National Australia Bank profit misses estimates as software costs weigh on bank

Published Mon, May 4, 2026 · 07:23 AM

[MELBOURNE] National Australia Bank (NAB) missed first-half profit estimates as higher software costs and the deteriorating economy pushed up credit provisions, offsetting robust loan growth.

Cash earnings came in at A$2.6 billion (S$2.4 billion) in the six months to Mar 31, according to a statement on Monday (May 4). That fell short of the A$3 billion average forecast of analysts polled by Bloomberg.

Rising energy prices are stoking inflation in Australia, where lenders are setting aside larger buffers in expectation of a souring economic outlook. NAB CEO Andrew Irvine is prioritising growth in the key business banking division as well as focusing on driving deposit growth and strengthening proprietary home lending.

Changes to the firm’s software capitalisation policy, as previously announced last month, lowered cash earnings by A$949 million, Irvine said. Taking this into account, cash earnings were about 2.3 per cent higher than the second half of last year, the statement said.

“Geopolitical tensions have created a more volatile macro economic environment,” Irvine said. “We enter this period in good shape”, and actions taken in the first half to bolster the balance sheet will allow the firm to continue to grow and support customers, he added.

Profit at NAB’s business and private banking division rose to A$1.85 billion with lower credit impairment charges, as revenue benefited from lending volume growth. The firm’s net interest margin climbed three basis points to 1.81 per cent.

NAB will pay an interim dividend of 85 Australian cents per share.

Last week, ANZ Group Holdings’ first-half profit surpassed projections on signs of improvement with the bank’s overhaul by CEO Nuno Matos. Westpac Banking is due to report results on Tuesday. BLOOMBERG