NAB has delivered a small drop in earnings as bad debts ticked up with some businesses defaulting on their loans.
The business-focused bank on Thursday reported $7.09 billion in cash earnings in the year to September 30, down 0.2 per cent on the year before.
Statutory net profit was down 2.9 per cent to $6.76 billion, while underlying profit rose one per cent.
NAB took a $833 million charge on debt it considers unlikely to be repaid, up 14.4 per cent from $728 million the year before.
The big-four bank said deterioration in the group’s business lending portfolio includes a small number of customers in its corporate and business banking division and its New Zealand operations.
“While single loan exposures are lumpy and they’re hard to predict, it’s not unusual to see some increases in impairments towards the end of an asset quality cycle,” chief executive Andrew Irvine told analysts.
Australian mortgage arrears were stable over the year, the bank said.
Overall, 1.55 per cent of NAB’s lending portfolio was considered “non-performing,” up from 1.39 per cent a year ago.
Conditions improved over the second half of the 2024/25 financial year as inflation moderated and interest rate pressures eased, the company said.
NAB was committed to working with its customers through their business difficulties, Mr Irvine added.
“Whilst this can take time, in our experience, this achieves the best overall result for our customers and our shareholders.”
NAB declared a final dividend of 85 cents per share, taking its dividends for the year to $1.70 per share, up from $1.69 a year ago.
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