National Australia Bank Limited · ASX:NAB
National Australia Bank — Debt Investor Presentation (February 2019)
31 slides from National Australia Bank's debt investor presentation, Feb 11, 2019
Slide 1: NAB Capital Notes 3 Investor Presentation
For personal use only NAB CAPITAL NOTES 3 INVESTOR PRESENTATION February 2019
Slide 2: Important Notice
IMPORTANT NOTICE This document has been prepared by National Australia Bank Limited ABN 12 004 044 937 (“NAB”) in relation to its proposed offer of NAB Capital Notes 3. A prospectus in respect of the offer of NAB Capital Notes 3 was lodged with ASIC on 11 February 2019 (“Prospectus”). The Prospectus
Slide 3: Investment overview
NAB CAPITAL NOTES 3 Investment overview Issuer National Australia Bank Limited (“NAB”) Size and A$750 million, with the ability to raise more or less. The Offer includes a Reinvestment Offer to Eligible CPS Holders Use of Proceeds The proceeds will be used for general corporate purposes For pe
Slide 4: Offer Summary
NAB CAPITAL NOTES 3 Offer Summary On 11 February 2019, NAB issued a “resale notice” under the CPS Terms. That notice confirms that on 20 March 2019, all CPS Resale CPS on issue will be mandatorily purchased by a nominated purchaser appointed by NAB for $100 per CPS (CPS Resale Proceeds) unless a cir
Slide 5: Options available to Eligible CPS Holders
OPTIONS AVAILABLE to Eligible CPS Holders1 Alternative 1 No separate application payment is required under the Reinvestment Offer – your CPS Resale Proceeds will be used as the application payment Applications must be for a minimum of 50 Notes (A$5,000) and multiples of 10 Notes (A$1,000) therea
Slide 6: Comparison to NAB instruments
NAB CAPITAL NOTES 3 Comparison to NAB instruments CPS II NAB National Income NAB Convertible NAB Capital Notes Ordinary Feature Term deposit Subordinated Securities Preference Shares (CPS) NAB Capital Notes 2 Shares Notes 2 NAB Capital Notes 3 For personal use only Common Equity Capital classificati
Slide 7: Comparison to NAB instruments (cont.)
NAB CAPITAL NOTES 3 Comparison to NAB instruments (cont.) NAB Capital Notes NAB Subordinated National Income NAB Convertible Feature Term deposit NAB Capital Notes 2 Ordinary Shares Notes 2 Securities Preference Shares NAB Capital Notes 3 For personal use only Yes – applies to Yes – applies to Yes –
Slide 8: Timeline
NAB CAPITAL NOTES 3 Timeline For personal use only There are certain other events that could occur at any time while NAB Capital Notes 3 are on issue which may result in NAB Capital Notes 3 being Converted, Redeemed, Resold or Written Off 8
Slide 9: Summary of certain events that may occur
SUMMARY OF CERTAIN EVENTS that may occur Is APRA Do conditions What value will a Holder receive for In what form will that value be For personal use only Event When? approval apply? each NAB Capital Note 3? provided to Holders? required? 1 On 19 June 2028 or the next Distribution Payment Date Mandat
Slide 10: Mandatory Conversion
MANDATORY CONVERSION • On the Mandatory Conversion Date, if NAB Capital Notes 3 have not been Converted, Written Off, Redeemed or Resold beforehand, NAB must Convert NAB Capital Notes 3 into Ordinary Shares, For personal use only provided the Mandatory Conversion Conditions are satisfied Mandatory C
Slide 11: Distributions
DISTRIBUTIONS NAB Capital Notes 3 are expected to pay quarterly Distributions, expected to be fully franked. A Distribution will be paid provided the Directors decide to pay it, and provided a Payment Condition does not exist on the Distribution For personal use only Payment Date. A Payment Conditio
Slide 12: Loss Absorption Event
NAB CAPITAL NOTES 3 Loss Absorption Event A Loss Absorption Event is each of: Loss Absorption a Common Equity Trigger Event Events For personal use only a Non-Viability Trigger Event A Common Equity Trigger Event will occur if NAB’s Common Equity Tier 1 Capital (CET1 Capital) Common Equity R
Slide 13: Ranking Upon Winding Up
RANKING Upon Winding Up Examples Examples of existing NAB obligations and securities1 Higher Ranking For personal use only Liabilities preferred by law Savings accounts and term deposits and secured debt Secured liabilities and covered bonds Unsubordinated unsecured Bonds and notes, e.g. senio
Slide 14: Buffers and pre-emptive actions to protect holders
BUFFERS AND PRE-EMPTIVE ACTIONS to protect NAB Capital Notes 3 holders NAB’s capital position and earnings provide a buffer for NAB Capital Notes 3 holders The Capital Conservation Buffer (CCB) restricts the ability for NAB to distribute earnings should NAB’s CET1 capital ratio fall below 8.0%
Slide 15: Key Dates
NAB CAPITAL NOTES 3 Key Dates Important Dates for the Offer Date Important Dates for CPS holders Date 7.00pm (Melbourne Record date for determining Eligible CPS Holders for 7.00pm (Melbourne For personal use only Record Date for Securityholder Offer time) on the Reinvestment Offer time) on 7 Februar
Slide 16: About NAB
For personal use only ABOUT NAB NAB CAPITAL NOTES 3 INVESTOR PRESENTATION
Slide 17: Longer Term Strategic focus
ABOUT NAB Longer Term Strategic focus PURPOSE BACK THE BOLD WHO MOVE AUSTRALIA FORWARD For personal use only VISION TO BE AUSTRALIA’S LEADING BANK, TRUSTED BY CUSTOMERS FOR EXCEPTIONAL SERVICE NPS positive and #1 of major Australian banks (priority segments) Cost to Income ratio towards 35% OBJECTIV
Slide 18: NAB at a glance
NAB AT A GLANCE Solid performance indicators ~33,000 ~9 million ~900 160 years For personal use only Employees1 Customers 1 Branches/Business centres 1 in operation 1 CASH EARNINGS DIVISIONAL SPLIT1 Key Financial Data FY18 1Q196 Corporate & Consumer Institutional Cash Earnings2 $6.493 bn $1.65 bn Ba
Slide 19: Performance Summary
PERFORMANCE SUMMARY Consistent over time Financial Results FY141 FY151 FY161 FY171 FY181 Cash earnings ($m)2 6,4936 For personal use only 5,055 6,222 6,483 6,642 NIM 1.91% 1.90% 1.88% 1.85% 1.85% Cash ROE 11.6% 14.8% 14.3% 14.0% 13.3%6 Balance Sheet Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 CET1 ratio (APR
Slide 20: Capital Position
CAPITAL POSITION On track to achieve 10.5% CET1 Ratio by 1 Jan 2020 GROUP BASEL III COMMON EQUITY TIER 1 CAPITAL RATIO1 For personal use only (%) Capital generation +8bps (+1bps ex DRP) 0.80 (0.63) (0.09) (0.08) (0.01) 10.21 10.20 Mar 18 Cash earnings Dividend Underlying Customer-related Other Sep 1
Slide 21: Asset Funding
ASSET FUNDING Stable structural balance sheet metrics FUNDED BALANCE SHEET1 SOURCE AND USE OF FUNDS 30 SEPTEMBER 2018 ($bn) For personal use only $730bn $730bn Source of funds Use of funds 20 Liquid Assets4, ST Wholesale 28 15% Funding, 14% Term Funding < 9 12 Months, 4% 6 1 Other Short Term Assets5
Slide 22: Asset Quality and Provisioning
ASSET QUALITY AND PROVISIONING Remains Prudent CREDIT IMPAIRMENT 90+ DPD, GIAs & WATCH LOANS AS A % OF GLAs ($m) For personal use only 0.16% 0.14% 0.15% 0.14% 0.13% 425 394 416 373 406 1.13% 1.02% 1.21% 1.20% 100 89 160 71 59 1.07% 325 305 256 302 347 0.85% 0.85% 0.70% 0.71% 0.71% Sep 16 Mar 17 Sep
Slide 23: Risks Emerging, But Australian Economy remains sound
RISKS EMERGING But Australian Economy remains sound ECONOMIC CONSIDERATIONS NAB BUSINESS CONDITIONS AND CONFIDENCE1 Index For personal use only • Solid GDP growth and low unemployment 30 • Above average business conditions 20 • Strong population growth 10 • Orderly house price moderation so far • Tr
Slide 24: Building a Better Bank for Customers
BUILDING A BETTER BANK FOR CUSTOMERS ROYAL COMMISSION FINAL REPORT1 For personal use only The final report of the Royal Commission into the Banking, Superannuation and Financial services industry was released on 4 February 2019. The report made 76 recommendations NAB responded on 5 February 2019
Slide 25: Current Regulatory Proposals: Capital
CURRENT REGULATORY PROPOSALS Capital INCREASING LOSS ABSORBING CAPACITY1 UNQUESTIONABLY STRONG2 For personal use only The proposals are consistent with the Financial System Inquiry In July 2017, APRA advised that ADIs using Advanced Internal recommendations to implement an framework sufficient t
Slide 26: Key Risks
For personal use only KEY RISKS NAB CAPITAL NOTES 3 INVESTOR PRESENTATION
Slide 27: Summary of Key Risks
NAB CAPITAL NOTES 3 Summary of Key Risks1 NAB Capital Notes 3 are NAB Capital Notes 3 do not constitute deposit liabilities of NAB, are not Protected Accounts for the purposes of not deposit liabilities the Banking Act or any other accounts with NAB and are not guaranteed or insured by any person.
Slide 28: Summary of Key Risks (cont.)
NAB CAPITAL NOTES 3 Summary of Key Risks1 (cont.) Distributions paid on NAB Capital Notes 3 are expected to be fully franked. The effect of Distributions being franked is to reduce the cash amount received by Holders on each Distribution Payment Date by an amount equal to the relevant level of fra
Slide 29: Summary of Key Risks (cont.)
NAB CAPITAL NOTES 3 Summary of Key Risks1 (cont.) NAB has certain early Subject to the prior written approval of APRA and certain conditions being met, NAB has the right to Conversion, Redemption Convert, Redeem or Resell NAB Capital Notes 3 on 17 June 2026, or because of a Tax Event, or a Regulat
Slide 30: Key Contacts
NAB CAPITAL NOTES 3 Key Contacts Issuer – NAB Arranger and Joint Lead Manager – NAB Bradley Harper Nicholas Chaplin For personal use only Group Treasurer (Acting) Head of Hybrid and Structured Capital Origination Mobile: +61 (0) 427 481 051 Phone: +61 (02) 9237 9518 E-mail: Bradley.Harper@nab.com.au
Slide 31: Thank you
For personal use only THANK YOU
National Australia Bank — Debt Investor Presentation (February 2019) on 6ix