(6 November 2026 – Australia) National Australia Bank has consolidated its position as Australia’s largest business lender, reporting 9.8 per cent growth in business lending during FY2025–26, although a sharp increase in credit impairment charges highlights growing pressure on borrowers.
The bank’s full-year results for the 12 months ended September 2026 showed Business and Private Banking (B&PB) balances increased 10.5 per cent to $184 billion, while Corporate and Institutional Banking lending rose 9.0 per cent to $135 billion.
Residential mortgage balances, by comparison, increased 3.8 per cent to $436 billion.
NAB’s share of the Australian business lending market edged higher to 21.7 per cent in September 2026, from 21.6 per cent a year earlier, according to Australian Prudential Regulation Authority (APRA) data cited in the bank’s results.
The bank attributed its performance partly to operational improvements, including streamlined lending processes and simplified business transaction account openings, which have reduced turnaround times.
Chief Executive Officer Andrew Irvine said NAB’s business banking divisions continued to perform strongly despite economic uncertainty and intensifying competition.
“Our business-focused divisions are getting stronger and despite fierce competition, strategic disruption and a challenging economic environment, across business and private banking and our corporate and institutional bank, NAB is the largest business lender in Australia,” Irvine said.
Healthcare and Commercial Property Lead Sector Expansion
Healthcare recorded the strongest annual increase among the sectors highlighted by NAB, with lending balances rising 16.2 per cent to $12 billion.
Commercial real estate lending increased 11.2 per cent to $47 billion, while agricultural lending rose 7.9 per cent to $51 billion.
The security profile of NAB’s B&PB portfolio remained unchanged, with 72 per cent of loans fully secured, 21 per cent partially secured and 7 per cent unsecured at September 2026.
Credit Impairment Charges Nearly Double
Despite the expansion of its commercial loan portfolio, NAB reported credit impairment charges of $1.547 billion in FY2025–26, up from $833 million in the previous year.
Individually assessed charges accounted for $1.083 billion, primarily relating to customers within the bank’s corporate, institutional and business banking portfolios.
Collective provision charges totalled $464 million, including a $403 million increase in forward-looking provisions reflecting a more challenging economic outlook.
The remaining $61 million comprised underlying charges associated with higher lending volumes and deteriorating asset quality during the second half of the financial year.
“We have strengthened provisioning to reflect a more challenging environment of slowing growth, declining house prices, higher interest rates and inflationary pressures,” NAB said.
Australian businesses continue to face elevated financing costs, inflation and regulatory pressures, with NAB’s Business Survey identifying higher interest rates, global uncertainty and rising fuel costs as major contributors to weaker business confidence.
Australian Taxation Office debt enforcement activity and regulatory changes, including Payday Super requirements, have added to cash flow pressures for some small and medium-sized enterprises (SMEs).
Irvine acknowledged that smaller businesses were experiencing greater financial strain, particularly from rising input costs, although he said most customers remained resilient.
“Most customers have been able to absorb the changes and are showing resilience, but clearly there are pockets of challenge and we’re looking after and talking to those customers as best we can,” he said.
Business Credit Demand Remains Elevated
Despite subdued confidence, Australian businesses continue to seek finance, particularly working capital facilities.
Australian Banking Association (ABA) research found that 40 per cent of SMEs had sought bank finance, while total business credit reached a record $750 billion in April 2026, compared with $567 billion three years earlier.
Competition among traditional banks and non-bank lenders has intensified, placing further pressure on lending profitability. According to the ABA, margins on small business loans above the official cash rate have fallen to a five-year low.
NAB Shifts Mortgage Strategy Towards Direct Channels
NAB is also refining its residential mortgage strategy, placing greater emphasis on proprietary lending as competition continues to weigh on returns.
The bank’s full-year results showed proprietary channels accounted for 50 per cent of Australian home loan drawdowns in FY2025–26, up from 41 per cent in the previous year.
Irvine said NAB was prioritising lending opportunities offering stronger risk-adjusted returns while maintaining a selective presence in the mortgage broker market.
“There still is good flow in the broker market that we’re choosing to compete for, generally in lower LVR bands and at larger size tickets,” he said.
“But beyond that, we are choosing to compete more aggressively in our proprietary business because we can get better economic outcomes there, and that’s working for us.”
The bank is also developing a more targeted service proposition for selected mortgage brokers, with an emphasis on faster processing and stronger relationships with partners whose business aligns with its lending priorities.
NAB’s results underline the strength of its commercial banking franchise, but the increase in impairment charges points to a more demanding credit environment as the bank enters FY2026–27.
Maintaining asset quality, managing funding and operating costs, and protecting lending margins will remain important priorities as economic pressures continue to affect Australian businesses.