National Australia Bank stock weighs FY26 profit drop against dividend

National Australia Bank reported weaker statutory earnings for the financial year ended September 30, 2026, while maintaining its annual dividend at the previous year's level. In its 5 November results announcement, the bank said cash earnings fell 13.4 percent to 6.141 billion Australian dollars and statutory net profit declined 9.1 percent to 6.143 billion Australian dollars.

The result reflected higher credit impairment charges and large notable items. Credit impairment charges rose to 1.547 billion Australian dollars from 833 million Australian dollars in FY25, while operating expenses increased 18.2 percent after including 1.347 billion Australian dollars of large notable items. Excluding those items, expenses rose 4.5 percent.

Underlying momentum meets higher risk costs

NAB said underlying profit excluding large notable items increased 6.9 percent and revenue grew 5.8 percent. Net interest margin improved by six basis points to 1.80 percent, while gross loans and deposits each increased 5.2 percent. The bank said lending competition partly offset the benefit from higher earnings on deposits and capital-related portfolios.

The quality of the result varied across divisions. Cash earnings excluding large notable items rose 10.7 percent in Business and Private Banking to 3.685 billion Australian dollars and increased 8.7 percent in Personal Banking to 1.362 billion Australian dollars. Corporate and Institutional Banking declined 6.1 percent to 1.740 billion Australian dollars, while New Zealand Banking fell 14.0 percent to 1.163 billion Australian dollars.

NAB said it had strengthened provisions against a more difficult economic backdrop. Forward-looking collective provisions increased by 403 million Australian dollars, and the common equity tier one ratio stood at 11.87 percent on September 30. The bank expects the ratio to reach 12.07 percent pro forma after the planned discount under its dividend reinvestment plan.

Dividend dates set the next catalyst

The board declared a fully franked final dividend of 85 Australian cents per ordinary share, taking the FY26 total to 170 cents, unchanged from FY25. Shareholders faced the ex-dividend date on November 10, with the record date scheduled for November 11 and payment on December 15, according to the results material released by National Australia Bank.

For FY27, management plans to keep investment spending close to the FY26 level of 1.8 billion Australian dollars and expects underlying cost growth of less than 3 percent. The bank is also simplifying its operating model and plans to reduce its workforce by up to 2,500 roles by September 2027. Management said the changes are intended to reduce duplication, speed decisions and direct investment toward customer priorities.

National Australia Bank stock traded at 24.39 euros on Lang & Schwarz at 09:14 CET on Tuesday, November 10. The next investor focus is the November 11 dividend record date, followed by the payment scheduled for December 15.

Australian bank stocks remain sensitive to household credit quality, interest-rate expectations and competition for deposits. See More news and analyses on National Australia Bank stock.