National Australia Bank Limited · ASX:NAB
National Australia Bank — FY2021 Earnings Presentation
127 slides from National Australia Bank's earnings presentation, Nov 9, 2021
Slide 1: Full Year Results 2021
FULL YEAR RESULTS 2021 Investor Presentation 9 November 2021 Ross McEwan Chief Executive Officer Gary Lennon Chief Financial Officer © 2021 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686
Slide 2: NAB 2021 Full Year Results Index
NAB 2021 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 127 for legal disclaimer. Financial information in this presentation i
Slide 3: Overview
OVERVIEW ROSS McEWAN Group Chief Executive Officer
Slide 4: Key Messages
KEY MESSAGES Solid financial results in a challenging environment • Business momentum • Maintained strong asset quality Improving shareholder returns while retaining a strong balance sheet Disciplined execution of our strategy is delivering results Maintaining cost focus while investing to support g
Slide 5: Sound Financial Results
SOUND FINANCIAL RESULTS METRIC FY21 FY20 FY21 V FY20 Statutory net profit ($m) 6,364 2,559 large CONTINUING OPERATIONS (EX LARGE NOTABLE ITEMS1) Cash earnings2 ($m) 6,558 4,733 38.6% Underlying profit ($m) 8,989 9,640 (6.8%) Cash ROE 10.7% 8.3% 2.4% Diluted Cash EPS (cents) 191.0 146.9 30.0% Dividen
Slide 6: Improving Shareholder Returns While Retaining a Strong Balance Sheet
IMPROVING SHAREHOLDER RETURNS WHILE RETAINING A STRONG BALANCE SHEET STRONG PROVISIONING AND CAPITAL +43bps of organic CLEAR CAPITAL AND DIVIDEND SETTINGS IN PLACE CET1 (%) generated in 2H21 10.75 – 11.25 % target range for CET1 over time 13.00 12.25 1.56 1.35 11.47 payout ratio range of cash 10.38
Slide 7: We Have a Clear Strategic Ambition
WE HAVE A CLEAR STRATEGIC AMBITION WHY WE ARE HERE To serve customers well and help our communities prosper WHO WE ARE HERE FOR Colleagues Customers Trusted professionals that are proud to be a part of NAB Choose NAB because we serve them well every day WHAT WE WILL BE KNOWN FOR Relationship-led Eas
Slide 8: Successful Execution of Our Strategy
SUCCESSFUL EXECUTION OF OUR STRATEGY KEY MEASURES OF SUCCESS FY21 PROGRESS OUR AMBITION OVER FY23-25 Colleague engagement Top quartile engagement Equal #1 of majors Customer NPS1 but not yet Strategic NPS positive and #1 of majors positive Focus on growing share in target segments, while managing
Slide 9: Focus on Customers and Colleagues Delivering Results
FOCUS ON CUSTOMERS AND COLLEAGUES DELIVERING RESULTS OUR CUSTOMERS OUR COLLEAGUES Strategic NPS1,2 equal first, more work to achieve positive Engagement levels now at top quartile9 -5 -7 -7 -10 -11 -13 -15 76 77 77 66 -20 -25 2019 Jul 20 Jul 21 Top Quartile Sep 19 Jan 20 May 20 Sep 20 Jan 21 May 21
Slide 10: Clear Growth Momentum Across Our Businesses in 2H21
CLEAR GROWTH MOMENTUM ACROSS OUR BUSINESSES IN 2H211 PERSONAL BANKING BUSINESS & PRIVATE 12.0 14.45% 12.0 26.43% 14.38% 1.1x 26.23% 1.4x 9.2 HL system SME BL system growth growth2 6.0 6.0 6.7 0.5 0.0 1.0 14.20% +19 bps 0.0 25.50% +18% 1H21 2H21 1H21 2H21 in cards in Business market share Transaction
Slide 11: Market Leadership in Business & Private Banking
MARKET LEADERSHIP IN BUSINESS & PRIVATE BANKING Focused on simplifying the business and getting the basics right Simplified merchant offering ~550 ~200 New customer FTE savings from • 1.15% flat price on card transactions1 facing roles in process & policy Embedded heightened focus on FY21 changes •
Slide 12: Significantly Improved Home Lending Experience
SIGNIFICANTLY IMPROVED HOME LENDING EXPERIENCE Continued rollout of simple home loans… …simplified, digitised and automated policies and processes • 80% of proprietary applications now eligible • Improved application quality through colleague training • Progressive rollout to Broker and B&PB in FY22
Slide 13: Reshaping Our Portfolio – MLC Exit and Bolt On Acquisitions
RESHAPING OUR PORTFOLIO – MLC EXIT AND BOLT ON ACQUISITIONS MLC Wealth transaction completed in May 2021 86 400 and UBank to deliver market leading digital bank experience Innovating with new features and offerings Sign up in +12% growth in Introduced Smart Search, enabling search customer numbers
Slide 14: Continuing to Invest in Our Key Strategic Priorities
CONTINUING TO INVEST IN OUR KEY STRATEGIC PRIORITIES INVESTMENT SPEND MIX SHIFTING TOWARDS DISCRETIONARY ($m) Discretionary Investment Spend Other Investment Spend 662 FY21 39% 61% 1,259 FY22 ~1,300 ~50% ~50% Targeted • Business Lending transformation • Merchant offering uplift • Investment to uplif
Slide 15: Accelerating Execution of Our Digital, Data and Analytics Agenda
ACCELERATING EXECUTION OF OUR DIGITAL, DATA AND ANALYTICS AGENDA Significant progress in FY21 driving better outcomes for customers and colleagues Payments innovation Improved digital engagement & advocacy • One tap digital health insurance claims through HICAPs, via Apple Wallet • #1 Multichannel B
Slide 16: Climate Action Is a Priority and Key Long-Term Growth Opportunity
CLIMATE ACTION IS A PRIORITY AND A KEY LONG-TERM GROWTH OPPORTUNITY ALIGNING OUR PORTFOLIO TO NET ZERO BY 2050 WELL POSITIONED TO SUPPORT ACTION BY CUSTOMERS • First Australian bank to sign the UNEP FI Collective Commitment to ($bn) #1 Australian bank for global renewables transactions 3 Climate Act
Slide 17: FY21 Financials
FY21 FINANCIALS GARY LENNON Group Chief Financial Officer
Slide 18: Results Impacted by Lower Markets & Treasury Income
RESULTS IMPACTED BY LOWER MARKETS & TREASURY INCOME GROWTH BY KEY FINANCIAL INDICATORS (EX LARGE NOTABLE ITEMS1) (6.8%) 38.6% 240 bps (80 bps) (3.6)% (3.8%) 9,640 8,989 6,558 4,733 10.7 11.1 10.3 4,576 4,413 8.3 3,343 3,215 FY20 FY21 1H21 2H21 FY20 FY21 1H21 2H21 FY20 FY21 1H21 2H21 2 Underlying pro
Slide 19: Solid Underlying Performances
SOLID UNDERLYING PERFORMANCES DIVISIONAL UNDERLYING PROFIT (HOH) ($m) 1H21 2H21 1,854 1,815 • Above system, broad based growth in business lending 2.1% • Higher NIM benefitting from lower funding costs • Additional spend on customer facing roles for growth, higher technology investment Business & Pr
Slide 20: Remediation Work Progressing
REMEDIATION WORK PROGRESSING CUSTOMER-RELATED REMEDIATION PROVISION CHARGES1 Discontinued charges AUSTRAC INVESTIGATION UPDATE ($m) mainly relate to Advice 1,189 Partnerships Adviser • Enforcement investigation Service Fee Program - commenced by AUSTRAC in June higher interest costs and refund rates
Slide 21: Revenue Up Ex Markets & Treasury
REVENUE UP EX MARKETS & TREASURY NET OPERATING INCOME (EX LARGE NOTABLE ITEMS)1 ($m) HoH revenue decline 0.9% (PcP decline 5.8%) 7 (64) 33 180 (228) 8,884 HoH revenue increase 2.0% ex M&T (PcP decline 0.5%) 8,595 8,439 8,367 Sep 20 Mar 21 Volumes Margin Fees & Other Sep 21 (ex M&T) Markets & Sep 21
Slide 22: Markets & Treasury Income Lower
MARKETS & TREASURY INCOME LOWER MARKETS & TREASURY INCOME BREAKDOWN 1,250 ($m) 940 838 808 578 888 572 453 580 392 277 206 402 387 345 372 362 366 (4) (17) 0 71 8 (86) Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Sep 21 Derivative Valuation Adjustment1 Customer Risk Management 2 NAB Risk Management 3 HISTORIC
Slide 23: Net Interest Margin
NET INTEREST MARGIN NET INTEREST MARGIN (EX LARGE NOTABLE ITEMS)1 (0.01%) 0.04% (0.03%) (0.05%) 0.02% (0.02%) 1.78% 1.74% 1.74% 1.69% Sep 20 Mar 21 Lending Funding Costs Deposits Capital & Other Sep 21 Ex Higher Liquids Other Sep 21 Margin Markets & Markets & Treasury Treasury KEY CONSIDERATIONS FOR
Slide 24: Reinvesting Savings for Growth
REINVESTING SAVINGS FOR GROWTH OPERATING EXPENSES (EX LARGE NOTABLE ITEMS)1 ($m) YoY growth 1.8% (207) 364 (411) 42 113 138 99 Investment related Mainly relates to non- recurrence of FY20 7,679 restructuring related costs and 7,817 lower consulting spend FY20 Productivity Remuneration Technology and
Slide 25: Credit Impairment Write-Back, Provisions Modestly Lower
CREDIT IMPAIRMENT WRITE-BACK, PROVISIONS MODESTLY LOWER CREDIT IMPAIRMENT CHARGE (CIC) KEY CONSIDERATIONS 2H21 ($m) 0.54% 0.38% • Underlying CIC write-back of $113m broadly consistent with 1H21, including continued low specific charges and 1,601 (0.04%) (0.03%) 0.10% improved asset quality 1,161 661
Slide 26: Asset Quality Improving
ASSET QUALITY IMPROVING KEY IMPACTS IN 2H21 NEW IMPAIRED ASSETS3 • 90+ DPD & GIA ratio reduction with improvements in ($m) Small number of business lending and Australian home lending well-secured NZ 807 dairy exposures • Reduction in Watch loans reflects aviation sale 276 • New impaired assets rema
Slide 27: COVID-19 Non-Retail Sectors Remain Challenged
COVID-19 NON-RETAIL SECTORS REMAIN CHALLENGED KEY CONSIDERATIONS COVID-19 SECTORS – KEY METRICS SUMMARY • Continued close monitoring of exposures to sectors EAD $bn % of 90+ DPD and GIA to EAD significantly impacted by COVID-19 Mar 21 Sep 21 Mar 21 Sep 21 • While asset quality for these sectors impr
Slide 28: Strong Capital Position
STRONG CAPITAL POSITION GROUP BASEL III COMMON EQUITY TIER 1 CAPITAL RATIO (%) Capital generation +43bps Target range 10.75 - 11.25% 0.75 (0.47) 0.15 (0.12) 0.29 0.03 13.00 12.37 12.25 1 2 Mar 21 Cash earnings Dividend RWA Share M&A Transactions Other Sep 21 Sep 21 3 buy-back pro forma CET1 CONSIDER
Slide 29: Funding & Liquidity
FUNDING & LIQUIDITY KEY MESSAGES COMMITTED LIQUIDITY FACILITY REDUCES TO ZERO IN 20221 ($bn) • Strong funding and liquidity position, well above regulatory 51 minimums • Term Funding Facility (TFF) Additional and Supplementary Allowances totalling $17.6bn were fully drawn in 4Q21, 38 31 supporting l
Slide 30: Outlook
OUTLOOK ROSS McEWAN Group Chief Executive Officer
Slide 31: Our Priorities in FY22
OUR PRIORITIES IN FY22 Continue to focus on execution of Group strategy Supporting customers and colleagues as we manage transition to “COVID-normal” Investing in growth while maintaining cost and capital discipline Resolution of AUSTRAC investigation Complete proposed acquisition of Citigroup's Aus
Slide 32: Additional Information: Divisional Performances
ADDITIONAL INFORMATION DIVISIONAL PERFORMANCES NAB At A Glance 33 We Have Clear Growth Opportunities 34 Divisional Contributions 35 Business & Private Banking 36 Personal Banking 39 Corporate & Institutional Banking 40 New Zealand Banking 42
Slide 33: NAB at a Glance
NAB AT A GLANCE >32,000 ~8 million 748 >160 years Employees Customers Branches/Business centres in operation CASH EARNINGS DIVISIONAL SPLIT1 Key Financial Data FY21 % of FY21 Cash Cash Earnings1 $6,558m Division Earnings Business & Private Banking 38% Cash ROE 10.7% Update Personal Banking 25% Gross
Slide 34: We Have Clear Growth Opportunities
WE HAVE CLEAR GROWTH OPPORTUNITIES CORPORATE & BUSINESS & PRIVATE PERSONAL BANKING INSTITUTIONAL BNZ UBANK BANKING BANKING Clear market leadership Simple & digital Disciplined growth Grow in personal & New customer SME acquisition • Industry-leading relationship bankers, enabled by data and • Flexib
Slide 35: Divisional Contributions
DIVISIONAL CONTRIBUTIONS Divisional cash earnings FY21 ($m) FY21 v FY20 2H21 ($m) 2H21 v 1H21 Business and Private Banking 2,480 0.3% 1,264 3.9% Personal Banking 1,650 14.4% 791 (7.9%) Corporate & Institutional Banking 1,207 (14.8%) 425 (45.7%) New Zealand Banking1 1,230 18.7% 614 (0.3%) (1) In loca
Slide 36: Business & Private Banking
BUSINESS & PRIVATE BANKING CASH EARNINGS REVENUE AND MARGIN ($m) 0.3% (1.0%) 3.9% 3.5% 6,278 6,216 2,472 2,480 2.90% 2.81% 2.83% 2.85% 3,054 3,162 1,216 1,264 FY20 FY21 1H21 2H21 FY20 FY21 1H21 2H21 Mar 20 Sep 20 Mar 21 Sep 21 Total revenue ($m) Net interest margin BUSINESS AND HOUSING LENDING GLAs
Slide 37: Business Lending Growth & Market Share
BUSINESS & PRIVATE BANKING BUSINESS LENDING GROWTH & MARKET SHARE AUSTRALIAN BUSINESS LENDING GROWTH (YOY)1 Denotes lending balance as at 30 September 2021 14.2% 6.6% 3.4% 3.8% 2.6% Agri Health CRE2 Other NAB B&PB3 $35bn $8bn $29bn $45bn $117bn SME AND AGRI BUSINESS LENDING MARKET SHARE 2.3x system
Slide 38: Business & Private Banking – Leveraging High Net Worth
BUSINESS & PRIVATE BANKING BUSINESS & PRIVATE BANKING – LEVERAGING HIGH NET WORTH (HNW) INVESTING IN A NEW INTEGRATED APPROACH IN FY21 Growing home lending 2.3x system growth in 2H21 • Single leadership of Private Bank, JBWere and nabtrade ($bn) • Closer collaboration with Business Banking: 19.5 • H
Slide 39: Personal Banking
PERSONAL BANKING CASH EARNINGS REVENUE AND MARGIN ($m) 14.4% (1.9%) (7.9%) (0.6%) 4,531 4,445 1,650 2.06% 2.02% 2.05% 2.01% 1,442 2,229 2,216 859 791 FY20 FY21 1H21 2H21 Mar 20 Sep 20 Mar 21 Sep 21 FY20 FY21 1H21 2H21 Total revenue ($m) Net interest margin HOUSING LENDING GLAs CREDIT IMPAIRMENT CHAR
Slide 40: Corporate & Institutional Banking
CORPORATE & INSTITUTIONAL BANKING CASH EARNINGS MARGINS AND REVENUE BREAKDOWN1 ($m) ($m) Revenue Margins (14.8%) (7.4%) 1.72% 1.68% 1.68% (45.7%) 1.59% Markets 401 228 revenue down 43.1% 1,416 1,207 0.81% 0.75% Non 0.70% 0.73% 782 1,321 1,272 Markets 425 revenue up Mar 20 Sep 20 Mar 21 Sep 21 3.9% F
Slide 41: Customer Metrics
CORPORATE & INSTITUTIONAL CUSTOMER METRICS BANKING LARGE CORPORATE & INSTITUTIONAL – INTEREST RATE HEDGING3 FOREIGN EXCHANGE4 RELATIONSHIP STRENGTH INDEX1 Relationship Strength Index Relationship Strength Index 620 (Index) (Index) 600 640 650 580 600 600 560 560 540 550 520 520 480 500 500 480 440 4
Slide 42: New Zealand Banking
NEW ZEALAND BANKING CASH EARNINGS REVENUE AND MARGIN (NZ$m) 18.7% 6.0% (0.3%) 3.3% 1,230 2,537 2,689 1,036 2.29% 2.29% 2.24% 616 614 1,323 1,366 2.14% FY20 FY21 1H21 2H21 FY20 FY21 1H21 2H21 Mar 20 Sep 20 Mar 21 Sep 21 Total revenue (NZ$m) Net interest margin BUSINESS & HOUSING LENDING GLAs CREDIT I
Slide 43: Key Customer Metrics
NEW ZEALAND BANKING KEY CUSTOMER METRICS BNZ BUSINESS NPS1,3 25 15 5 -5 -15 -25 -35 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 BNZ Peer 1 Peer 2 Peer 3 BNZ CONSUMER NPS2,3,4,5 40 35 30 25 20 15 10 5 0 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Ju
Slide 44: Lending Mix
NEW ZEALAND BANKING LENDING MIX PORTFOLIO BREAKDOWN – TOTAL NZ$95.1BN MORTGAGE PORTFOLIO BREAKDOWN BY GEOGRAPHY – TOTAL MORTGAGE NZ$52.7BN Wellington 11% Waikato 7% Canterbury 11% Bay of Plenty 5% Commercial Real Estate Mortgages 9% 55% Other 18% Agriculture, Auckland 48% Forestry and Fishing 16% AG
Slide 45: New Zealand Housing Lending Key Metrics
NEW ZEALAND BANKING NEW ZEALAND HOUSING LENDING KEY METRICS New Zealand Housing Lending Mar 20 Sep 20 Mar 21 Sep 21 Sep 20 Mar 21 Sep 21 Portfolio Drawdowns1 Total Balances (spot) NZ$bn 44.8 46.0 49.5 52.7 5.1 9.5 8.8 By product - Variable rate 15.2% 14.1% 12.9% 11.3% 15.1% 11.2% 10.0% - Fixed rate
Slide 46: NZ Customer Deposits by Interest Rate
NEW ZEALAND BANKING NZ CUSTOMER DEPOSITS BY INTEREST RATE NZ CUSTOMER DEPOSITS BY INTEREST RATE (NZD)1 $41.0bn of deposits already at or near zero interest rate $24.2bn $16.8bn $11.3bn $10.5bn $2.4bn $0.9bn less than 0.01% between 0.01% to 0.25% between 0.26% to 0.50% between 0.51% to 0.75% between
Slide 47: Digital Transformation, Technology and Innovation
ADDITIONAL INFORMATION DIGITAL TRANSFORMATION, TECHNOLOGY AND INNOVATION
Slide 48: Simplifying, Digitising and Innovating
SIMPLIFYING, DIGITISING AND INNOVATING NAB Up 59% 1300:1 Ratio of payments now Continued network simplification and executed digitally v/s modernisation to reflect customer needs ~38k in branch Virtual Assistant 13% ~3,500 Conversations 65% YoY Australia Post per week2 Of simple consumer Reduction i
Slide 49: Continued Focus on Mobile Experiences
CONTINUED FOCUS ON MOBILE EXPERIENCES NAB APP – NEW HIGHS IN USAGE AND NPS IMPROVED FUNCTIONALITY IN NABTRADE APP • 80% of all Simple Home Loan modifications done via the • Significant investment to improve app functionality in FY21 NAB App (up from 52% at Sep 2020) • >40% of customer interactions o
Slide 50: Enhanced Unsecured Proposition
ENHANCED UNSECURED PROPOSITION SIMPLIFYING EVERYDAY BANKING NAB BUSINESS CREDIT CARDS STRAIGHTUP CARD • Debit cards added to 3rd party wallets • Launched the NAB StraightUp Card in (including Apple Pay) without the need to 2H20, Australia’s first no-interest credit wait for a physical card Partnersh
Slide 51: Innovating with NAB Ventures
INNOVATING WITH NAB VENTURES NAB Ventures is NAB’s venture capital arm that makes investments to promote strategic priorities • NAB Ventures work alongside other parts of the bank, incubating and testing innovative new customer propositions and leveraging new developments in technology • Manages ove
Slide 52: Our Technology Transformation Underpins Execution of Our Strategy
OUR TECHNOLOGY TRANSFORMATION UNDERPINS EXECUTION OF OUR STRATEGY KEY AREAS OF FOCUS 3 YEAR ACHIEVEMENTS1 Leverage the Cloud, • 54% of total apps2 now running on the cloud and targeting 80% – greater flexibility and reliability Microservices and APIs • Built >300 microservices and >2,500 APIs – incr
Slide 53: Improved Workplace Technology for Colleagues
IMPROVED WORKPLACE TECHNOLOGY FOR COLLEAGUES 2018 Average 10-15min Audio conference Legacy on-premise Service Desk: Outsourced – Rigid Three browsers, logon; only on desk collaboration, slow, limited delivery by 3rd multiple versions <3,500 token Multiple aged phones; email, responsiveness parties r
Slide 54: Australian Business Lending
ADDITIONAL INFORMATION AUSTRALIAN BUSINESS LENDING
Slide 55: Key Metrics
KEY METRICS BUSINESS LENDING REVENUE ($m) 2,428 2,223 2,204 2,205 326 343 329 334 1,880 1,875 1,871 2,102 Mar 20 Sep 20 Mar 21 Sep 21 NII OOI BUSINESS LENDING GLAs ($bn) 215.0 205.1 207.1 220.8 0.1 0.1 0.1 0.1 105.8 95.6 97.1 104.1 109.1 109.4 109.9 116.6 Mar 20 Sep 20 Mar 21 Sep 21 Business & Priva
Slide 56: Business Lending Asset Quality
BUSINESS LENDING ASSET QUALITY 600 BUSINESS LENDING CREDIT IMPAIRMENT CHARGE AND AS BUSINESS LENDING 90+ DPD AND GIAs AND AS % OF GLAs 500 % OF GLAs 0.33% 0.25% ($m) ($m) 0.72% 0.74% 0.62% 0.07% 0.04% 0.66% 400 300 200 274 336 Includes $248m 1,420 1,474 1,528 1,362 100 of Aviation sale related CICs
Slide 57: Business & Private Banking Asset Quality
BUSINESS & PRIVATE BANKING ASSET QUALITY B&PB CREDIT IMPAIRMENT CHARGE AND AS % OF GLAs1 B&PB 90+ DPD AND GIAs AND AS % OF GLAs1 ($m) 0.20% ($m) 1.53% 0.15% 0.13% 1.32% 1.25% 196 1.07% 3,025 0.07% $250.0 126 2,584 2,596 21 70 0.04% 2,111 40 39 1,611 170 7 1,246 1,351 84 6 40 1,036 2 5 84 (21) (7) -0
Slide 58: Australian Housing Lending
ADDITIONAL INFORMATION AUSTRALIAN HOUSING LENDING
Slide 59: Housing Lending Portfolio Profile
HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING REVENUE HOUSING LENDING VOLUME GROWTH1 ($m) ($bn) Owner Occupier Investor 2,085 2,150 1,988 2,038 108 113 10.4% (6.8% HoH) -3.5% (-0.2% HoH) 114 119 172.7 156.4 161.7 1,919 1,977 2,037 104.0 100.6 100.4 1,874 Mar 20 Sep 20 Mar 21 Sep 21 Sep 20 Mar 21
Slide 60: Housing Lending Portfolio Profile
HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING VOLUME BY BORROWER AND AUSTRALIAN MORTGAGES STATE PROFILE2 REPAYMENT TYPE1,2 Owner VIC/TAS 32% Investor Occupier Interest Interest Investor Only, 10.9% Only, 3.4% Principal & QLD 15% Interest, Owner 25.8% Occupier Investor 63.2% 36.8% Owner Occupier
Slide 61: Payments in Advance
HOUSING LENDING PORTFOLIO PROFILE PAYMENTS IN ADVANCE1 INTEREST ONLY CONVERSIONS TO P&I2 ($bn) 60% 50% 2.0 1.5 2.1 40% 36% 37% 2.3 3.8 1.6 1.6 30% 2.4 1.6 1.1 20% 17% 8.2 15% 13% 15% 7.9 7.8 12% 12% 13% 12% 6.4 6.3 6.2 10% 7% 7% 4.8 5.5 5.1 5.2 2% 2% 0% > 1-2 3-12 1-3 <1 On time Behind 1H17 2H17 1H1
Slide 62: Housing Lending Portfolio Quality
HOUSING LENDING PORTFOLIO QUALITY DYNAMIC LVR BREAKDOWN OF DRAWN BALANCE1 LVR BREAKDOWN AT ORIGINATION1 70% 70% 60% Sep 21 Dynamic LVR 38.8% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% LVR LVR LVR LVR LVR LVR LVR LVR LVR LVR >90% ≤60% 60.01% - 70% 70.01% - 80% 80.01% - 90% >90% ≤60% 60.01% - 7
Slide 63: Housing Lending Practices & Requirements
HOUSING LENDING PRACTICES & REQUIREMENTS KEY ORIGINATION REQUIREMENTS LOAN-TO-VALUE RATIO (LVR) LIMITS • Income verified using a variety of documents including payslips Principal & Interest – Owner Occupier 95% and/or checks on salary credits into customers’ accounts Principal & Interest – Investor
Slide 64: Housing Lending Key Metrics
HOUSING LENDING KEY METRICS1 Australian Housing Lending Mar 20 Sep 20 Mar 21 Sep 21 Sep 20 Mar 21 Sep 21 Portfolio Drawdowns2 Total Balances (spot) $bn 302 299 300 309 29 32 49 Average loan size $’000 309 309 310 315 383 401 427 - Variable rate 75.9% 71.9% 67.8% 61.3% 64.0% 53.2% 41.9% - Fixed rate
Slide 65: Other Australian Products
ADDITIONAL INFORMATION OTHER AUSTRALIAN PRODUCTS
Slide 66: Deposits & Transaction Accounts
DEPOSITS & TRANSACTION ACCOUNTS DEPOSIT REVENUE CUSTOMER DEPOSITS BY INTEREST RATE1 (%) ($m) 100 1,623 1,541 $285bn of deposits already 27 1,407 80 at or near zero interest rate 24 1,303 22 22 60 $137.1bn $147.8bn 1,596 1,517 40 1,385 1,281 $76.4bn 20 $15.5bn $11.9bn $3.5bn 0 Mar 20 Sep 20 Mar 21 Se
Slide 67: Other Banking Products
OTHER BANKING PRODUCTS PERSONAL LENDING BALANCE AND MARKET SHARE1 CARDS BALANCE AND MARKET SHARE2,3 ($bn) ($bn) 13.2% 13.2% 13.3% 13.4% 6.0 2.7 9.4% 9.2% 9.0% 9.2% 11.00% 11.00% 5.4 4.4 4.6 4.2 1.4 1.1 1.0 1.0 0.0 0.00% 0.0 0.00% Mar 20 Sep 20 Mar 21 Sep 21 Mar 20 Sep 20 Mar 21 Sep 21 Personal Lendi
Slide 68: Group Asset Quality
ADDITIONAL INFORMATION GROUP ASSET QUALITY
Slide 69: Group Credit Impairment Charge
GROUP CREDIT IMPAIRMENT CHARGE CREDIT IMPAIRMENT CHARGE AS % OF GLAs GFC 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% Late 80’s / Early 90’s 0.2% Recession (0.03%) -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 Sep Sep Sep 87 88
Slide 70: Group Estimated Long Run Loan Loss Rate 1985 to 2021
GROUP ESTIMATED LONG RUN LOAN LOSS RATE 1985 TO 2021 GROUP BUSINESS MIX – GLAs BY CATEGORY ESTIMATING LONG RUN LOAN LOSS RATE Personal lending 8% NAB Australian geography net write off rates as a Long run 1985 % of GLAs 1985 - 20212 average Home lending3 0.03% Home Commercial1 lending 16% 76% Person
Slide 71: Group Lending Mix
GROUP LENDING MIX GROSS LOANS AND ACCEPTANCES BY PRODUCT - $629BN GROSS LOANS AND ACCEPTANCES BY GEOGRAPHY1 Other International 3% Australia 82% Other term lending 39% New Zealand 15% Asset & lease financing 2% Overdrafts 1% Credit card GROSS LOANS AND ACCEPTANCES BY BUSINESS UNIT outstandings Housi
Slide 72: Group Provisions
GROUP PROVISIONS COLLECTIVE PROVISIONS SPECIFIC PROVISIONS ($m) ($m) 1.56% 1.50% 1,500 52.8% 1.21% 1.35% 47.6% 45.0% 5,536 40.6% 5,209 4,715 4,401 299 191 827 840 794 46 155 30.00% 337 43 $5,000.0 125 115 664 39 108 56 100 5,191 4,975 4,008 4,521 702 725 686 564 -1% $1,000.0 -100 Mar 20 Sep 20 Mar 2
Slide 73: Provisions
PROVISIONS MOVEMENT IN PROVISIONS1 ($m) 181 (405) (230) (120) 6,011 5,745 5,171 Total Provisions Total Provisions Underlying collective Forward looking Target sector Specific provision Total Provisions Sep 20 Mar 21 provision Economic forward looking Sep 21 Adjustment adjustments UNDERLYING CP ECONO
Slide 74: ECL Assessment
ECL ASSESSMENT ECL SCENARIOS & WEIGHTINGS KEY CONSIDERATIONS Total Provisions for ECL1,2 2H21 • Reduction in ECL vs Mar 21 includes $299m CP $m (probability 100% Base 100% derecognised with aviation sale3 and $120m SP reduction case Downside weighted) due to work-outs and low levels of new impairmen
Slide 75: Target Sector FLAs
TARGET SECTOR FLAS COLLECTIVE PROVISION TARGET SECTOR FLAS ($m) 1,250 662 1,029 • Aviation FLA release 458 845 includes $248m as a result 372 of the partial sale of the 662 182 aviation portfolio 155 232 133 202 147 • $95m release in Australian 81 160 Agri due to improved trading 89 95 180 condition
Slide 76: ECL Provisioning by Stages
ECL PROVISIONING BY STAGES LOANS AND ADVANCES BY STAGE1 PROVISIONS BY STAGE2 PROVISION COVERAGE BY STAGE3 ($bn) ($m) (%) 0.77 784.5 792.6 833.3 6,011 5,745 0.72 0.62 7.9 5,171 8.7 9.5 1,644 1,594 206.5 237.8 248.9 1,539 19.0 16.8 19.5 3,897 3,879 569.3 545.3 576.5 3,376 1.89 0.56 1.63 0.53 1.36 0.44
Slide 77: Probability of Default (PD) Analysis
PROBABILITY OF DEFAULT (PD) ANALYSIS NON RETAIL CORPORATE EAD1 BY PROBABILITY OF DEFAULT Investment grade Sub investment grade Default ($bn) 60% Sep 21 39% Sep 21 1% Sep 21 120 100 80 60 40 20 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 20 Sep 20 Mar 21 Sep 21 AUSTRALI
Slide 78: Non Retail Industry Sector Analysis
NON RETAIL INDUSTRY SECTOR ANALYSIS NON RETAIL EAD BY INDUSTRY1 - $584BN % Non performing2 Mar 21 Sep 21 Finance & insurance 37% 0.03% 0.02% Commercial property 13% 0.43% 0.34% Govt & public utilities 11% 0.00% 0.00% Agri, forestry & fishing 9% 0.89% 0.56% Transport & storage 5% 0.67% 0.54% Other in
Slide 79: Group Agriculture, Forestry & Fishing Exposures
GROUP AGRICULTURE, FORESTRY & FISHING EXPOSURES GROUP EAD $52.8BN SEPTEMBER 2021 KEY CONSIDERATIONS • Sector outlook continues to improve, with favourable weather New conditions, higher than predicted commodity prices and minimal Australia Zealand impact from ongoing China trade tensions 31% 69% • P
Slide 80: Group Commercial Real Estate
GROUP COMMERCIAL REAL ESTATE1 GROSS LOANS & ACCEPTANCES ASSET QUALITY New Aust Total Trend Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Sep 21 Zealand TOTAL CRE (A$bn) 53.2 7.6 60.8 Impaired loans ratio 0.22% 0.25% 0.26% 0.32% 0.30% 0.19% Increase/(decrease) from 2.0 0.1 2.1 Sep 20 (A$bn) % of geographical GL
Slide 81: Group Commercial Real Estate
GROUP COMMERCIAL REAL ESTATE1 BREAKDOWN BY TOTAL GROSS LOANS & ACCEPTANCES ($60.8BN) Geographic breakdown Borrower breakdown Sector breakdown QLD Retail 14% Residential 29% VIC WA 11% 25% 5% SA Investor 5% 90% Industrial Other Tourism 17% Australia & Leisure 4% Developer 3% 10% Other 7% New Zealand
Slide 82: Group Office, Retail, Tourism & Leisure Commercial Real Estate
GROUP OFFICE, RETAIL, TOURISM & LEISURE COMMERCIAL REAL ESTATE1 GLA PROFILE Limit utilisation ~87% KEY CONSIDERATIONS • Office, Retail and Tourism & Leisure (T&L) viewed as most $35.9bn $36.9bn impacted by COVID-19 across Group CRE portfolio 2.0 2.0 • Office faces medium term uncertainties, dependen
Slide 83: Retail Trade
RETAIL TRADE1 EXPOSURE AT DEFAULT KEY CONSIDERATIONS • Notwithstanding challenges pre COVID-19, the Retail Trade sector EAD $14.5bn EAD $14.6bn EAD $14.6bn performed relatively well during lockdowns as consumers continued spending, but impacts have been uneven across segments 2.1 2.3 3.7 3.4 6.6 • F
Slide 84: Tourism, Hospitality and Entertainment
TOURISM, HOSPITALITY AND ENTERTAINMENT1 EXPOSURE AT DEFAULT KEY CONSIDERATIONS EAD $13.5bn EAD $13.6bn • Industry outlook for Hospitality & Entertainment sectors continues to improve, reflecting growing confidence in COVID-19 tracking, controls 1.9 1.9 and immunisation levels; Tourism and Accommodat
Slide 85: Air Travel and Related Services
AIR TRAVEL AND RELATED SERVICES EXPOSURE AT DEFAULT KEY CONSIDERATIONS • ~2% of non retail EAD EAD $10.1bn EAD $8.8bn • Portfolio comprises airlines which are usually national carriers and 0.7 sovereign owned, airports, lessors and service companies 0.7 supporting the aviation industry 8.6 • Ongoing
Slide 86: Capital & Funding
ADDITIONAL INFORMATION CAPITAL & FUNDING
Slide 87: Credit Risk Weighted Assets
CREDIT RISK WEIGHTED ASSETS CREDIT RWA ($bn) Credit quality & portfolio mix -$11.3bn 12.5 (3.5) (3.1) (3.4) (4.8) 3.9 (1.8) 348.2 348.0 2 Mar 21 Volume Model and Net non-retail Other non-retail Retail Derivatives and Translation FX Sep 21 Methodology Upgrades/ Repurchase Downgrades 1 Agreements (1)
Slide 88: Group Basel III Capital Ratios
GROUP BASEL III CAPITAL RATIOS 25.54% 23.98% 22.25% 19.07% 20.05% 17.97% 17.95% 17.01% 15.80% 17.90% 18.91% 16.62% 13.20% 14.01% 13.00% 14.64% 11.47% 12.37% Sep 20 Mar 21 Sep 21 APRA Common Equity Tier 1 ratios APRA Tier 1 ratios APRA Total Capital ratios Equivalent Internationally Comparable ratios
Slide 89: Key Regulatory Changes Impacting Capital and Funding
KEY REGULATORY CHANGES IMPACTING CAPITAL AND FUNDING Change 1HCY21 2HCY21 CY22 CY23 CY24 CY25 Capital Adequacy (APS 110) Consult Finalise Implementation Measurement of Capital (APS 111) Consult Finalised Implementation Credit Risk (APS 112/113) Consult Finalise Implementation Operational Risk (APS 1
Slide 90: Funding Profile
FUNDING PROFILE GROUP STABLE FUNDING INDEX (SFI)1 101% 101% 91% 93% 93% 90% 86% 23% 22% 20% 22% 24% 23% 20% 78% 79% 66% 70% 69% 69% 70% Sep 12 Sep 14 Sep 16 Sep 18 Sep 19 Sep 20 Sep 21 Customer Funding Index Term Funding Index (1) The Group Stable Funding Index (SFI) is the sum of the Customer Fundi
Slide 91: Loss-Absorbing Capacity
LOSS-ABSORBING CAPACITY LOSS-ABSORBING CAPACITY APRA CHANGES TO MAJOR BANKS' CAPITAL STRUCTURES3 • Based on the Group’s RWA and Total Capital position as at 30 September 2021, the incremental Group Total Capital requirement Total Capital 18.91% prior to January 2024 is approximately $3.0bn Total Cap
Slide 92: Asset Funding
ASSET FUNDING FUNDED BALANCE SHEET1 SOURCE AND USE OF FUNDS ($bn) $837bn $837bn Source of funds Use of funds 21 24 Short Term Wholesale, 13% Liquid Assets2, 23% Term Funding <12 Months, 4% Other Short Other Deposits5, Term 5% 20 Assets3,1% 34 Business and Other Lending3, 32% 17 Stable Customer 1 Dep
Slide 93: Liquidity
LIQUIDITY LIQUIDITY COVERAGE RATIO (QUARTERLY AVERAGE) NET STABLE FUNDING RATIO COMPOSITION Group NSFR 123% as at 30 September 2021 136% LCR 139% LCR 136% LCR 128% LCR $580bn Wholesale $473bn 126 137 163 Funding & Other - and Liquids Non-Financial 98 Corporate Other Assets 73 Deposits 47 28 54 Other
Slide 94: Liquidity Considerations
LIQUIDITY CONSIDERATIONS INCREASED SYSTEM LIQUIDITY AUSTRALIAN CORE FUNDING GAP1 APRA • Central bank policies continue to increase system liquidity and ($bn) Methodology deposit growth. TFF has been fully drawn ($17.6bn in FY21 for NAB), 260 Change2 with NAB managing maturity concentration over FY23
Slide 95: Term Wholesale Funding Profile
TERM WHOLESALE FUNDING PROFILE HISTORIC TERM FUNDING ISSUANCE1 ($bn) 5.4 4.8 5.2 5.7 6.7 8.1 yrs yrs yrs yrs yrs yrs 36 37 33 28 29 26 3 30 32 14 18 23 21 13 10 6 5 5 5 2 2 FY16 FY17 FY18 FY19 FY20 FY21 Tenor2 Secured Senior and Sub Debt RBA Term Funding Facility RBNZ Term Funding Facilities TERM FU
Slide 96: Diversified and Flexible Term Wholesale Funding Portfolio
DIVERSIFIED AND FLEXIBLE TERM WHOLESALE FUNDING PORTFOLIO FY21 ISSUANCE BY PRODUCT TYPE1 FY21 ISSUANCE BY CURRENCY1 Subordinated Secured Public Public 45% AUD 32% Domestic 11% USD 33% Senior Public Offshore 7% NZD 5% Secured Public Senior Public Offshore 11% Domestic 26% EUR 21% GBP 9% OUTSTANDING I
Slide 97: Funding Costs
FUNDING COSTS INDICATIVE INDICATIVE TERM TERM WHOLESALE WHOLESALE FUNDING FUNDING ISSUANCE COSTS11 ISSUANCE COSTS TERM DEPOSIT PORTFOLIO COSTS2 (bps) (bps) 400 80 70 300 60 200 50 100 40 30 0 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Sep 21 20 3 yr senior 5 yr senior 10yr senior 10NC5 Tier 2 Sep 18
Slide 98: Capital & Deposit Hedges
CAPITAL & DEPOSIT HEDGES NAB REPLICATING PORTFOLIOS1 NAB – REPLICATING PORTFOLIOS1 (%) Replicating portfolio Ave return of replicating portfolio 3.0 1H21 2H21 FY21 30 Sep 21 balance Invested out to term of 2.5 0.95% 0.75% 0.85% Capital AUD $42bn 3 years 2.0 Low rate deposits AUD $63bn 5 years 1.5 BN
Slide 99: Long-Term: A Sustainable Approach
ADDITIONAL INFORMATION LONG-TERM: A SUSTAINABLE APPROACH
Slide 100: Sustainability Is Embedded in Our Group Strategy
SUSTAINABILITY IS EMBEDDED IN OUR GROUP STRATEGY COMMERCIAL RESPONSES TO RESILIENT AND SUSTAINABLE INNOVATING FOR THE SOCIETY’S BIGGEST CHALLENGES BUSINESS PRACTICES FUTURE Embedding sustainability means doing Getting the basics right and managing our Driving investment in new, emerging and good thr
Slide 101: ESG Governance & Performance
ESG GOVERNANCE & PERFORMANCE BOARD COMMITTEES: Audit Committee Customer Committee Nomination & People & Remuneration Risk & Compliance Chair: David Armstrong Chair: Ann Sherry Governance Committee Committee Committee Chair: Philip Chronican Chair: Anne Loveridge Chair: Simon McKeon Updates on ESG ri
Slide 102: ESG Reporting Frameworks and Benchmarked ESG Performance
ESG REPORTING FRAMEWORKS AND BENCHMARKED ESG PERFORMANCE REPORTING FRAMEWORKS Since 2003, NAB has prepared its sustainability reporting in alignment with the Global Reporting Initiative Since 2011, NAB has actively supported the concept of integrated reporting, and as a pilot programme member, activ
Slide 103: Our Group Climate Strategy
OUR GROUP CLIMATE STRATEGY GOAL OF ALIGNING OUR LENDING PORTFOLIO TO NET ZERO EMISSIONS BY 2050 • First Australian bank to have signed the Collective Commitment to Climate Action (CCCA) • Financed emissions estimate expanded to 8 sectors • Sector specific pathway mapping work is under way and interi
Slide 104: Climate Metrics and Targets
CLIMATE METRICS AND TARGETS ENVIRONMENTAL FINANCING1 RENEWABLES EAD AS A % OF ENERGY GENERATION2 (cumulative $bn) 31% 31% 29% 29% 42% 52% 70 56 69% 69% 71% 71% 43 58% 34 48% 23 13 7 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 2025 Target Renewables Gas, coal & mixed fuel NAB GROUP EL
Slide 105: Our Exposures to the Energy Generation and Resource Sector
OUR EXPOSURES TO THE ENERGY GENERATION AND RESOURCE SECTOR ENERGY GENERATION EAD BY FUEL SOURCE1 ($bn) 7.79 7.18 7.37 6.83 Gas 1.16 0.12 0.98 0.08 0.78 0.78 0.09 • Renewables comprise 71.4% of Coal 1.15 1.04 0.08 1.19 energy generation EAD at 0.99 September 21, increasing from 39% Mixed Fuel 1.94 1.
Slide 106: Engaging with 100 of Our Largest Emitters on Their Transition Plans
ENGAGING WITH 100 OF OUR LARGEST EMITTERS ON THEIR TRANSITION PLANS OUR TARGET To work closely with 100 of our largest greenhouse gas emitting customers to support them as they develop or improve their low carbon transition plans by 30 September 2023 OUR TRANSITION FRAMEWORK TRANSITION MATURITY OF 3
Slide 107: Set a Goal of Aligning Our Portfolio to Net Zero Emissions by 2050
SET A GOAL OF ALIGNING OUR PORTFOLIO TO NET ZERO EMISSIONS BY 2050 NAB HAS SIGNED THE COLLECTIVE COMMITMENT TO CLIMATE ACTION To meet requirements of CCCA, NAB has set a goal to align our Australian lending portfolio to net zero emissions by 2050, and publish interim sector-specific decarbonisation
Slide 108: Continuing Phased Risk Review
CONTINUING PHASED RISK REVIEW We continued our ongoing, phased review of credit risk policy settings for carbon intensive, climate sensitive and low-carbon sectors. In 2021, this included a specific review of the oil and gas sector. We will align to the International Energy Agency’s Net Zero Emissio
Slide 109: We Are a Leader in Sustainable Financing
WE ARE A LEADER IN SUSTAINABLE FINANCING GLOBAL COVERAGE MODEL WITH HIGHLY PROFESSIONAL PRODUCT INNOVATION TO SUPPORT THE TRANSITION BANKERS WORKING CLOSELY WITH CUSTOMERS • #1 Australian bank for global renewables transactions1 • We are raising the bar on • Recently completed our first ESG-linked d
Slide 110: Progressing Our Priorities – Commercial Responses to Society's Biggest Challenges
PROGRESSING OUR PRIORITIES – COMMERCIAL RESPONSES TO SOCIETY’S BIGGEST CHALLENGES AFFORDABLE AND SPECIALIST HOUSING INDIGENOUS BUSINESS Progress against $2bn financing target to support affordable and • Hosted our first Indigenous Business Roundtable, hearing specialist housing1 directly from NAB’s
Slide 111: Progressing Our Priorities – Resilient and Sustainable Business Practices
PROGRESSING OUR PRIORITIES – RESILIENT AND SUSTAINABLE BUSINESS PRACTICES NEW INCLUSION AND DIVERSITY STRATEGY RESILIENT AND SUSTAINABLE BUSINESS PRACTICES Focus areas of the new framework: no and low interest loans. Including programs for Provided • Inclusive leadership: Leaders who are visible in
Slide 112: Economics
ADDITIONAL INFORMATION ECONOMICS
Slide 113: Australia and NZ Key Economic Indicators
AUSTRALIA AND NZ KEY ECONOMIC INDICATORS AUSTRALIAN ECONOMIC INDICATORS (%)1 NZ ECONOMIC INDICATORS (%)1 CY19 CY20 CY21(f) CY22(f) CY23(f) CY19 CY20 CY21(f) CY22(f) CY23(f) GDP growth2 1.9 -0.9 1.6 4.0 2.3 GDP growth2 1.8 0.1 -1.0 7.8 1.3 Unemployment3 5.1 6.7 4.7 4.2 3.8 Unemployment3 4.0 4.8 3.3 3
Slide 114: Activity Is Expected to Bounce Back After Current Lockdowns
ACTIVITY IS EXPECTED TO BOUNCE BACK AFTER CURRENT LOCKDOWNS • Economic activity and hours worked are expected to have fallen GDP IS EXPECTED TO BOUNCE BACK1 relatively sharply in the September quarter with widespread lockdowns in NSW, VIC and the ACT as well as state border (Index) Forecasts closure
Slide 115: High Frequency Data Shows Resilience in the Face of Recent Lockdowns
HIGH FREQUENCY DATA SHOWS RESILIENCE IN THE FACE OF RECENT LOCKDOWNS CONSUMER SPENDING RESILIENT IN THE FACE OF RECENT LOCKDOWNS1 (Index) 140 Total spend 120 100 80 60 Jan 20 Mar 20 May 20 Jul 20 Sep 20 Nov 20 Jan 21 Mar 21 May 21 Jul 21 Sep 21 Nov 21 CONSUMER SPEND BY INDUSTRY2 CONSUMER SPEND BY IN
Slide 116: A Near-Term Hit to the Labour Market, but a Good Starting Point
A NEAR-TERM HIT TO THE LABOUR MARKET, BUT A GOOD STARTING POINT UNEMPLOYMENT IS LOW1 UNEMPLOYMENT IS LOW ACROSS THE STATES1 (%) (%) NSW VIC QLD SA WA TAS 20 Unemployment Rate Underutilisation Rate 9 8 15 7 10 6 5 5 4 0 3 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 Mar 20 Jun 20 Sep 20 Dec
Slide 117: The Housing Market Has Strengthened
THE HOUSING MARKET HAS STRENGTHENED HOUSE PRICE GROWTH HAS BEEN STRONG1 RENTS ARE RECOVERING2 (%) Sydney Melbourne Brisbane (%) 35 Perth Adelaide Hobart 30 10 25 20 5 15 10 0 5 0 Sydney Melbourne -5 -5 Brisbane Adelaide -10 Perth Hobart -15 -10 2013 2014 2015 2016 2017 2018 2019 2020 2021 2006 2009
Slide 118: The Business Survey Shows a Rapid Rebound as Lockdowns End
THE BUSINESS SURVEY SHOWS A RAPID REBOUND AS LOCKDOWNS END CONFIDENCE AND CONDITIONS HAVE REBOUNDED1 CONFIDENCE AND CONDITIONS BY INDUSTRY2 (Net Bal.) (Net Bal.) 50 20 40 Confidence Conditions 30 0 20 10 -20 0 -10 -40 Confidence Conditions -20 -60 -80 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 119: Low Rates to Persist in the Near-Term but Begin Normalising
LOW RATES TO PERSIST IN THE NEAR-TERM BUT BEGIN NORMALISING THE CASH RATE TO REMAIN ON HOLD UNTIL 20231 THOUGH BOND PURCHASES WILL TAPER2 (%) Cash Rate Target ($B) Overnight Cash Rate 2.0 3-year AGS 600 5-year AGS 10-year AGS 500 1.5 RBA Assets 400 1.0 300 200 0.5 100 0.0 0 Jan 19 May 19 Sep 19 Jan
Slide 120: New Zealand Economy
NEW ZEALAND ECONOMY ECONOMY HAD SOLID MOMENTUM BEFORE Q3 LOCKDOWN; STRONG DAIRY FARM VIABILITY LABOUR MARKET STRENGTH CONTINUED INTO Q31 ($NZ billion, chain prices) (%) 8.40 70 NZ GDP 6.0 Unemployment rate 7.74 5.0 66 4.0 5.85 62 3.0 58 2.0 54 1.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 121: New Zealand Housing
NEW ZEALAND HOUSING HOUSING MARKET VERY STRONG; PRICES KEEP GROWING THROUGH LOCKDOWN AS SALES VOLUMES FALL1 (Index) ('000s) House prices Dwelling sales transacted 4500 12 4000 10 3500 Auckland 3000 8 2500 6 2000 National ex Auckland 1500 4 1000 2 500 0 0 Sep 13 Sep 15 Sep 17 Sep 19 Sep 21 Sep 13 Sep
Slide 122: Other Information
OTHER INFORMATION
Slide 123: Operating Expenses – Half on Half
OPERATING EXPENSES – HALF ON HALF OPERATING EXPENSES (EX LARGE NOTABLE ITEMS)1 ($m) HoH expense up 2.4% (YoY growth 1.8%) 20 9 105 (83) 40 3,932 3,954 3,863 Sep 20 Mar 21 Productivity savings Remuneration Technology and Depreciation and Other Sep 21 and inflation investment Amortisation (1) Refers t
Slide 124: Strategic NPS Equal First but More Work to Do to Achieve Positive
STRATEGIC NPS EQUAL FIRST BUT MORE WORK TO DO TO ACHIEVE POSITIVE STRATEGIC NPS1,2 -5 -10 -15 -20 -25 -30 Jan 17 May 17 Sep 17 Jan 18 May 18 Sep 18 Jan 19 May 19 Sep 19 Jan 20 May 20 Sep 20 Jan 21 May 21 Sep 21 NAB Peer 1 Peer 2 Peer 3 BUSINESS3 CONSUMER4 -5 5 -10 0 -15 -5 -20 -10 -25 -30 -15 -35 -2
Slide 125: 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 NAB) for its internal management reporting purposes and considers it a better reflection of the Group’s underlying performance. Accordingly, information is
Slide 126: Abbreviations
ABBREVIATIONS ALA Alternative Liquid Assets KYC Know Your Customer AML Anti Money Laundering LCR Liquidity Coverage Ratio CET1 Common Equity Tier 1 Capital LGD Loss given default CIC Credit impairment charge LVR Loan to Value Ratio CLF Committed Liquidity Facility MTM Mark to market CP Collective Pr
Slide 127: Disclaimer
DISCLAIMER The material in this presentation is general background information about the NAB Group current at the date of the presentation on 9 November 2021. 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 — FY2021 Earnings Presentation on 6ix