National Australia Bank Limited

Thank you for standing by and welcome to the National Australia Bank first half 2026 results presentation. Go ahead, please.

Good morning and thank you for joining us today for NAB's half year 2026 results. I'm Sally Miles, the Head of Investor Relations. I would like to acknowledge the traditional owners of the land from which I join you today, the Gadigal peoples of the Eora Nation. I'd like to pay respect to their elders past and present and to the elders of the traditional lands from which you join us. Presenting today will be Andrew Irvine, our Group CEO, and Inder Singh, our Group CFO. We're also joined in the room by members of NAB's executive team. Following the presentations, there'll be an opportunity for analysts and investors to ask questions. I'll now hand to Andrew.

Thank you, Sally, and good morning, everyone. I'd also like to welcome Inder, who is presenting his first set of results for NAB. NAB's half-year 2026 results benefited from good momentum across our business, supported by stable margins. We also benefited this half from strong, broad-based credit growth in a supportive economic environment. The outbreak of conflict in the Middle East created more volatile environment, which we do expect to continue for some time. In light of this, we have improved the strength and resilience of our balance sheet, to support our customers. Our customer-centric strategy becomes even more important in the current environment, and we continue to execute the strategy with both focus and discipline. This is helping us deliver better customer experiences, which in turn drives improved customer advocacy. To achieve our ambition to be the most customer-centric company in Australia and New Zealand, we must continue to modernize our technology to build a simple, fast and resilient bank. On this, we are making good progress with more to come. We have three business priorities which aim to deliver stronger returns over time, growing business banking, driving deposit growth and strengthening proprietary home lending. Again, we have continued to make good progress against each of these priorities and I will discuss them in more detail shortly. Looking ahead, while the near-term outlook is more challenging, we are well positioned to navigate this uncertainty with stronger balance sheet settings and good underlying momentum across our business. Cash earnings this half were impacted by changes to our software capitalization policy to reflect the rapidly changing technology environment. Excluding the impact of this large notable item, our cash earnings increased 2.3%. This was mainly driven by a 6.4% improvement in underlying profit, ex-notables, offset by higher credit impairment charges. Revenue growth of 3.1% reflects stronger markets and treasury income and volume growth. Total costs, excluding the impact of the notable item, were down slightly. Our cash return on equity excluding the impact of a large notable item this half was 11.6%. This is slightly higher than fiscal year 25. We have declared an interim dividend of 85 cents and this represents 72.5% of cash earnings excluding notable items which is in line with our target payout policy of between 65 and 75%. Disciplined execution by each of our divisions has contributed to our strong underlying performance in the half. Business and private banking has had a very strong half with a 5.4% increase in underlying profit. The business has good momentum in lending and deposits with a stable margin outcome. I'm particularly pleased with the 10.8% growth in transaction account balances, which reflects our consistent focus on deepening customer relationships. This performance is a strong demonstration of the quality of our business and private bank in a very competitive environment. Corporate and institutional banking delivered underlying profit growth of 1.7%. A disciplined approach to both lending and deposits has helped deliver a 15.2% return on equity. Business credit growth this half was 6.9%, reflecting strong system growth. together with good momentum in corporate lending and higher customer drawdowns in the month of March. Personal banking has also had a very good half, with underlying profit of 3.7%. The focus on strengthening proprietary home lending and growing deposits whilst managing margins has been a key driver, and I'll talk more about these shortly. Finally, in New Zealand, BNZ delivered flat underlying profits in what is a very challenging economic environment. Our continued focus on growing personal deposits has supported good market share growth this half. The ongoing conflict in the Middle East is challenging customers through both higher fuel costs and supply disruptions. These issues, together with inflationary pressures and higher interest rates, are likely to create real cash flow stress for some customers. While the vast majority of our customers are well positioned to manage these impacts, Some will need further support. At our heart, NAB is a relationship bank. Our relationships with customers are particularly important in these times, and our business bankers are on the front foot, contacting customers to discuss their circumstances. Support provided includes increased limits to working capital facilities and overdrafts to manage liquidity issues. We have also provided some zero interest loans to customers as part of the government's economic resilience program. Consumer sentiment has deteriorated sharply. However, overall, our retail customers enter this period with strong buzzers. Across our home loan book, offset and redraw balances have grown by 9% in the last 12 months. In addition, 80% of our customers did not reduce their home loan repayments in 2025 when cash rates fell by 50 basis points. This will help those customers absorb an increase in interest rates from here. In light of the more challenging environment and the ongoing volatility, we have taken proactive steps to increase the resilience of our balance sheet settings. The March common equity tier one capital ratio of 11.65% is modestly lower over the half, reflecting both strong volume growth and market volatility impacts. To further strengthen capital, a 1.5% discount will be applied to our first half dividend reinvestment plan, and we expect to partially underwrite the BRP participation. These actions will raise a total of approximately $1.8 billion, and increase our Group Set 1 ratio by approximately 40 basis points to a pro forma ratio of 12.05%. Forward-looking collective provisions have also been increased by $300 million to a total of $1.93 billion. This includes an increase in our economic adjustment, as well as increased overlays in sectors more likely to be impacted by fuel supply and fuel cost issues. Our total provisioning to credit risk-weight assets has increased to 1.6% and collective provisioning to credit risk-weighted assets has increased to 1.35%. Liquidity and funding metrics remain well above regulatory minimums. The duration and intensity of the current disruption to liquid fuels markets and associated impact on the economy remain highly uncertain. I'm confident the actions we've taken to improve the strength and resilience of our balance sheet will better enable us to continue to deliver the strategic priorities while supporting our customers through this more challenging period. The next slide outlines our strategy based on our ambition to be the most customer-centric company in Australia and New Zealand. To execute this strategy, we are being disciplined and consistent in our focus on doing a few things well. at both scale and at speed to power exceptional customer experiences. Our ambition to improve customer advocacy is anchored in a core belief that this will deliver deeper customer relationships together with improved retention and referrals. This in turn should lead to higher growth and sustainable returns over time. NAB Customer Voices is the foundation of our strategic focus on customers. This program, which we have been progressively rolling out over the last 18 months, enables us to more systematically measure, capture and respond to customer feedback. We continue to see the benefits, including significantly reducing the time required to open a simple business transaction account. While there is more work to do, these improvements will help support our strategic focus on growing at-call deposits. I'm very pleased to say that the progress to date has been recognised with NAB being awarded the Roy Morgan Customer Satisfaction Award for the Major Bank of the Year in 2025. To put this in context, the last time NAB won this award was in 2012. This is a tremendous achievement which recognises the efforts of all our colleagues to improve customer experiences. In addition, we now have positive NPS across all our four segments for the very first time. Our medium and large business NPS has improved by 16 points over 12 months and is ranked equal first of the major banks. Over the same period, both mass consumer and micro and small business improved by five points, with NAB now ranked equal second. Six months ago, you'll remember I highlighted the focus on improving NPS in high net worth and mass affluent. Here, too, our NPS has improved by 14 points, and our ranking has moved from fourth to third. The mass affluent segment and our premier banking strategy remains a key focus in our personal banking division, and in this segment, we are now ranked second. While we certainly have more to do, our strategic focus on customer advocacy is working and can be a key differentiator for our bank. Becoming a simpler, faster and more resilient bank is an ongoing journey and is embedded in how we run NAB. Simplifying the bank is key to our transformation. This means reducing the number of products we offer, eliminating duplication, and simplifying our processes. Since fiscal 22, we have cut the number of products we have by 27%, with an ambition to get this down by 50%. Being faster means improving the speed of delivery to customers by improving the productivity of bankers and support teams. This will increasingly be enabled through the use of AI to support routine tasks and allow colleagues to focus on higher value work and to improve products and systems. Improved resilience is also being delivered through the continued modernization of our core technology programs. The progressive migration to modern cloud-based platforms and decommissioning of legacy systems will continue to keep our customers safe and improve the availability of our services. By becoming simpler, faster, and more resilient, we aim to deliver stronger operating leverage simple real-time banking that our customers love, lower operational risk, and sustainable returns to shareholders over time. Upgrades to our bank's technology infrastructure foundations are now largely complete. This includes multi-cloud infrastructure and the build and migration to a modern data platform. The next phase is the progressive modernization of our core product and servicing platforms, and this work is now well underway. This slide highlights two of these platforms, our real-time payments platform and our transaction switch. In the first half, we completed the migration of all payments to our cloud-based real-time payments engine. A modern payments platform has been key to the development of innovative payment solutions such as Amazon Pay2. Our transaction switch processes 15 million card and acquiring transactions every day across a range of channels. A new transaction switch has now been installed in the cloud, and we have commenced building the capability to enable card processing and authorization. The migration of all credit and debit card transactions is expected to be completed in FY27. with merchant acquiring to follow. Our new Group Executive Digital, Data and AI, Pete Steele, joined us in November and Pete's deep experience is helping us prioritise where we invest in a rapidly changing technology environment. AI opportunities, including investments to date, are broadly aligned to three strategic outcomes. Growth opportunities will be supported by banker AI and customer AI solutions that will help drive and deliver more personalized services to our customers at both scale and enable our bankers to spend more time with our customers. Productivity opportunities will be supported by AI tools that can undertake routine tasks and increase the speed of delivery. We have already rolled out AI tools to over 7,000 software engineers. which has in turn helped improve our change cycle delivery time and significantly increased developer productivity. We are also providing colleagues with access to AI tools to help them build the skills they will need in the future. As this technology evolves quickly, it is important we embed the appropriate risk controls and governance frameworks to keep our customer data safe and ensure transparency of any AI decisions that are taken. NAV has three clear business priorities which will help drive stronger, sustainable returns. The first is continued growth in business banking. Our aim is to be the clear market leader in business and private banking and to pursue disciplined growth in corporate and institutional banking. The second is to continue to drive deposit growth with a focus on at-call transaction accounts. We are investing in innovative payment solutions for business and improved propositions for our target retail segments, including mass affluent and youth. And the third is to strengthen our proprietary home lending. Here we've implemented a number of initiatives to help grow the share of lending through our proprietary channels. This will help manage margins and improve returns on our home lending portfolio. I will now speak to each of these priorities in more detail. We are proud to support Australian businesses through our two business banking divisions, which combined make us the largest business lender in Australia. We have a 22% share of total business lending and a 28% share of lending to small and medium-sized businesses. Sound underlying business activity has supported strong business credit growth at a system level over the 12 months to March. As the largest business lender in Australia, we've continued to see good opportunities to grow. Total business lending GLAs across both business and private banking and corporate and institutional banking increased by 11.5% in the 12 months to March to 306 billion dollars. This is our strongest annual growth in three years and was supported by above-system lending growth in Australian business lending. Business and private banking is the clear market leader in SME banking. This is NAS's heartland and we know it well. Our relationship-led approach, increasingly enabled by digital data and analytics capabilities, continues to deliver good growth and our pipeline remains strong. A focus on digitizing our customers' simple needs and removing work from our bankers is allowing bankers to spend more time with our customers. This includes the continued deployment and development of our business lending platform with over 80% of lending applications in the first half submitted digitally. Competition in this segment has undoubtedly increased. but our scale, our deep expertise, and the quality of our bankers enables us to compete from a position of strength. In recent half, despite strong competitive intensity, we have consistently grown business lending at above system rates while maintaining a stable divisional margin. A holistic approach to retaining high-performing bankers has helped keep turnover rates low. turning to our second priority of driving deposit growth. We continue to see strong growth in transaction and at-call accounts across both our personal and business banking divisions. Over the first half, business and private banking and personal banking grew at-call deposit account balances by $14 billion, which exceeded the growth in lending balances across these divisions. In personal banking, our investment in branch transformations and increasing engagement with customers has supported a 30% increase in new transaction account openings over the last two years. In business and private banking, a continued focus on deepening customer relationships and investments to streamline account opening processes has in turn supported a 31% increase in new transaction account openings over two years. The good growth in at-call deposits across the group this half has also meant we had correspondingly less appetite for larger term deposits. This is reflected in the decline in total deposits in our corporate and institutional banking division. NAB's home lending strategy aims to serve our customers well in the channel of their choice through the delivery of a seamless customer and broker experience. A focus on strengthening our proprietary franchise has seen us grow our share of drawdowns by proprietary channels from 41.4% to 47.7% in the first half. And in the month of March, 50% of our drawdowns were through proprietary channels, a key milestone for our bank. This progress has been supported by investments to improve banker productivity, including an increase in contribution from new bankers appointed in FY25 to uplift capability. Having a strong and growing proprietary home lending business also means we can adopt a more targeted approach to broker distribution. Brokers are an important distribution channel, and we are deepening relationships with value brokers to drive growth in priority segments. the successful execution of this strategy is delivering a bus system growth with improved home lending returns. I'll now pass to Inder, who will take you through the financial results in more detail.