The National Australia Bank Ltd (ASX: NAB) share price is in focus after reporting its FY26 third quarter update to the market.
NAB is one of the largest banks in Australia, with a significant presence in business banking.
FY26 third quarter
The ASX bank share reported that it achieved 2% revenue growth compared to the FY26 first half quarterly average. Excluding, markets and treasury income, revenue rose 3%. It was 5% revenue growth compared to the third quarter of FY25.
The revenue growth enabled the business to deliver cash earnings of $1.83 billion, which represented 2% growth compared to the FY26 first quarterly average. It was 4% growth year on year.
Statutory net profit jumped 32% compared to the FY26 first half quarterly average.
NAB reported that expenses declined by 18%. Excluding the large notable item in the first half of FY26, expenses rose by 4%, with a key driver being changes to the group’s software capitalisation policy, as well as higher technology costs, seasonally higher salary costs and investment spending. Productivity benefits have helped offset some of the cost increase.
Lending
NAB reported that its total lending volume reached $817.4 billion, representing 2% growth quarter on quarter and 6% growth year on year.
Within that lending figure, housing lending rose to $451.4 billion, which was up 1% quarter on quarter and 4% year on year. Business lending grew to $352.4 billion, which was 2% growth quarter on quarter and 9% growth year on year.
NAB reported that its underlying net interest margin (NIM) – the margin that it makes on its lending – increased by 2 basis points (0.02%) despite lending competition. Including markets and treasury, the NIM decreased 2%.
Credit impairment charges for the quarter were $299 million, which was lower than the FY26 quarterly average. The $299 million related to business lending growth, a deterioration in its loan book quality, and specific Australian unsecured and non-retail portfolios.
Outlook for the NAB share price
The bank noted that Middle East conflict impacts, higher interest rates and recent tax changes are creating challenges and uncertainties for customers.
It said that business credit growth has remained “robust at this stage”, but the Australian home lending market softened in the third quarter of FY26, with applications down 15% compared to the second quarter of FY26.
The ASX bank share said it’s well-placed to manage through this period. NAB is aiming to deliver sustainable growth and attractive shareholder returns.
As an investment, I like that NAB can give exposure to business lending more than other ASX bank shares. But, following its rise of more than 10% since June, this doesn’t seem like the best time to invest.
