NAB’s Profit Dips 2.9% as Payroll Remediation and Regulatory Costs Persist

Financial Performance Overview

National Australia Bank (NAB) has released its full-year results for the financial year ended 30 September 2025, reporting a modest revenue increase of 1.2% to $20.872 billion. Despite this growth, net profit attributable to owners declined by 2.9% to $6.759 billion. The bank declared a final fully franked dividend of 85 cents per share, maintaining a total dividend payout of 170 cents per share for the year, reflecting a commitment to returning value to shareholders.

Strategic Progress and Customer Focus

NAB emphasized the ongoing execution of its customer-centric strategy, which focuses on growing business banking, driving deposit growth, and strengthening proprietary home lending. Business and Private Banking saw a 7.3% rise in lending balances and a 6.6% increase in deposits, while Personal Banking improved home lending balances by 5.2% and retail deposits by 9.2%. The bank also highlighted the rollout of its NAB Customer Voices program, designed to embed customer feedback into decision-making and improve advocacy scores across segments.

Technology Modernization and AI Integration

Technology remains a cornerstone of NAB’s strategy, with $1.8 billion invested in 2025 to modernize platforms and enhance digital capabilities. Key initiatives include the migration to a fully digital business lending platform, the introduction of AI-powered tools such as the Customer Brain for personalized customer engagement, and the deployment of fraud prevention technologies. These efforts have reduced legacy technology assets by 149 and improved operational resilience, with service availability averaging 99.95%.

Sustainability and Environmental Commitments

NAB has made significant strides in sustainability, achieving its $6 billion affordable housing financing goal four years ahead of schedule and setting a new $60 billion financing ambition for housing affordability by 2030. The bank’s environmental finance ambition stands at $80 billion by 2030, with $17.7 billion cumulatively financed as of September 2025. NAB’s climate strategy aligns with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and the bank continues to enhance its governance and risk management frameworks to address climate and human rights risks.

Capital and Risk Management

Maintaining a prudent balance sheet, NAB reported a Common Equity Tier 1 (CET1) capital ratio of 11.70%, slightly down from the previous year but above the Group’s target of 11.25%. The bank completed a $3 billion on-market share buy-back in March 2025 and continues to manage liquidity and funding with a stable deposit base and diversified term wholesale funding. NAB also highlighted ongoing investments in risk management, cyber security, and financial crime prevention, including the cancellation of its enforceable undertaking with AUSTRAC in July 2025.

Leadership and Governance

The year saw several executive leadership changes, including the appointment of Andrew Auerbach as Group Executive, Business and Private Banking, and Pete Steel as Group Executive, Digital, Data & Artificial Intelligence, commencing November 2025. The remuneration report detailed executive pay aligned with performance and risk management, with the Group CEO’s variable reward outcome at 92% of target. NAB’s governance frameworks continue to evolve, with a strong emphasis on culture, conduct, and accountability.

Outlook and Market Context

While global economic uncertainties and geopolitical tensions persist, NAB remains optimistic about the Australian and New Zealand economies, supported by stabilizing interest rates and improving business confidence. The bank’s strategic focus on customer advocacy, technology modernization, and sustainability positions it well to navigate future challenges and opportunities.