National Australia Bank is the big four bank most tied to Australian business. Here’s how it makes its money, and why small and medium businesses matter so much to its profits.
National Australia Bank, known as NAB, is one of Australia’s big four banks and one of the biggest companies on the ASX.
It was formed in 1981 when the National Bank of Australasia, founded in Melbourne in 1858, merged with the Commercial Banking Company of Sydney. It is still headquartered in Melbourne, and its financial year ends on 30 September.
How NAB earns its profit
Like other banks, NAB makes most of its money from net interest income. It takes in deposits and borrows from wholesale markets, then lends that money out at higher interest rates. The difference, measured as a percentage, is called the net interest margin.
What sets NAB apart is business banking. It is the largest lender to Australian businesses, from farmers and small companies to big corporations, and business and private banking is its biggest earner. Business loans usually earn higher margins than home loans, but they can carry more risk when the economy slows.
NAB is also a major home lender, through its own branches and bankers, mortgage brokers and ubank, a digital bank it expanded after buying the startup 86 400.
It owns Bank of New Zealand, or BNZ, one of New Zealand’s largest banks, and has a corporate and institutional bank that serves large companies and governments.
A simpler bank
Over the past decade, NAB has sold businesses outside its core banking, spinning off its U.K. banks and selling its MLC wealth business. It bought Citigroup’s Australian consumer banking business in 2022.
Andrew Irvine, who previously ran its business and private bank, became chief executive in April 2025, replacing Ross McEwan.
Interest rates, bad debts and the risks
Interest rates affect NAB in two ways. They change how much it can earn on its loans and deposits, and they change how easily its customers can repay.
Because it lends so much to businesses, NAB is closely watched as a guide to the health of the economy. When it puts aside more money for loans that might go bad, it is often a sign that conditions are getting tougher.
The risks include an economic slowdown, rising unemployment, a housing downturn, competition for home loans, cyber attacks and regulation. NAB’s dividends are fully franked, which makes its shares popular with Australian investors and super funds.
Latest results, as at 9 November 2026
Full year to September 2026, reported 5 November 2026: cash earnings fell 13.4 per cent to $6.14 billion, after large one-off costs. Without those, cash earnings were flat at $7.09 billion. Revenue rose 5.8 per cent to $22 billion, and the net interest margin rose to 1.80 per cent.
Australian business lending grew 9.8 per cent. NAB more than doubled the money it set aside for bad debts, to $1.55 billion, including extra provisions for a tougher economic outlook. It paid total dividends of $1.70 a share, fully franked.
Next update: NAB gives a first-quarter trading update in February 2027, and reports its half-year results in May 2027.
