• Cash earnings 2% lower vs 2H24 quarterly average
• Revenue grew 3%, driven by higher Markets & Treasury income
• Expenses rose 2% due to higher personnel and financial crime costs
• CET1 ratio of 11.6%, down from 12.4% in 4Q24

National Australia Bank Ltd (NAB) has released its 2025 First Quarter Trading Update, providing an overview of the bank's performance in the December 2024 quarter. The key highlights include:Cash earnings were 2% lower compared to the 2H24 quarterly average, mainly reflecting underlying profit growth of 4% offset by higher credit impairment charges and income tax expense. Revenue grew 3%, primarily driven by higher Markets & Treasury income, while ex-Markets & Treasury revenue was broadly stable with volume growth offset by lower margins. Expenses rose 2% mainly due to higher personnel and financial crime-related costs, along with increased technology spend, partially offset by productivity benefits.The bank's CET1 ratio declined to 11.6% at the end of 1Q25, compared to 12.4% at the end of 4Q24, primarily due to the payment of the 2024 final dividend and growth in credit risk-weighted assets, partly offset by cash earnings. On a proforma basis, the CET1 ratio was also 11.6%, reflecting the impact of the remaining on-market share buyback and the sale of the Group's remaining stake in MLC Life.The economic outlook is improving, but cost of living and interest rate challenges persisted during the quarter. While most customers are proving resilient, the bank has maintained prudent balance sheet settings to support customers while keeping the bank safe. NAB's refreshed strategy is focused on becoming the most customer-centric company in Australia and New Zealand, and the bank has made good progress in the first quarter laying the foundations to execute this strategy.

NAB continues to target productivity savings in excess of $400 million in FY25 and for operating expense growth in FY25 to be lower than the 4.5% growth in FY24.

The bank remains optimistic about the outlook and is well-placed to manage its business for the long term and deliver sustainable growth and returns for shareholders.