The National Australia Bank Ltd (ASX: NAB) share price is in focus after the ASX bank share announced its FY26 half-year result.
NAB is one of the largest banks on the ASX, with a focus on providing services to business customers.
FY26 half-year result
Here are some of the highlights from the report for the six months to 31 March 2026 compared to the six months to 30 September 2025 unless stated:
- Gross loans and advances (GLA) increased by 2.9%
- Revenue excluding markets and treasury increased 1.8%
- Underlying expenses decreased by 0.5%
- Underlying (excluding notable items) cash earnings up 2.3% to $3.59 billion
- Cash earnings down 24.8% to $2.64 billion
- Statutory net profit down 18% to $2.75 billion
- Dividend per share flat at $0.85
What happened to the profit?
NAB said that its FY26 half-year expenses included a large notable expense of $1.35 billion related to the accelerated amortisation charge of its software.
Instead of spreading the cost of that software over many years, NAB decided to expense that $1.35 billion in this period, hurting the net profit more than it otherwise would have.
NAB said that its underlying profit growth was 6.4% excluding the large notable item. It benefited from the improved markets and treasury income, loan volume growth and disciplined cost management, including productivity benefits of $199 million in the first half of FY26.
Looking at the divisions’ cash earnings, business and private banking earnings grew 9.9% to $1.85 billion, personal banking earnings rose 0.3% to $700 million, corporate and institutional banking earnings declined 2.6% to $921 million and New Zealand banking increased 3.4% to $728 million.
Lending profitability
NAB reported a credit impairment charge of $706 million, compared to $485 million in the second half of FY25.
The ASX bank share said there was a $300 million increase in its forward-looking provisions reflecting “potential stress related to the Middle East conflict”.
The net interest margin (NIM) is another element of the lending profit generation. It tells us how much profit the bank is making on its lending in percentage terms (being the loan rate compared to the cost such as savings accounts).
The overall NIM grew 3 basis points (0.03%). Excluding markets & treasury, NIM rose 1 basis point (0.01%), partly helped by lower deposit costs and deposit mix benefits, offset by lending competition.
Outlook for the NAB share price
NAB said that for FY26, it’s continuing to target productivity benefits of more than $450 million and expect cost growth to be less than 4.6%.
The ASX bank said that it’s well placed to navigate a period of increased volatility and it will continue to manage the business for the long-term to deliver sustainable growth and attractive returns for shareholders.
It’s good to see that the business is delivering underlying profit growth, but its lending and revenue growth rate is quite slow. I’d be happy enough if I were a shareholder, though I think there are other ASX dividend shares that could provide better dividend income over the long-term.
