Q+A: NAB CEO on rates, risk and the AI shift in banking
episodePreviously titled “NAB CEO on rates, risk and the AI shift in banking” — renamed by the publisher on Aug 2, 2026
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Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics and more. I'm Sean Aylmer. National Australia Bank released its half-year results yesterday. The result was a tad below expectations, though the bank continued to fend off fierce competition in the all-important business lending market, and it managed to sell more home loans via its own staff rather than brokers. The net interest margin was slightly higher. The loan book remains solid to step us through the result. I welcome NAB's CEO, Andrew Irvine. Andrew, welcome back to Fair and Green. Yeah, thanks for having me on the show, Sean. Tell me, Andrew, congratulations on the result first up.
Happy with it? And what parts of the business might you just have to focus a little bit more on?
What were NAB's half-year results and how do they compare to expectations?
Look, from an underlying level, I think there's a lot to like in the result. All of our businesses are performing well and growing in excess of market, which is pleasing. Our business and private bank did particularly well growing loans. over 11% year-on-year, which is the fastest rate for us in over three years. And we've done that holding margins constant, as you alluded to. And we had good results across the rest of our businesses. Particularly pleasing, as you highlight, is the performance of our proprietary home banking business, which crossed an important threshold in the month of March, where our we originated 50% of our home loans through our own staff, which is great. In terms of potentially areas of some softness, I think we did take a provision to the P&L around potential future losses.
That's not because we needed to, but because we have so much uncertainty with where The economic environment is going. We just wanted to be prudent so that we could support our customers in the event that things do go south in the next few months.
What's interesting, it doesn't look like they've gone south yet. And ANZ late last week didn't take extra provisions. One of your other competitors has. So it's kind of something you're expecting, but it's not happening yet. When do you think it will happen?
Well, yeah, you're right to say that. If we look at our activity metrics in the business, application volumes are still very robust. Settlement volumes are great. And our pipelines in our business and private bank are above this time last year. So you kind of look at the metrics and they're all really, really good. What we then also have to look at, though, is what's happened to business confidence and consumer confidence. And in the last few weeks, those have fallen pretty markedly. And so that just gives us some cause for concern. And we just thought that... you know, taking some measures now when we could was the right thing to do to make sure that we had the capital that we needed to look after our customers if things did get tougher.
Okay, so let's take a macro outlook here, so beyond just lending volumes and things like that. What do you think is going to happen to interest rates when the Reserve Bank board, well, they're convening at the moment, when they make their announcement, what do you think is going to happen to interest rates? And secondly, economic growth? And are we heading for stagflation?
Look, our house view is that we'll probably see one more interest rate rise and that that's likely to happen tomorrow. Of course, we could be wrong there, but that's our best estimate. The reason for that is inflation is escalating and is far outside the bands that the Reserve Bank would like to see. I think the challenge for them, and I would tell you, I think they've got a devilishly difficult job ahead of them. is to, you know, kind of bring sources of demand down to match sources of supply because we had too much demand, which is what was driving inflation. But do that at the same time as we're having the full crisis, which in and of itself is also going to be taking demand out of the economy.
So this one's tricky. This one's very tricky because you don't want to go too hard that you flip the switch and cause a significant downturn in economic activity.
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