• Cash earnings ex large notable items up 2.3% vs 2H25
• Underlying profit growth of 6.4% ex large notable items
• Increased forward-looking collective provisions due to Middle East conflict

NAB reported its 1H26 results, with cash earnings ex large notable items up 2.3% vs 2H25 and underlying profit growth of 6.4% ex large notable items. Revenue increased 3.1%, with growth in gross loans and advances of 2.9% and deposit growth of 2.3%. Net interest margin rose 3 basis points to 1.81%. Expenses increased 26.2%, but excluding the large notable item related to a change in software capitalisation policy, expenses decreased 0.5%. The credit impairment charge was $706 million, up from $485 million in 2H25, with the increase mainly reflecting charges for the business lending and unsecured retail portfolios. The bank increased forward-looking collective provisions by $300 million due to potential stress related to the Middle East conflict. The Group's CET1 ratio was 11.65%, with a pro forma ratio of 12.05% after the expected impact of the 1H26 dividend reinvestment plan. The economic outlook remains uncertain, with the Middle East conflict adding significant downside risks to growth and inflation forecasts for both Australia and New Zealand.

For FY26, NAB continues to target productivity benefits of greater than $450 million and expects cost growth to be less than 4.6% excluding large notable items.

The outlook remains highly uncertain due to the Middle East conflict, which presents a key source of downside risk. NAB has taken actions to bolster its balance sheet, which will allow it to continue to grow and support customers during this period of increased volatility.