Quick answer: National Australia Bank’s full-year profit fell 13% to $6.14 billion after it set aside $1.55 billion for loans that might not be repaid — nearly double last year’s figure. The bank is still very profitable and is not in trouble, but the result is a warning sign: with the cash rate at 4.85% and growth slowing, borrowers should expect tighter lending and no quick relief on rates. NAB expects the Reserve Bank to hold rates where they are for a while.
What happened to NAB’s profit?
NAB announced its full-year results on Thursday, 5 November 2026, for the year ended 30 September. The headline numbers:
- Cash earnings: down 13.4% to $6.14 billion.
- Statutory net profit: down 9.1% to $6.14 billion.
- Credit impairment charge: $1.55 billion, up 86% from $833 million last year.
- Dividend: a final dividend of 85 cents a share, fully franked, taking the full-year payout to $1.70 — unchanged from last year.
- Shares: fell about 5–6% on Thursday, their worst one-day drop since February 2025.
Strip out a $949 million one-off charge from a change in how the bank accounts for its software, and the picture looks steadier: cash earnings were roughly flat at $7.09 billion and underlying profit rose 6.9%. The bank still made good money. The problem is what it had to set aside for bad debts.
Why did profit fall?
One reason above all: bad-debt provisions. NAB put aside $1.55 billion to cover loans that may not be repaid, up from $833 million the year before. That is the highest impairment charge since September 2020. Bad debts ran at 0.19% of total loans, up from 0.11% — the highest in five years — and home loan arrears rose.
Chief executive Andrew Irvine said the bank had “strengthened provisioning to reflect a more challenging environment of slowing growth, declining house prices, higher interest rates and inflationary pressures.” In plain terms, more customers are struggling to keep up with repayments after five Reserve Bank rate rises this year, and the bank is preparing for more of them.
Costs also played a part. Operating expenses rose 4.5% before large items, including spending on technology upgrades. On the other side, the bank’s net interest margin — the gap between what it charges borrowers and pays savers — rose slightly to 1.80%, and revenue grew 5.8% to $22 billion.
What does it mean for your home loan?
Three things matter for mortgage holders:
1. Rates are unlikely to fall soon. The Reserve Bank lifted the cash rate to 4.85% on Tuesday, 3 November — its fifth rise this year and the highest level in 18 years. NAB’s own economists expect the Reserve Bank to keep the cash rate on hold at 4.85% “for a while”. If you are waiting for a cut to ease your repayments, this result says don’t count on one soon.
2. Getting a new loan may get harder. When a bank’s bad-debt charges jump 86%, it gets more careful about who it lends to. Expect more proof of income, closer checks on your spending, and slower approvals — especially if your deposit is small or your income is uneven. NAB said it “maintained a disciplined approach to growth” in home lending as conditions got tougher.
3. If you are already struggling, speak up early. NAB said it is watching for customers showing signs of financial stress and is already seeing more of them. Banks would rather set up a hardship arrangement than chase a default. If repayments are getting tight, calling the bank before you miss one is almost always the better move.
What does it mean for savers?
There is a small silver lining. NAB’s net interest margin rose, which means the bank is earning a bit more from the gap between lending and deposit rates. When margins rise, banks sometimes pass a little of it to savers through better term deposit and savings rates — but they are under no obligation to, and NAB has not announced any savings rate increases following this week’s rise. If your money is sitting in an everyday account earning next to nothing, it is still worth comparing term deposits and high-interest savings accounts, including from smaller banks.
What does it mean for small businesses?
NAB is the country’s biggest business lender, and business lending grew 9.8% over the year. But the bank also flagged stress in parts of its business lending book, and its economists expect growth of only about 1% next year. For a small business, that combination usually means two things: banks will look harder at your cash flow before approving or renewing a loan, and overdraft or loan limits may not grow as easily as they did a year ago. If you rely on business income to service a home loan, as many small business owners do, that is worth keeping in mind too.
What does it mean for shareholders?
The dividend is safe for now: $1.70 for the full year, unchanged and fully franked. But the market’s reaction was blunt — the share price fell about 5–6% on the day, wiping out the year’s gains and pushing the stock into negative territory for 2026. Investors were disappointed that the profit missed expectations and that bad debts rose so sharply. NAB’s economists expect unemployment to drift up to about 5.5% by early 2028, which would put more pressure on loan repayments.
Is NAB in trouble?
No. A $6.14 billion profit is still a very large profit, and the bank’s capital ratio (CET1 of 11.87%) is strong. Setting aside $1.55 billion for bad debts is a precaution, not a loss — most of those loans are still being repaid. What the result really shows is that the bank thinks the economy is getting harder: growth slowing, house prices falling, and more borrowers under strain after five rate rises. That is a warning about the economy, not about NAB itself.
What happens next?
Watch three things. First, whether arrears keep rising — the next quarterly update will show if the stress is spreading. Second, whether the Reserve Bank really does hold the cash rate at 4.85%, as NAB expects, or lifts it again if inflation stays high. Underlying inflation hit a two-year high of 3.7% in the September quarter. And third, whether other big banks report the same pattern when they release their results. If they do, tighter lending is not a NAB story — it is a banking story, and every borrower will feel it.
Frequently asked questions
How much profit did NAB make?
NAB made a statutory net profit of $6.14 billion for the year ended 30 September 2026, down 9.1% on the previous year. Cash earnings fell 13.4% to $6.14 billion.
Why did NAB’s profit fall?
Mostly because the bank set aside $1.55 billion for loans that might not be repaid, up 86% from $833 million last year, plus a $949 million one-off software accounting charge and higher technology costs.
Will NAB raise home loan rates?
Yes — NAB has announced it will pass on the Reserve Bank’s 0.25% rise in full to variable home loan customers, effective Friday 13 November 2026. Its economists expect the cash rate to stay at 4.85% for a while, so further rises are not expected soon — but neither are cuts.
Is my money safe with NAB?
Yes. NAB is one of the country’s four major banks, it made a $6.14 billion profit, and its capital levels are strong. Deposits are also protected by the government’s Financial Claims Scheme up to $250,000 per account holder per bank.
Will there be a recession?
NAB’s chief executive said the risk of a recession has risen, but it is still not the bank’s most likely outcome. Its central case is growth of around 1% and unemployment rising to about 5.5% by early 2028.
