets Asset Class ($m) Sep 09 Mar 09 RWAs RWA/EAD % RWAs RWA/EAD % Corporate & Business 179,601 57% 192,112 56% Mortgages 47,924 23% 44,449 22% Retail 14,941 50% 7,601 52% Standardised* 62,468 66% 70,038 58% Other Assets 7,041 92% 7,416 82% Total Credit RWAs 311,975 48% 321,6
Slide 81: IRB Eligible Provisions vs Expected Losses
IRB Eligible Provisions vs Expected Losses ($m) Sep 09 Mar 09 Expected losses (EL): a regulatory Collective Provision 2,249 2,412 measure under Basel II on a gross- of-tax basis, representing losses Regulatory specific provision 467 360 based on long-term estimates and IFRS specific provision 1,351
Slide 82: Additional Information
Additional Information Australia Banking and MLC nabCapital UK Region New Zealand and GWB Asset quality Capital and Funding Economic outlook
Slide 83: Economic conditions
Economic conditions Annual % growth in global trade, global GDP System credit growth % change year on year and OECD economies - 1970 - 2010 24 8 18 21 OECD growth World economic growth (F) 7 16 Australia (F) 18 6 14 15 5 12 12 4 10 9 3 8 6 2 6 3 1 New Zealand 4 0 0 2 United Kingdom -3 -1 -2 0 -6 Wor
Slide 84: Australia Regional Outlook
Australia Regional Outlook Australia is one of the best performing economies in Economic the OECD – its economy stagnated in 2009 whereas CY07A CY08A CY09 (f) CY10 (f) CY11 (f) Indicators (%) (a) output has fallen heavily in most others. GDP growth 3.9 2.4 0.5 2.0 3.5 Economy has been supported by s
Slide 85: UK Regional Outlook
UK Regional Outlook Deep recession under way – the worst of the Economic Indicators postwar period with an expected cumulative CY07A CY08A CY09(f) CY10(f) CY11(f) (%) drop in output of 6% - but economy now positioned to start growing again. GDP growth 2.7 0.7 -4.7 0.5 1.9 Very big public sector stim
Slide 86: NZ Regional Outlook
NZ Regional Outlook The recession which began in Q1 2008 ended in Economic Indicators (%) CY07A CY08A CY09(f) CY10(f) CY11(f) Q2 2009. Leading indicators of activity, including business and consumer confidence surveys, GDP growth 3.2 0 -1.6 2.3 3.3 point to accelerating growth over the next 12 month
Slide 87: For further information visit www.nabgroup.com or contact Investor Relations
Disclaimer: This document is a presentation of general background information about the Group’s activities current at the date of the presentation, 28 October 2009. It is information in a summary form and does not purport to be complete. It is to be read in conjunction with the National Australia Ba
National Australia Bank — FY2009 Earnings Presentation on 6ix