Credit impairment charges surged by 86% to 1.55 billion Australian dollars as the lender bolstered provisions against a cooling economy. While net operating income climbed 5.8% to 22.01 billion Australian dollars, the underlying performance fell short of analyst expectations. Excluding software amortization costs, cash earnings remained flat at 7.09 billion Australian dollars, missing the projected 7.24 billion.

Chief Executive Andrew Irvine pointed to elevated uncertainty, noting that cost pressures and a cooling housing market threaten broader economic growth. The Reserve Bank of Australia’s recent move to hike the cash rate to an 18-year high of 4.85% has already begun to influence borrowing costs and dampen housing prices. NAB economists anticipate the national unemployment rate will climb from 4.7% to a peak of 5.5% by early 2028.

Despite these headwinds, the bank expanded its footprint in business lending to 21.7% and increased its share of business deposits to 21.1%. However, competition in the mortgage sector remains fierce, causing the bank’s share of household lending to slip to 14.0%. NAB maintained its final dividend at 0.85 Australian dollars per share, signaling stability even as it navigates a tightening monetary environment.