• Increase in forward looking collective provisions of $300 million
• Discount and partial underwrite of 1H26 dividend reinvestment plan
• Changes to software capitalisation policy with $1.3 billion accelerated amortisation charge

In light of market volatility following the conflict in the Middle East, NAB has reviewed its credit provisioning and capital settings to better reflect the risks in its business. As a result, NAB has made adjustments including an increase in forward looking collective provisions of $300 million, reflecting updates to the economic forecast and increased weighting to the Australian Downside scenario, as well as new and increased sector overlays. NAB has also taken action to strengthen its capital position and balance sheet resilience, including applying a 1.5% discount to the 1H26 dividend reinvestment plan and partially underwriting it, which is expected to raise up to $1.8 billion and contribute up to 40 bps to the Group's CET1 ratio in 2H26. Additionally, NAB has made changes to its software capitalisation policy, including reducing the useful life of capitalised software assets, changing the nature of assets capitalised, and increasing the threshold for capitalisation. This will result in an accelerated amortisation charge of $1,347 million pre-tax ($949 million after tax) in 1H26, reported as a Large Notable Item. The changes to the software capitalisation policy are expected to result in higher operating expenses in 2H26 as a higher proportion of investment spend is expensed. However, NAB confirms its previously announced guidance for FY26 cash operating expense growth to be less than 4.6%.

NAB expects to report a pro forma Group CET1 ratio at 31 March 2026 of greater than 12.0% including the benefit of the discounted and partially underwritten 1H26 dividend reinvestment plan.