NAB Reports Decline in Net Profit for FY2025
National Australia Bank (NAB) reported a decline in net profit for the financial year ending September 2025. The bank’s net profit fell by 2.9% year-on-year to $4.38 billion (A$6.76 billion). This comes as the bank announced a final dividend of 85 Australian cents per share, reflecting its ongoing commitment to shareholders.
Despite the drop in net profit, NAB experienced growth in other key financial metrics. Net operating income increased by 2.9% to $13.47 billion (A$20.81 billion) during the same period. Additionally, net interest income rose by 3.8%, reaching nearly A$17.4 billion for the full year. These figures highlight the bank’s resilience in maintaining core revenue streams despite challenging market conditions.
Increased Credit Impairment Charges
One of the major concerns for NAB in FY2025 was the rise in credit impairment charges. The bank recorded a credit impairment charge of A$833 million, which is significantly higher than the A$471.38 million (A$728 million) reported in the previous year. This increase includes individual assessments of A$964 million and a release of A$84.82 million (A$131 million) from collective provisions.
The rise in impairment charges is attributed to a deterioration in the group’s business lending portfolio. NAB noted that this issue involved a “small number of customers” in both corporate & institution banking and New Zealand banking. The impact of these challenges was reflected in the ratio of non-performing exposures to gross loans and acceptances, which increased by 16 basis points (bps) to 1.55% over the year.
Capital Position and Strategic Priorities
NAB’s capital position also saw some changes during FY2025. The group common equity tier 1 (CET1) ratio dropped to 11.7%, a decrease of 65 basis points from September 2024. This decline was driven by slower lending growth, increased long-term investments in the business, and the impact of A$0.6 billion worth of shares bought back during the year.
The bank’s CEO, Andrew Irvine, emphasized that NAB is making good progress on its key priorities. In the results summary, he stated that the bank is focused on growing business banking, driving deposit growth, and strengthening proprietary home lending. These efforts are supported by targeted investments in frontline bankers and technology-enabled solutions that deliver simpler, faster, and safer outcomes for customers.
Optimistic Outlook for NAB
Irvine expressed confidence in NAB’s future performance. He highlighted that the bank has a clear strategy and is well-positioned to manage its operations for the longer term. This strategic approach, according to Irvine, will help NAB deliver sustainable growth and returns for its shareholders.
With continued focus on innovation and customer service, NAB aims to navigate the evolving financial landscape while maintaining its strong market presence. The bank’s ability to adapt and respond to challenges will be critical in ensuring long-term success and shareholder value.