National Australia Bank (NAB) has reported a full-year statutory net profit of $6.76 billion for FY25, down 0.2 per cent from the previous year, as higher expenses and credit impairment charges offset revenue growth and stronger lending momentum.
Cash earnings remained broadly stable at $7.09 billion, while underlying profit has lifted 1.3 per cent to $10.9 billion. The bank has declared a fully franked final dividend of 85 cents per share, taking total dividends for the year to 170 cents, one cent higher than in FY24.
Chief executive Andrew Irvine said the result demonstrates steady progress through the first year of NAB’s refreshed strategy.
“NAB has delivered a 1 per cent lift in underlying profit in FY25,” Irvine said. “This reflects good momentum, particularly over the second half, as we execute the first year of our refreshed strategy while maintaining prudent balance sheet settings.”
Revenue increased 2.9 per cent year on year, driven by loan and deposit growth and stronger Markets & Treasury income while gross loans and advances rose 5.9 per cent and deposits 7.4 per cent. Excluding Markets & Treasury, revenue rose 1.4 per cent, reflecting solid underlying volume growth.
Net interest margin (NIM) has edged up by three basis points to 1.74 per cent, though excluding Treasury and liquidity effects it has declined by one basis point, reflecting higher deposit and wholesale funding costs partially offset by higher earnings on deposit and capital replicating portfolios.
Operating expenses have increased 4.6 per cent to $9.8 billion, including $130 million in payroll review and remediation costs.
Excluding these one-offs, expenses rose 3.2 per cent, driven by higher personnel and technology-related costs, partially offset by productivity benefits of $420 million and lower costs associated with the bank’s enforceable undertaking with AUSTRAC.
The credit impairment charge has increased to $833 million, up from $728 million the previous year. This included individually assessed charges of $964 million, largely related to business lending exposures, and a $131 million release from collective provisions.
According to the major banks, the pace of asset quality deterioration has slowed over the second half of FY25, supported by moderating inflation and easing interest rate pressures, with Australian mortgage arrears stable across the year.
NAB’s common equity tier 1 capital ratio stood at 11.7 per cent, down from 12.35 per cent a year earlier, reflecting lending growth, long-term investment and share buy-backs.
On a pro forma basis, the ratio improved slightly to 11.81 per cent following the sale of the bank’s remaining 20 per cent stake in MLC Life to Nippon Life Insurance Company.
Broader strategic priorities — growing business banking, driving deposit growth and strengthening proprietary home lending — have underpinned its performance, NAB said.
Deposit balances rose 7 per cent over the year, while new business and retail transaction account openings increased 16 per cent. Proprietary home-lending drawdowns grew to 41 per cent of total volumes, up from 38 per cent in FY24.
Irvine said NAB’s focus on technology and customer experience continues to pay off, with the rollout of its NAB Customer Voices advocacy program showing encouraging early results.
“We remain optimistic about the outlook,” he said. “NAB has a clear strategy and we are well placed to manage our bank for the long term and deliver sustainable growth and returns for shareholders.”
NAB’s board reaffirmed its dividend payout ratio target of 65 to 75 per cent of cash earnings and said balance sheet settings remain prudent, with deposits funding 84 per cent of total lending and collective provisions as a share of credit risk-weighted assets remaining well above pre-pandemic levels.
Looking ahead, NAB said it expects a supportive operating environment into FY26, with moderating inflation, a resilient labour market, and stable credit conditions likely to underpin further margin stability and earnings growth.
