NAB profits fall to $6.1b in ‘challenging economic environment’

NAB’s full-year profit has fallen by nine per cent, as the bank blames a turbulent economic climate of high-interest rates and inflation for impacting business and consumer confidence.

The bank announced its full-year results for the 2026 financial year, saying it recorded a net profit of $6.14 billion, down from $6.75 billion the previous year.

Its cash earnings were down 13.4 per cent on the 2025 numbers, but its net interest margin, increased by six basis points to 1.8 per cent, meaning it is gaining more from its loans and investments than costs.

“Underlying profit, excluding the large notable item announced at the half, increased 6.9 per cent and revenue grew 5.8 per cent,” chief executive Andrew Irvine said in a statement released on Thursday when the results were announced.

NAB’s shares on the ASX have fallen about 7.34 pr cent since the markets opened at 10am.

In a note to shareholders, Irvine said the bank was dealing with “fierce competition, strategic disruption, and a challenging economic environment”, and said there would be difficult times for Australia’s economy to come.

NAB’s figures indicated that the credit impairment charge, an expense that a bank records when it expects a borrower will not be able to repay all or part of a loan, had risen from $833 million in 2025 to $1.54 billion this year, showing that people are now struggling to pay their loans.

Irvine said the bank had seen more customers using their business income to service their home loan in a moment where interest rates have reached an 18-year-high.

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Irvine said NAB’s actions, including axing up to 2500 jobs before September next year, was designed to meet the current challenges the economic climate is throwing up.

“The actions we have taken reflect our expectation of a more challenging year ahead,” he admitted, saying he expected to see GDP growth slow to one per cent next year.

However, he insisted the process would be done properly and considering the needs and wellbeing of the impacted staff.

“These are difficult decisions that impact our colleagues – and we are treating them with care, with dignity and with respect,” Irvine said. 

“This will better position NAB to respond to customer expectations, to rising competition and to rapid technological change, as well as to navigate a softening economy.”

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In a statement announcing the results, the bank said the downturn in the housing market and the high price of construction materials would also hamper growth.

Irvine said the bank was not predicting a recession, but admitted the chances were growing.

“I think we don't think a recession is the most likely scenario, but it's probably increased in terms of its probability of an occurrence,” he said.

“We don’t yet know how the full impact of the five base rate changes will impact customers.”