#1HALF YEAR RESULTS 2021 Investor Presentation 6 May 2021 Ross McEwan Chief Executive Officer Gary Lennon Chief Financial Officer ©2021 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 National Australia Bank#2National Australia Bank 16 8[སྐྱ ༄ 83 ྨ ➢ ° 8 g རྞཱ 103 111 NAB 2021 HALF YEAR RESULTS INDEX This presentation is general background information about NAB. It is intended to be used by a professional analyst audience and is not intended to be relied upon as financial advice. Refer to page 116 for legal disclaimer. Financial information in this presentation is based on cash earnings, which is not a statutory financial measure. Refer to page 114 for definition of cash earnings and reconciliation to statutory net profit. Overview 1H21 Financials Additional Information Divisional Performances Technology & Operations Update Long Term: A Sustainable Approach Australian Business Lending Australian Housing Lending Other Australian Products Group Asset Quality Capital & Funding Economics Other Information#3OVERVIEW ROSS MCEWAN Group Chief Executive Officer National Australia Bank#4KEY MESSAGES 4 Financial results reflect improving economy Risks remain – strength and stability continue to be a priority - Executing our strategy with discipline and focus Building momentum, with more to do Well positioned to support a business-led recovery National Australia Bank#5SOUND FINANCIAL RESULTS METRIC 5 1H21 2H20 1H21 V 2H20 Statutory net profit ($m) 3,208 1,246 Large CONTINUING OPERATIONS (EX LARGE NOTABLE ITEMS¹) Cash earnings² ($m) 3,343 2,258 48.1% Underlying profit ($m) 4,576 4,952 (7.6%) Cash ROE Diluted Cash EPS (cents) 11.1% 7.7% 3.4% 96.9 67.3 44.0% Dividend (cents) 60 30 100% Cash payout ratio³ 59.1% 42.7% 16.4% (1) For a full breakdown of large notable items in 2H20 refer to Section 4, Note 3 of the 2021 Half Year Results Announcement. No large notable items in 1H21 (2) Refer to page 114 for definition of cash earnings and reconciliation to statutory net profit (3) Based on basic cash EPS National Australia Bank#6ECONOMY IMPROVING BUT RISKS REMAIN KEY CONSIDERATIONS . . Strong economic recovery forecast to continue in 2021 - GDP growth1 of 3.7% and unemployment¹ to reduce to 5.1% Record high business conditions driven by substantial improvement across all leading indicators² GDP BACK TO PRE-COVID LEVELS AND EXPECTED TO IMPROVE³ (%) -Current forecasts 4.0 2.0 0.0 -0.3 0.0 0.0 -2.0 -0.3 -4.1 -4.0 • • Customers generally have shown high degree of resilience However some customers continue to be impacted by COVID-19 related restrictions or changes in consumer behaviour and face a more uncertain recovery -6.0 -2H20 forecasts 2.6 1.8 0.6 0.1 -1.1 -1.1 -0.4 -2.3 -3.3 -8.0 -4.6 -7.2 -4.7 -7.3 -10.0 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 UNEMPLOYMENT TO TREND LOWER (%) Unemployment rate¹ 60 SOME SECTORS REMAIN HEAVILY IMPACTED BY COVID-19 Australian non-retail categorised assets4 27% 6.7% 73% 5.1% 4.7% 4.4% CY20 CY21F CY22F CY23F Mar 21 NAB economic forecasts for the period to December (2) NAB Business Survey March 2021 (3) Source: ABS, NAB. Percentage deviation from December 2019 level Includes: Watch, 90+ DPD and Impaired Loans Tourism, Hospitality & Entertainment Property & Business Services Retail Trade Transport & Storage (includes Aviation) National Australia Bank#7BALANCE SHEET STRENGTH REMAINS A KEY PRIORITY COMMENTS . • • • Balance sheet strength and supporting customers are key strategic priorities Expect to reset capital and dividends for more normal operating environment as greater clarity over recovery emerges Revised settings will reflect a balance between: • retaining a strong balance sheet through the cycle; supporting growth; and recognising importance of capital discipline to shareholder returns CET1 to be managed towards target range of 10.75-11.25% Bias to reducing share count to drive sustainable ROE benefits COLLECTIVE PROVISION COVERAGE (%) 1.56 1.50 1.21 0.96 Sep 19 Mar 20 Sep 20 Mar 21 ■CP/CRWAS CET1 RATIO (%) 12.75% proforma¹ 7 • Future dividends to be guided by a payout ratio range of 65-75% of cash earnings, subject to Board determination based on circumstances at the relevant 12.37 11.47 10.38 10.39 time • DRP for 1H21 dividend to be neutralised Sep 19 Mar 20 Sep 20 Mar 21 (1) Adjusted for estimated impacts from agreed sale of MLC Wealth (~35bps) and BNZ Life (~7bps) less acquisition of 86 400 (~4bps). Sale of MLC Wealth and acquisition of 86 400 expected to complete in 2H21, and sale of BNZ Life expected to complete in 1H22, in each case subject to relevant approvals. Final capital impact will be determined following completion National Australia Bank#88 WE HAVE A CLEAR STRATEGIC AMBITION WHY WE ARE HERE To serve customers well and help our communities prosper WHO WE ARE HERE FOR Colleagues Trusted professionals that are proud to be a part of NAB WHAT WE WILL BE KNOWN FOR nab bnz UBANK JBWere Customers Choose NAB because we serve them well every day Relationship-led Relationships are our strength 1. Exceptional bankers 2. Unrivalled customer value (expertise, data and analytics) 3. Truly personalised experiences Easy Simple to deal with 1. Simple products and experiences 2. Seamless everything just works 3. Fast and decisive Safe Responsible & secure business 1. Strong balance sheet 2. Leading, resilient technology and operations 3. Pre-empting risk and managing it responsibly Long-term A sustainable approach 1. Commercial responses to society's biggest challenges 2. Resilient and sustainable business practices 3. Innovating for the future WHERE WE WILL GROW Business & Private Clear market leadership HOW WE WORK Corporate & Institutional Disciplined growth Excellence for customers Personal Simple & digital Grow together Be Own it respectful BNZ Grow in Personal & SME MEASURES FOR SUCCESS Engagement NPS growth UBank New customer acquisition 吧 Cash EPS growth % ROE National Australia Bank#9SUCCESSFUL EXECUTION OF OUR STRATEGY WILL DELIVER RESULTS KEY MEASURES OF SUCCESS 6 OUR AMBITION OVER FY23-25 Colleague engagement Top quartile engagement Customer NPS1 • Strategic NPS positive and #1 of majors Cash EPS growth ROE • Focus on growing share in target segments, while managing risk and pricing disciplines Disciplined approach to costs and investment - target lower absolute costs² (relative to FY20 cost base of $7.7bn) . Target double digit Cash ROE (1) Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld (2) Excluding large notable items National Australia Bank#10CULTURAL CHANGE TO DRIVE EXECUTION THROUGH FOCUS AND CLARITY 10 KEY AREAS OF FOCUS GREAT LEADERS WHO INSPIRE MOTIVATED TO PERFORM AND GROW PROGRESS Implemented clear customer centric operating model with end to end accountability ✓ Leadership team appointments completed ✓ Distinctive Leadership Program launched for all people leaders – a single, consistent program to build leadership and strategy execution discipline across NAB ✓ Progress towards a simplified business (MLC Wealth, broker aggregation, BNZ Life transactions) ✓ Focus on fewer projects supported by differential investment ✓ Transparent reporting and measurement against targets ENGAGEMENT ✓ Quarterly employee 'Heartbeat' engagement surveys - continuing to listen and respond to colleague feedback, with more work to do to reach top quartile Engagement score¹ 75 75 77 66 TALENT TO CHANGE THE FUTURE OF BANKING ✓ Delivered Career Qualified in Banking to >2,000 colleagues – a unique program; aiming to have all colleagues trained by FY24 - ✓ Launched a program to skill a group of C&IB bankers in climate change 2019 Apr 21 Top Quartile (1) Apr 21 and Top Quartile refer to Glint 'Heartbeat' engagement scores which differ in methodology to the 2019 AON survey. The 2019 score of 66 represents a restated score of the AON survey into a Glint 'Heartbeat' score methodology National Australia Bank#11REINVIGORATING OUR LEADING BUSINESS & PRIVATE BANKING FRANCHISE BUILDING MOMENTUM IN AN IMPROVING ENVIRONMENT • Improving economic environment, strong business confidence and conditions, and elevated capacity utilisation • New leadership with heightened focus on performance disciplines • Addition of ~490 new roles in B&PB, against a target of ~550 in FY21 • Continuing to progress simplification, automation and digitisation Business and home lending pipeline¹ RBA SME Business Lending Market Share ($) March 2021 pipeline >50% higher than PcP Sep Oct Nov Dec Jan Feb Mar Business transaction account sales² # I 1H21 sales 16% higher than PcP Current period Same period last year Sep Oct Nov Dec Jan Feb Mar 26.0% 26.0% 26.3% Mar 20 Sep 20 Business lending growth - monthly change ($) (1) Pipeline refers to value of applications, approvals and acceptances. Based on unaudited management information (2) Weekly count of new Business Everyday Accounts 11 Feb 21 Oct Nov Dec Jan Feb Mar National Australia Bank#12BUILDING MOMENTUM IN PERSONAL BANKING HOME LOAN APPLICATIONS UP AND GROWTH CLOSER TO SYSTEM Applications up ~45% System growth multiple improving and market share stabilising 1H20 14.6% 14.5% 14.5% 14.4% 14.4% 14.4% 0.7 0.5 0.2 0.3 0.3 -0.6 Market share NAB HL growth x system 2H20 1H21 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 TURNAROUND TIMES IMPROVING 'Time to yes"¹ improved ~30% Mar 20 Sep 20 Mar 21 (1) Monthly median days to unconditional approval measured from time of a customer's application 12 SUPPORTED BY SIMPLE HOME LOANS • A digital home loan application tool simplifying the application experience for bankers and customers • ~60% of proprietary applications currently eligible • Continue to expand eligible customers and progressively rollout to B&PB and Broker in 2H21 'Time to Yes' for applications through Simple Home Loans ~50% In <1 day National Australia Bank#13EXECUTING WELL IN C&IB, BNZ & UBANK • • • C&IB Disciplined growth Highly professional relationship managers and specialists GLAS 3%¹ up on HoH including 7%¹ lift in lending to target growth sectors (Infrastructure2, Investor, Securitisation) #1 provider of renewable energy finance in Australia³ Accelerating distribution activity with 2H21 pipeline >20% up on PcP including underwriting and arranging transactions BNZ Growth in personal and SME Growth in home lending 1.2x system growth in housing lending in 1H21 Business lending tilt away from lower returning segments Returns focus ($) 1H21 movement in business lending 1.99% 1.95% 1.90% 1.91% 127.6 137.8 129.9 125.7 Sep 19 Mar 20 Sep 20 Mar 21 Spot RWA ($bn) SME Agri Corporate IB Ex Markets pre provision profit % of RWA Property Finance (1) Growth rates excluding FX (2) Infrastructure includes Renewables • UBANK New customer acquisition Announced acquisition of 86 400 in Jan 21 received ACCC and APRA - approval4 U BANK 86400 UBANK ✓ Consistent with NAB's long-term strategy and growth plans to develop a leading digital bank ✓ Combines UBank's established customer base and brand with 86 400's technology and innovation capability NAB balance sheet strength and investment to support accelerated growth and continued innovation 13 (3) Bloomberg NEF Country Profile for Australia - Top Renewable Energy Players (2004 to 31 March 2021) (4) Acquisition of 86 400 expected to complete in 2H21, subject to obtaining approval of the scheme by the Federal Court National Australia Bank#14TECHNOLOGY INVESTMENT UNDERPINS REVENUE AND COST TARGETS SUPPORTING PRODUCTIVITY, COST REDUCTION AND REVENUE GROWTH >>> Faster speed to market Insourcing key technology functions Leveraging Data & Analytics NPS1 uplift for platforms on cloud Customer & colleague digital tools Deep investment in cloud and data skills Leveraging the Cloud Building on strong technology foundations Improved Resilience² 139 45% 33% 38% 18 132 19% 16 7 2 Sep 19 Mar 20 Sep 20 Mar 21 Mar 17 Mar 21 Reduced fraud losses 21% reduction in fraud losses impacting NAB and customers³ ■Total apps running on cloud ■Critical incidents High incidents (1) Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld (2) Critical Incidents - Significant impact or outages to customer facing service or payment channels. High Incidents - Functionality impact to customer facing service or impact/outage to internal systems. Numbers include BNZ incidents (3) 1H21 vs 2H20 14 National Australia Bank#15CUSTOMER EXPERIENCE LEADING PEERS BUT MORE WORK TO DO STRATEGIC NPS1,2 15 -5 -10 -7 -15 -10 -14 -16 -20 -25 -30 Nov 16 Mar 17 Jul 17 Nov 17 Mar 18 Jul 18 Nov 18 Mar 19 Jul 19 Nov 19 Mar 20 Jul 20 Nov 20 Mar 21 NAB Peer 1 -Peer 2 Peer 3 BUSINESS³ CONSUMER4 -5 5 -10 -11 0 -14 -15 -5 -18 -20 -21 -10 -25 -3 -5 -10 -10 -15 -30 -35 -20 -40 -25 Nov Mar 16 17 Jul Nov Mar 17 17 Jul Nov Mar 18 18 18 19 Jul 19 Nov Mar Jul Nov Mar Nov Mar 19 20 20 20 21 16 17 Jul 17 Nov Mar Jul Nov Mar Jul Nov Mar 17 18 18 18 19 19 19 20 20 Jul Nov 20 Mar 21 NAB Peer 1 Peer 2 Peer 3 ⚫NAB Peer 1 Peer 2 -Peer 3 Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld Strategic NPS: Sourced from DBM Atlas, measured on 6 month rolling average. The overall Strategic NPS result combines the Consumer and Business segment results using a 50% weighting for each. Net Promoter Score (NPS) is based on all customers' likelihood to recommend on a scale of 0 to 10 (extremely unlikely to extremely likely) March 2021. Source: DBM Atlas - Business. All Business customers, six month rolling averages ངས ºོ¢ (1) (2) (3) (4) March 2021. Source: DBM Atlas - Consumer. All Consumer customers, Australian population aged 18+, six month rolling averages National Australia Bank#161H21 FINANCIALS GARY LENNON Group Chief Financial Officer National Australia Bank#17GROUP AND DIVISIONAL PERFORMANCES GROUP EARNINGS ($m) 1,246 Large 3,208 Statutory profit UNDERLYING DIVISIONAL PROFIT3 ($m) 1.2% 1,793 48.1% 4,952 3,343 2,258 (7.6%) 4,576 2 Cash earnings¹ (ex large notable items)² Underlying profit (ex large notable items) ■2H20 ■1H21 1,815 (0.8%) (16.2%) 1,142 1,133 1,190 997 765 9.2% 835 Business & Private Banking Personal Banking Corporate & Institutional Banking New Zealand Banking ■2H20 ■1H21 (1) Refer to page 114 for definition of cash earnings and reconciliation to statutory profit (2) Refers to large notable items in 2H20. No notable items in 1H21 (3) Results in local currency 17 National Australia Bank#18REMEDIATION WORK PROGRESSING CUSTOMER-RELATED REMEDIATION PROVISION CHARGES¹ ($m) 525 832 66 PAYROLL REMEDIATION • Extensive review into payments to both current and former Australian colleagues · 314 46 766 266 0 188 • 479 94 41 91 314 172 19 97 22 2H18 1H19 2H19 1H20 2H20 1H21 Banking ■Wealth-related CUSTOMER-RELATED REMEDIATION PROVISIONING AND UTILISATION Range of potential payroll under and over payment issues; remediating under payments dating back to 1 October 2012 $40m has been paid • Additional 1H21 provision charge of $51m before tax ($36m after tax) including $25m before tax ($18m after tax) in Discontinued Operations 18 ($m) 1,599 Costs to do 400 Customer payments 1,199 987 Provision at 31 Mar 2021 Payments since June 2018 >1,300 colleagues dedicated to remediation activities across NAB and MLC Wealth • More than one million payments made to customers since June 2018 at a total value of $987m - up 38% from FY20 Commenced accelerated payments to customers for advice partnership fee for no service program (1) Charges are post-tax and include amounts taken through discontinued operations. As part of the sale of MLC Wealth to IOOF Holdings Ltd (IOOF), NAB has agreed to retain all customer-related remediation liabilities associated with the conduct of the Wealth Advice business pre-completion National Australia Bank#19REVENUE STABLE EX MARKETS & TREASURY NET OPERATING INCOME (EX LARGE NOTABLE ITEMS) ($m) HoH revenue decline 5.0% (Flat on PCP) 19 8,435 8,884 66 (125) 81 (442) (25) Mar 20 Sep 20 Volumes Margin Largely driven by non-repeat of mark-to-market gains on the high quality liquids portfolio in 2H20 Fees & Commissions 8,439 Markets & Treasury Income Other Mar 21 National Australia Bank#20MARKETS & TREASURY INCOME LOWER GROUP MARKETS & TREASURY INCOME ($m) 940 1,250 838 808 578 888 572 453 392 277 372 (4) 402 (17) 387 (86) Mar 20 362 0 345 71 Sep 20 Mar 21 3 Mar 19 Sep 19 ■Derivative Valuation Adjustment¹ ■ Customer Risk Management ² ■NAB Risk Management ³ GROUP MARKETS & TREASURY INCOME ($m) 1,817 1,933 1,738 1,778 1,828 808 FY16 FY17 FY18 FY19 FY20 1H21 (1) Derivative valuation adjustments include credit valuation adjustments and funding valuation adjustments (2) Customer risk management comprises NII and OOI (3) NAB risk management comprises NII and OOI and is defined as management of interest rate risk in the banking book (IRRBB), wholesale funding and liquidity requirements and trading market risk to support the Group's franchises 20 20 National Australia Bank#21NET INTEREST MARGIN BENEFITING FROM LOWER FUNDING COSTS NET INTEREST MARGIN (EX LARGE NOTABLE ITEMS) 21 1.79% 1.78% 0.02% 0.00% 0.02% (0.03%) 1.79% (0.02%) (0.03%) 1.74% Mar 20 Sep 20 Lending Margin Funding Costs Deposits Capital & Other Mar 21 Ex Markets & Treasury Higher Liquids Other Markets & Treasury Mar 21 KEY CONSIDERATIONS 2H21 NIM drag from low rate environment expected to be ~3bps1 but impact to moderate into FY22 CHANGING DEPOSIT MIX $274bn at or near 0% rate² ($bn) 468 476 447 425 59 72 80 54 Competitive pressures and housing lending product mix expected to remain as headwinds, along with higher liquids Lower funding costs and deposit mix expected to remain a modest tailwind in 2H21 211 236 261 280 160 $98bn replicating portfolio comprises $41bn of capital (2 year avg investment term) and $57bn of deposits (5 year avg investment term) (1) Estimated impact of previously announced RBA and RBNZ cash rate cuts on Group NIM, including the deposits impact, lower expected replicating portfolio benefits, and impact of announced repricing. Excludes the impact of any future cash rate movements. 2H21 impact consistent with expected FY21 impact of ~6bps (2) Includes $235bn in Australian customer deposits at or near 0% rate and NZ$42.5bn in New Zealand deposits at or near 0% rate Sep 19 152 Mar 20 135 Sep 20 116 Mar 21 ■Term Deposits ■Deposits Not Bearing Interest ■ On Demand and Savings Deposits National Australia Bank#22LOWER OPERATING EXPENSES AND INVESTMENT SPEND OPERATING EXPENSES (EX LARGE NOTABLE ITEMS) ($m) HoH expense decline 1.8% (PcP growth 3.1%) 22 3,747 3,932 (181) 15 42 238 (41) (141) Insourcing benefits FTE productivity • Higher performance-based compensation Growth & COVID-19 support hires 3,863 Mar 20 Sep 20 Productivity savings Remuneration and inflation Technology and Depreciation and investment Amortisation Restructuring related costs Other Mar 21 INVESTMENT SPEND ($m) COMMENTS HoH expense decline compared to PcP increase primarily reflects non-repeat of restructuring related costs in 2H20 Investment spend expected to increase in 2H21 to ~$700-750m. Relative to FY20, the mix of spend is shifting from Infrastructure and Compliance & Risk towards Customer Experience Re-affirming 0-2% cost growth guidance for FY21 61% Opex 696 655 137 510 107 248 270 156 177 311 278 177 Mar 20 Sep 20 Mar 21 • ■Infrastructure ■Compliance and risk ■Customer experience National Australia Bank#23CREDIT IMPAIRMENT WRITEBACK, PROVISIONS MODESTLY LOWER CREDIT IMPAIRMENT CHARGE (CIC) 0.54% ($m) 0.38% 0.15% 0.16% 1,601 (0.04%) 1,161 661 449 470 807 367 33 27 (128) 21 573 416 443 333 221 (114) (235) Mar 20 Sep 20 Mar 21 Underlying CIC/(writeback)¹ EA top-up (COVID-19) COLLECTIVE PROVISION BALANCES Target sector FLAS² CIC as a % of GLAS³ 3 Mar 19 Sep 19 KEY CONSIDERATIONS 1H21 • Underlying CIC writeback of $114m, including a low level of individual impairments and improved delinquencies for the unsecured retail portfolio Release of Economic Adjustment (EA) of $235m reflecting improved economic outlook Net increase in target sector forward looking adjustments (FLAs) of $221m mostly reflecting aviation and mortgages COLLECTIVE PROVISION COVERAGE ($m) 5,536 5,209 4,401 1,468 3,360 807 1,233 641 662 1,029 0.96% 1,250 0.56% 2,719 2,932 3,039 2,726 Sep 19 Mar 20 Sep 20 Mar 21 ■Collective Provision EA top-up (COVID-19) ■ Collective Provision FLAS Sep 19 ■Underlying Collective Provision (1) Represents total credit impairment charge less EA top-up and FLAs increase (2) Represents collective provision FLAs for targeted sectors (3) Half year annualised 23 23 1.21% 0.72% Mar 20 1.56% 1.50% 0.93% Sep 20 0.87% Mar 21 ■ Collective Provisions as % of Credit Risk Weighted Assets Collective Provisions as % of GLAs National Australia Bank#24ASSET QUALITY KEY CONSIDERATIONS • • • 90+ DPD & GIA ratio uplift mainly due to missed payments for a portion of the cohort of Australian home loan customers exiting deferrals Modest reduction in Watch loans post Sep 20 mainly reflects reassessment of deferral customers previously classified as Watch and FX impacts New impaired assets lower due to a lower level of single larger name impairments during 1H21 90+ DPD, GIAS & WATCH LOANS AS A % OF GLAS¹,2 NEW IMPAIRED ASSETS ($m) 807 Small number of well-secured NZ dairy exposures 276 553 539 536 531 271 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Re-gradings of performing customers 2.58% 2.30% 1.20% 1.11% 1.03% 1.03% 0.71% Sep 18 0.79% Mar 19 0.93% 0.97% Sep 19 Mar 20 1.03% Sep 20 1.23% Mar 21 90+ DPD & GIAs as a % of GLAS ■Watch loans as a % of GLAS (1) Referral to Watch generally triggered by banker annual reviews through the year or as a result of performing customers experiencing cashflow pressures (2) Eligible deferral customers treated in accordance with APRA guidance, with arrears profile frozen for period of deferral (up to 31 March 2021) 24 24 National Australia Bank#25PROVISIONS MOVEMENT IN PROVISIONS¹ ($m) 4,835 (202) (235) 6,011 Total Provisions Mar 20 Total Provisions Underlying collective Forward looking Sep 20 provision Economic Adjustment 221 (50) 5,745 Target sector forward looking adjustments Specific provision Total Provisions Mar 21 UNDERLYING CP Model outcomes based on point-in- time data . Forms baseline 1H21 release reflects improved environment and customer positions (1) Excludes provisions on fair value loans and derivatives • • . ECONOMIC ADJUSTMENT (EA) Forward view of additional stress across portfolio from base- line, according to 3 probability weighted scenarios (upside, base case & downside) Scenarios based on forward looking macro economic data and granular PD and LGD assumptions EA top-up required where probability weighted EA higher over the period (and vice versa) 1H21 EA release of $235m reflects improved economic outlook partly offset by changes to scenario weightings including reduced upside weighting (15% to 5%) given some upside now captured in base case² (2) Base case weighting now 65% (from 60% at FY20) and Downside weighting now 30% (from 25% at FY20) • TARGET SECTOR FLAS Considers forward looking stress incremental to EA changes $221m increase mostly reflects additional stress in aviation & mortgage exposures 25 25 National Australia Bank#26COVID-19 NON-RETAIL SECTORS OF INTEREST DETERIORATING KEY CONSIDERATIONS • Continued close monitoring of exposures to sectors significantly impacted by COVID-19 Sectors of interest have experienced asset quality deterioration, against improved asset quality for the total non-retail book EAD broadly stable vs 2H20 Additional FLAs vs 2H20 reflect incremental forward looking stress beyond that captured for total portfolio in EA top-up based on granular, bottom-up analysis SECTORS OF INTEREST VS TOTAL NON-RETAIL BOOK 90+ DPD & GIA % of EAD Retail Trade SECTORS OF INTEREST - KEY METRICS SUMMARY EAD $bn % of 90+ DPD and GIA to EAD Sep 20 Mar 21 Sep 20 Mar 21 14.5 14.5 1.58 1.71 14.1 13.5 1.07 1.23 Air travel and related services 11.3 10.1 0.43 0.77 Office, retail tourism and leisure CRE² 41.9 41.6 0.22 0.21 Total non-retail sectors of interest 81.8 79.7 0.64 0.72 Tourism, Hospitality & Entertainment¹ SECTORS OF INTEREST FLAS % OF TOTAL NON-RETAIL FLAS³ 0.72% 0.64% 0.57% 52% 0.44% 0.45% 0.40% 88% 89% Sectors of interest ■ Mar 20 ■Sep 20 Total non-retail book ■Mar 21 ■ Mar 20 ■Sep 20 ■ Mar 21 (2) (3) (1) Tourism, hospitality and entertainment include regulatory industry classification of accommodation and hospitality, plus cultural and recreational services CRE EAD figures are limits based on ARF230 and the FLAS relate to the whole CRE portfolio with Office, Retail, Tourism and Leisure CRE most impacted by COVID-19 stress Refer page 79 for a breakdown of target sector FLAS 26 National Australia Bank#27SOME DEFERRAL CUSTOMERS EXPERIENCING STRESS HOME LOAN CUSTOMERS EXITED DEFERRALS¹ ~$4.9bn (~10% of total deferral balances) of exited deferral customers are behind on repayments and being managed on a case-by- case basis in NAB Assist Of the $4.9bn balances, $2.4bn are 90+ DPD, including over representation from Victoria and IO conversions SME BUSINESS LOAN CUSTOMERS EXITED DEFERRALS² • ~$2bn (~9% of deferral EAD) of exited deferral customers being managed by SBS3, of which $0.2bn are 90+ DPD Relatively low level of 90+ DPD reflects customers' strong cash buffers, including as a result of our continuing support to customers and government stimulus Key industries being managed by SBS include Accommodation & Hospitality, Transport & Storage and Property & Business Services Dynamic LVR profile of ~$4.9bn past due balances Category $m Watch loan 90.01% 100% DLVR, no LMI ~60 In Default >100% DLVR, no LMI ~55 - of which 90+ DPD (1) All data as at 19 April 2021 (2) All data as at 31 March 2021 (3) Strategic Business Services team (SBS) assists our non-retail customers in financial difficulty and seeks to minimise the risk of loss to the bank 27 27 SBS business deferrals ~$2bn ~1.1 ~0.9 ~0.2 National Australia Bank#28STRONG CAPITAL POSITION GROUP BASEL III COMMON EQUITY TIER 1 CAPITAL RATIO (%) Capital generation +72bps 11.47 0.78 (+69bps ex DRP) (0.20) 0.14 0.12 0.06 12.75 12.37 1 Sep 20 Cash earnings Dividend (net DRP) RWA Rates and FX MTM Other Mar 21 CET1 CONSIDERATIONS GROUP RWA ($bn) • Strong organic capital generation over the period, with • low CICs, asset quality impacts and asset growth Completion of MLC Wealth sale³ estimated to add (5.8) (1.4) (0.0) (0.3) Mar 21 pro forma² 2 ~35bps CET1, expected to complete in 2H21 subject to timing of regulatory approvals 425.1 417.6 • If current economic conditions continue, material credit risk migration is not expected • Level 1 CET1 ratio of 12.40% • DRP for 1H21 dividend to be neutralised Sep 20 Credit Risk Operational Market Risk Risk IRRBB Mar 21 (1) Excludes FX translation (2) (3) Adjusted for estimated impacts from agreed sale of MLC Wealth (~35bps) and BNZ Life (~7bps) less acquisition of 86 400 (~4bps). Sale of MLC Wealth and acquisition of 86 400 expected to complete in 2H21, and sale of BNZ Life expected to complete in 1H22, in each case subject to relevant approvals. Final capital impact of each transaction will be determined following completion. ASX announcement on 31 August 2020; the purchase price of $1,440m comprises $1,240m in cash proceeds from IOOF and $200m in the form of a 5-year structured subordinated note in IOOF National Australia 28 Bank#29FUNDING & LIQUIDITY KEY MESSAGES TERM FUNDING FACILITY ● Funding and liquidity position remains strong with significant surpluses above regulatory minimums | Current TFF available 3 May 2021 $14.5bn Additional Allowance: $4.9bn 2 • • . System liquidity remains high due to continued deposit inflows, central bank and government stimulus measures Strong liquidity position has allowed for a reduction in the RBA's Committed Liquidity Facility (CLF) from $55.1bn to $31.0bn Term Funding Facility (TFF) capacity of $14.5bn is available to be drawn up to 30 June 2021 LIQUIDITY REMAINS ABOVE REGULATORY MINIMUMS Supplementary Allowance: $9.6bn Initial Allowance $14.3bn drawn LIQUID ASSETS4 Actual 2H21 Term Funding Maturities: $13.1bn³ Actual 1H21 Term Funding Maturities: $11.2bn³ 136 139 136 126 127 113 116 122 100% minimum ($bn) 252 234 204 180 82 64 50 50 34 34 43 46 136 136 111 84 Sep 19 Mar 20 Sep 20 ■LCR (%)¹ Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 ■NSFR (%) Average LCR for the quarter Sep 19 Mar 20 ■ Bank, Corporates & Other The Additional Allowance allocation remains static from 1 June 2021. The Additional and Supplementary Allowances are available to be drawn down until 30 June 2021 Excludes BNZ, hybrids and RMBS maturities (1) (2) (3) (4) Spot Liquid Assets as at end of each period 29 29 Sep 20 Mar 21 ■Internal RMBS (post haircuts) ■ Government, Cash & Central Bank National Australia Bank#30OUTLOOK ROSS MCEWAN Group Chief Executive Officer National Australia Bank#3131 OUTLOOK Defined and clear strategy, making progress with more to do Focus and discipline key to execution Optimistic about the outlook for Australia and New Zealand Well positioned to grow with customers National Australia Bank#32ADDITIONAL INFORMATION DIVISIONAL PERFORMANCES NAB At A Glance We Have Clear Growth Opportunities Divisional Contributions Business & Private Banking Personal Banking Corporate & Institutional Banking New Zealand Banking National Australia Bank 33 34 35 36 39 42 44 32#33NAB AT A GLANCE >31,000 Employees CASH EARNINGS DIVISIONAL SPLIT¹ Division Business & Private Banking Personal Banking Corporate & Institutional Banking New Zealand Banking Corporate Functions & Other Cash Earnings GROSS LOANS & ACCEPTANCES SPLIT Unsecured Lending 1% Business Loans 41% ~8 million Customers 814 Branches/Business centres >160 years in operation % of Cash Earnings 36% 26% 24% Key Financial Data Cash Earnings¹ Cash ROE Gross Loans & Acceptances Non-performing loans to GLAS² 17% (3%) CET1 (APRA) 100% NSFR (APRA) Australian Market Share Mortgages Business lending³ 58% Housing lending³ Personal lending4 Cards³ Credit Ratings NAB Ltd LT/ST =@ST (1) Refer to page 114 for definition of cash earnings and reconciliation to statutory net profit (2) 90+ days past due and gross impaired assets to gross loans and acceptances (3) APRA Monthly Authorised Deposit-taking Institution statistics (4) Personal loans business tracker reports provided by RFI, represents share of RFI defined peer group data 33 1H21 $3,343m 11.1% $599bn 123 bps 12.37% 122% As at March 21 21.6% 14.4% 8.9% 13.3% S&P AA-/A-1+ (Negative) Moody's Aa3/P-1 (Stable) Fitch A+/F1 (Stable) National Australia Bank#34WE HAVE CLEAR GROWTH OPPORTUNITIES CORPORATE & BUSINESS & PRIVATE BANKING PERSONAL BANKING INSTITUTIONAL BNZ UBANK Clear market leadership • Industry-leading relationship • . . . bankers, enabled by data and analytics 550 new customer facing roles Strengthen sector specialisation Transform business lending experience Leverage High Net Worth proposition Partner to deliver differentiated transactional banking experiences • • • Simple & digital Flexible and professional bankers able to serve customers whenever, wherever and through any channel they choose Deliver a simple and digital everyday banking experience, including unsecured lending Deliver Australia's simplest home loan 34 BANKING Disciplined growth • Highly professional • · Grow in personal & SME New customer acquisition relationship managers and specialists Leadership in infrastructure, investors, and sustainability Enhanced transactional banking and asset distribution capability • Step change in digital banking capability • New propositions driving customer acquisition • Simpler, more focused bank • Market leading digital experience Re-weight to less capital intense segments • Ambition to expand share in younger segments National Australia Bank#35DIVISIONAL CONTRIBUTIONS 35 Division Cash Earnings Underlying Profit 1H21 ($m) 1H21 v 2H20 1H21 ($m) 1H21 v 2H20 Business and Private Banking 1,216 9.0% 1,815 1.2% Personal Banking 859 24.7% 1,133 (0.8%) Corporate and Institutional Banking 782 5.7% 997 (16.2%) New Zealand Banking¹ (1) In local currency 616 30.0% 835 9.2% National Australia Bank#36BUSINESS & PRIVATE BANKING CASH EARNINGS AND REVENUE ($m) 36 -10.3% (9.0% HOH) -5.2% (-0.1% HOH) NET INTEREST MARGIN 3,222 3,056 3,054 2.92% 2.90% 2.81% 2.83% 1,356 1,116 1,216 Mar 20 Sep 20 Mar 21 Mar 20 Sep 20 ■Total revenue Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 ■Cash earnings BUSINESS AND HOUSING LENDING GLAS ($bn) 0.7% (0.5% HOH) -1.5% (0.7% HOH) CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS ($m) 0.22% 0.20% 0.13% 0.07% 109.9 109.1 109.4 86.1 84.2 84.8 217 Mar 20 Sep 20 ■Business lending Mar 21 Sep 19 Mar 20 Sep 20 Housing lending Mar 21 126 Mar 20 196 Sep 20 70 Mar 21 Credit impairment charge Credit impairment as a % of GLAS (half year annualised) National Australia Bank#37BUSINESS LENDING GROWTH & MARKET SHARE AUSTRALIAN SME BUSINESS LENDING GROWTH (YOY)¹ 8.4% Agri $31bn (5.9%) (2.9%) (0.7%) 0.7% BUSINESS & PRIVATE BANKING (0.7%) 3 Health CRE² 2 Other NAB B&PB System (RBA) $8bn $28bn $43bn $110bn Denotes lending balance as at 31 March 2021 SME AND AGRI BUSINESS LENDING MARKET SHARE 31.2% 31.2% 30.5% 26.0% 26.0% 26.3% Mar 20 Sep 20 Feb 21 ■SME market share (RBA) Mar 20 Sep 20 ■Agri market share (RBA) Feb 21 (1) Growth rates are on a customer segment basis and not industry (2) (3) CRE primarily represents commercial real estate investment lending across a range of asset classes including Retail, Office, Industrial, Tourism and Leisure, and Residential RBA published Small and Medium banking market share (D14.1) as at Feb 21 37 National Australia Bank#38QUICKBIZ FOR SMALL BUSINESS CUSTOMERS DIGITAL SMALL BUSINESS UNSECURED LENDING • • KEY CONSIDERATIONS Access to unsecured finance for term loan, overdraft, business cards, equipment loan and broker assisted customers • • • Application and decisioning in as little as 20 minutes Unsecured term loan lending limit up to $250k for existing customers Eligible customers can apply for unsecured term loan and overdrafts directly through Internet Banking, with pre-population of existing customer information reducing number of clicks by 100+ QUICKBIZ APPLICATION GROWTH BUSINESS & PRIVATE BANKING Applications growth in 2H20 and 1H21 has been impacted by: challenging COVID-19 environment . from April 2020, active marketing of regular Quickbiz offers ceased in favour of the NAB Business Support Loan offered via the Quickbiz platform 38 # Applications 6,612 Sep 19 6,791 Mar 20 (1) NAB Business Support Loan is provided as part of the Australian Government's Coronavirus SME Guarantee Scheme 4,923 4,467 Sep 20 Mar 21 National Australia Bank#39PERSONAL BANKING CASH EARNINGS AND REVENUE ($m) 39 14.1% (24.7% HOH) 753 859 689 Mar 20 Sep 20 Cash earnings NET INTEREST MARGIN -3.0% (-0.2% HOH) 2,298 2.06% 2.05% 2,233 2,229 2.02% 1.96% Mar 21 Mar 20 Sep 20 ■Total revenue Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 HOUSING LENDING GLAS ($bn) 208.5 208.1 206.7 206.8 CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS ($m) 0.13% 0.10% 0.14% (0.09%) 141 147 109 Sep 19 Sep 19 Mar 20 Sep 20 Mar 21 Mar 20 (93) Sep 20 Mar 21 Credit impairment charge/(writeback) Credit impairment as a % of GLAS (half year annualised) National Australia Bank#40INCREASING USE OF DIGITAL TOOLS VIRTUAL ASSISTANT 73% Virtual Assistant PERSONAL BANKING Growing use of the Virtual Assistant has resulted in call reductions to the call centre through 60% LET'S CHAT chat will be stored security in accordance with Qutadvack.policy L = Chat End chat LET'S CHAT = Your location has been shared -203pn NAS-10:27pm Here are the nearest ATMs near Vitual Banker -7.58pm Ok, here are the closest ATMs in your area you • Increasing number of virtual interactions 873 Hi, I'm NAB's virtual assistant, a chatbot designed to answer your general queries. How can I help? 2of • Increasing containment¹ of interactions within the Virtual Assistant 600 You-00pm Where is an ATM? Sep 20 Mar 21 Vitual Sanker-1:00pm Sure, I can find ATMs near you, or you you can enter a postcode for ATMs in another location. NAB ATM, (500m) 100 Elizabeth Street, Melbourne, 3000 NAB ATM, (500) 100 Elizabeth Street, Melbourne, 3000 Open in Maps L Open in Maps L ATMs near me • Increasing automation - ATM & Branch locator, complaint submission GOOGLE MESSAGING Launched Google messaging in Nov 20 - enabling chat and messaging services to show up across key Google assets (maps, search & feature snippets) • First bank in APAC to launch service 3:55+ nab Sort by- Coen new Burgers Thomas Hungry J Ppe Track Man ghs Thomastown Thomastown 40 Conversations (k) Containment How can help you? < Back 2 of 5 Next > How can help you? Do you need a specific type of ATM service? Disability access Deposit < How can we help you? J 0/200 8:47 9:01 &nb burie 9:28> AA anab burnie c OVERVIEW UPDATES REVIEWS PHOTOS ABO 0 google.com/search?clentams = Google www.at.com-contac JOOGLE Contact us for help with your banking- a nab burnie NAB Qnab call centre 3 ALL MAPS NEWS IMAGES VIDEOS If you need help with your banking, we'd love to help. Get in touch and one of our dedicated team will assist you with your question or enquiry ALL NEWS MAPS IMAGES VIDEOS SHOPP Find a NAB bank branch BGB. Personal National Australia Bank / Customer service (03) 8641 9886 Linear Reserve NAB Branch Collingwood Google NAB branch 37***** Bank in Burnie, Tasmania OVERVIEW UPDATES REVIEWS PHOTO ° NAS Branch- Thomastown Contact OVERVIEW UPDATES REVIEWS PHOTOS 10 D (Q O Chat with an associate Get a reply Jaye Etones PRECTIONS MESSAGE SAVE Questions & answers 224-228 Smith St Collingwood VIC 3064 CALL MESSAGE DIRECTIONS WEBSITE New Message with a live agent L 13 22 65 37 Gatley St, Bumie TAS 7320 Be the first to ask a question • >3,000 enquiries serviced since launch Northern School • 80% of enquiries are able to be resolved first time in- channel For Am Google nab.com.au SXXM+3H Collingwood. Victoria See other locations © Add business hours 3.7 (1) Containment occurs when the Virtual Assistant successfully answers a customer's query without the need to include or hand over to a colleague 40 More results www.bruelocal.com.au Bune NAB in Burnie, TAS, Banks - TrueLocal NAB in Burnie, TAS, 7320 Business contact details for NAB including phone number, reviews nab Message with a live agent Questions? Chat wh customer service More at nab.com.au Web that email FAQs and mone www.nas.com.a Contact us for help with your banking - NAB Using merchant support centre Update your contact details. Do you have a hearing or speech impairment and need to talk with us on the phone? Find out how Personal National Australia Bank#4141 INNOVATING WITH STRAIGHTUP CARD STRAIGHTUP CARD • Launched the NAB StraightUp Card in 2H20, Australia's first no-interest credit card Providing a response to customers wanting access to credit that is simple and easy to understand NAB STRAIGHTUP NAB's most popular credit card product 33% of NAB's credit card applications in 1H21 37% Millennial appeal PERSONAL BANKING more applicants under 35 years old vs other cards Award winning VISA RFI Group Intelligence to bank on 2021 RFi Best Lending Innovation Award winner National Australia Bank#4242 22 CORPORATE & INSTITUTIONAL BANKING CASH EARNINGS AND REVENUE ($m) 15.7% (5.7 HOH) REVENUE BREAKDOWN¹ ($m) 8.0% (-12.3% HOH) -0.5% (-3.3% HOH) 48.5% (-32.3% HOH) 1,908 676 740 782 1,549 1,673 592 1,279 1,316 1,272 401 270 Mar 20 Sep 20 ■Cash earnings NET INTEREST MARGIN Mar 21 Mar 20 Sep 20 Mar 21 Mar 20 Sep 20 Mar 21 Mar 20 ■Total revenue ■Markets Revenue RETURNS FOCUS ($bn) 1.72% 1.68% 1.99% 1.63% 1.59% 0.81% 0.69% 0.70% 0.73% Sep 20 ■Other Revenue Mar 21 1.90% 1.91% 1.95% 1.79% 1.63% 1.55% 1.34% 127.6 137.8 Sep 19 Mar 20 Sep 20 Mar 21 Sep 19 Mar 20 Spot RWA Corporate & Institutional Banking ex Markets 129.9 125.7 Sep 20 Mar 21 Pre provision profit % of RWA -- • Ex Markets pre provision profit % of RWA² (1) Markets revenue represents Customer Risk Management revenue and NAB Risk Management Revenue. Includes derivative valuation adjustments (2) Ex Markets pre provision profit % of RWA excludes Markets pre provision profit and average RWAs ཀྱིས National Australia Bank#43CUSTOMER METRICS LARGE CORPORATE & INSTITUTIONAL - RELATIONSHIP STRENGTH INDEX¹ CORPORATE & INSTITUTIONAL BANKING - INTEREST RATE HEDGING³ Relationship Strength Index FOREIGN EXCHANGE4 Relationship Strength Index (Index) 620 600 640 (Index) 650 580 600 600 560 560 540 520 520 480 550 500 500 480 440 450 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 Peer 1 Peer 2 Peer 3 NAB Peer 1 Peer 2 Peer 3 -NAB Peer 1 Peer 2 -Peer 3 -NAB INSTITUTIONAL NPS1,2 40 30 DEBT MARKETS ORIGINATION5 Relationship Strength Index (Index) 600 TRANSACTIONAL BANKING6 Relationship Strength Index (Index) 550 20 550 10 500 0 500 -10 450 -20 400 2017 2018 2019 2020 450 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Peer 1 Peer 2 Peer 3 NAB Peer 1 Peer 2 Peer 3 NAB Peer 1 Peer 2 Peer 3 NAB All data from Peter Lee Associates, Australia. Based on top four banks by penetration. Relationship Strength Index (RSI) is based on a combined measure of most qualitative evaluations. Corporate and Institutional Relationship Banking Survey 2020 Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld Interest Rate Derivatives Survey 2020 (1) (2) (3) (4) Foreign Exchange Survey 2020 (5) Debt Securities Origination Survey 2020 43 (6) Transaction Banking Survey 2020 National Australia Bank#44NEW ZEALAND BANKING CASH EARNINGS AND REVENUE (NZ$m) 44 9.6% (30.0% HOH) 2.5% (6.2% HOH) NET INTEREST MARGIN 1,291 1,323 1,246 2.24% 2.20% 616 562 2.14% 474 Mar 20 2.29% Sep 20 Mar 21 Mar 20 Sep 20 ■Total revenue Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 ■Cash earnings BUSINESS & HOUSING LENDING GLAS (NZ$bn) 10.5% (7.6% HOH) CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS (NZ$m) -6.9% (-1.2% HOH) 0.15% 0.24% 0.09% 106 49.5 44.8 46.0 43.6 41.1 40.6 66 42 Mar 20 Sep 20 ■Housing lending Mar 21 Mar 20 Sep 19 Mar 21 Sep 20 ■Business Lending Mar 20 (0.04%) (19) Sep 20 Mar 21 Credit impairment charge/(writeback) Credit impairment as a % of GLAS (half year annualised) National Australia Bank#45KEY CUSTOMER METRICS BNZ BUSINESS NPS1,3 NEW ZEALAND BANKING 15 25 15 5 -5 -15 -25 3 -13 -15 -26 -35 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 BNZ Peer 1 Peer 2 -Peer 3 BNZ CONSUMER NPS2,3,4 45 40 35 30 25 20 40 36 34 26 19 15 10 5 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 BNZ -Peer 1 Peer 2 Peer 3 Peer 4 45 Source: Kantar Business Finance Monitor (data on 4 quarter roll). Total business market up to annual turnover of $150m; includes Agribusiness with a turnover of $100k+ (2) Source: Camorra Retail Market Monitor (data on 12 month roll). There has been a change in NPS used for BNZ reporting, to reflect the total Consumer market, rather than Combined Priority Segments (which include Starters and Savers, Home Owners and Investors and High Net Worth) (3) Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld (4) In 2019, a change in Retail Market Monitor methodology led to a re-set of NPS for the consumer market for all five major banks. The use of a 12 month rolling average in BNZ reporting smoothed the transition (we used data that was collected in parallel from May 2019 to September 2019), but a methodology-driven increase in NPS for all banks is visible during this period of transition. The new methodology has been fully embedded since October 2019 National Australia Bank#46LENDING MIX PORTFOLIO BREAKDOWN – TOTAL NZ$91.1BN - 46 46 Commercial Real Estate 8% Agriculture, Forestry and. Fishing 16% Retail and Wholesale Trade 3% Manufacturing. 4% Other Commercial Personal Lending 3% 12% Mortgages 54% NEW ZEALAND BANKING MORTGAGE PORTFOLIO BREAKDOWN BY GEOGRAPHY - TOTAL MORTGAGE NZ$49.5BN Canterbury 12% Auckland 48%. Wellington 11% Waikato 7% Bay of Plenty 6% Other 16% AGRIBUSINESS PORTFOLIO BREAKDOWN BY INDUSTRY - TOTAL AGRI NZ$14.7BN Dairy 48% Drystock 21% Forestry 5% Kiwifruit 7% Other 13% Services to Agriculture 6% National Australia Bank#47NEW ZEALAND HOUSING LENDING KEY METRICS New Zealand Housing Lending Total Balances (spot) NZ$bn NEW ZEALAND BANKING Sep 19 Mar 20 Sep 20 Mar 21 Mar 20 Portfolio Sep 20 Drawdowns¹ Mar 21 43.0 44.8 46.0 49.5 5.8 5.1 9.5 By product - Variable rate - Fixed rate - Line of credit 15.9% 15.2% 14.1% 12.9% 15.4% 15.1% 11.2% 81.7% 82.6% 84.1% 85.5% 84.0% 84.6% 88.2% 2.4% 2.2% 1.8% 1.6% 0.6% 0.3% 0.6% By borrower type Owner Occupied 66.2% 66.4% 66.0% 64.5% 70.2% 64.5% 60.1% - Investor 33.8% 33.6% 34.0% 35.5% 29.8% 35.5% 39.9% By channel - Proprietary - Broker Low Documentation Interest only² LVR at origination 90+ days past due Impaired loans Specific Impairment coverage ratio Loss rate³ 80.0% 77.9% 76.2% 73.7% 70.8% 68.8% 67.9% 20.0% 22.1% 23.8% 26.3% 29.2% 31.2% 32.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 20.4% 24.4% 25.5% 20.2% 29.2% 28.2% 28.5% 66.5% 66.7% 66.8% 66.0% 0.07% 0.11% 0.13% 0.14% 0.03% 0.03% 0.02% 0.01% 17.0% 25.5% 26.3% 20.8% 0.01% 0.01% 0.00% 0.00% (1) Drawdowns is defined as new lending including limit increases and excluding redraws in the previous six month period (2) Excludes line of credit products (3) 12 month rolling Net Write-offs / Spot Drawn Balances 47 National Australia Bank#48NZ CUSTOMER DEPOSITS BY INTEREST RATE NZ CUSTOMER DEPOSITS BY INTEREST RATE (NZD) $42.5bn of deposits already at or near zero interest rate NEW ZEALAND BANKING 48 $24.7bn $17.8bn $8.7bn $13.1bn $2.3bn $0.9bn less than 0.01% between 0.01% to 0.25% between 0.26% to 0.50% between 0.51% to 0.75% between 0.76% to 1.00% more than 1.00% National Australia Bank#49ADDITIONAL INFORMATION TECHNOLOGY & OPERATIONS UPDATE National Australia Bank#50SOLID PROGRESS MADE ON OUR TECHNOLOGY TRANSFORMATION KEY AREAS OF FOCUS Leverage the Cloud, Microservices and APIs • 3 YEAR ACHIEVEMENTS¹ Built >120 microservices and >1,600 APIs – increasing efficiency of new feature delivery • 45% of total apps running on the cloud - with no downtime from infrastructure issues • Reduced the number of applications by 7%, reducing complexity Simplify legacy technology • • • • Simplified and modernised workplace technology for colleagues 87% reduction in High and Critical rated incidents² Delivered data use cases covering at-risk potential lending to customers, payroll fraud, fraud analysis, call centre volumes, financial crime, among others 40x increase in data protection efficacy by implementing preventative tools³ Kept losses broadly stable despite significant surge in attempted fraud Achieved a 12% increase in NIST4 score Embracing Data & Analytics • World class cyber security Culture of high speed delivery • Significant reduction in average time to deliver change • Generated 11% improvement in developer productivity5 • Insourcing of major contracts mostly completed, or winding down • Tech and Ops insourced component of workforce now 68% from 30% 1 Insourcing key technology functions & uplifting skills >2,200 industry recognised cloud certifications (#5 of all non-cloud companies globally) Investment in technology has generated clear benefits and underpins cost & revenue momentum going forward 50 50 Cost reduction NPS6 increase Improved resilience Faster time to market Safe growth Uplifting colleague skills (1) Using 2018 as baseline (2) Incidents include NAB and BNZ (3) Representing 40x reduction in actual losses from data breaches since 2018 (4) The NIST Cybersecurity Framework provides cyber security guidance for how organisations can assess and improve their ability to prevent, detect, and respond to cyber attacks. (5) Based on number of features delivered per engineering FTE since October 2018 (6) Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld National Australia Bank#51STRONG TECH FOUNDATIONS ENABLING FASTER SPEED TO MARKET Investment in technology infrastructure and architecture (Cloud, Microservices, APIs) over time has increased speed of delivery for colleagues and customers NAB APP - MORE FUNCTIONALITY AND RECORD HIGH NPS¹ Continued focus on increasing Mobile App functionality • Fix rate for home loan - ability to fix home loan rate through the app, option now also available to joint account holders • Start credit card and personal loan account applications from the app • First bank to integrate with Slyp to provide a digital smart receipting capability - 2021 Canstar Innovation Excellence Award winner I Continued investment in Mobile App generating record high NPS 45 36 37 IB & NAB CONNECT PLATFORMS MOVED TO CLOUD After NAB Connect in 2H20, Internet Banking platform infrastructure moved to the cloud in 1H21. Benefits include: ✓ Faster platform performance ✓ Reduction in deployment times ✓ Improved monitoring for quicker incident recovery ✓ Increased platform security Auto-scaling capabilities to support high demand periods Significantly reduced risk of platform outages 13 May 182 Mar 19 Mar 20 ■Mobile App NPS Mar 21 (1) Internal measure of NPS, calculated on a 26 week rolling average. Net PromoterⓇ and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld (2) Started NPS tracking for the NAB App in May 18 51 National Australia Bank#52ADDITIONAL INFORMATION LONG-TERM: A SUSTAINABLE APPROACH National Australia Bank#53SUSTAINABILITY IS EMBEDDED IN THE LONG-TERM PILLAR OF OUR GROUP STRATEGY COMMERCIAL RESPONSES TO SOCIETY'S BIGGEST CHALLENGES 磁 Supporting a low-carbon economy, driving investment in natural assets, helping people reduce financial stress and supporting more sustainable and inclusive communities . Our priorities: Climate change Affordable and specialist housing Financial health and resilience Sustainable agriculture Indigenous economic participation RESILIENT AND SUSTAINABLE BUSINESS PRACTICES Managing our environmental, social and governance (ESG) risks and opportunities responsibly, and creating Australia's leading ESG risk capability Our priorities: Colleagues and culture ESG risk management Supply chain management Human rights, including modern slavery Inclusive banking INNOVATING FOR THE FUTURE $ Driving investment in new, emerging and disruptive technologies, and partnering with customers, industry and government on critical initiatives Our priorities: . . Our future core business and market- leading data analytics Partnerships that matter 7 AFFORDABLE AND CLEAN ENERGY 8 DEGENT WORK AND ECONOMIC GROWTH 9 AND INFRASTRUCTURE INDUSTRY, INNOVATION 11 SUSTAINABLE CITIES AND COMMUNITIES 13 CLIMATE ACTION 15 LIFE ON LAND ALIGNED TO SIX KEY UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS¹ - WHERE WE CAN MAKE THE BIGGEST IMPACT (1) www.un.org/sustainabledevelopment 53 National Australia Bank#54COMMERCIAL RESPONSES - CLIMATE CHANGE • NAB is the only Australian bank to have signed the United Nations' Collective Commitment to Climate Action • • Continued drive for opportunities in sustainable financing Focused on supporting customers with their transition plans, aligning our portfolio to net zero emissions by 2050 Carbon neutral in operations for over a decade, with ongoing work to drive further efficiencies Commitments Achieve a Paris Agreement aligned net zero emissions lending portfolio by 2050 • 1H21 Progress • Sector specific pathway mapping work is underway and target- setting is on track for completion and disclosure by 2022 Commenced engagement with 100 of our largest GHG-emitting customers on their low-carbon transition pathways Provide $70bn in environmental financing by 2025 Cap thermal coal mining exposures at Sep 2019 levels, reduce thermal coal mining financing by 50% by 2028 and effectively zero by 2035, apart from residual performance guarantees to rehabilitate existing coal assets Source 100% of our electricity consumption from renewable sources by 2025 • Review of oil & gas sector underway . $47.6bn cumulative progress, $5.1bn delivered in 1H211 • 14.7% ($112.0m) reduction from FY19 including 3.7% ($24.9m) reduction from FY20. Expected 50% reduction by 2026, and effectively zero by 2030 • 30% of electricity use from renewable sources in 1H21, increase from 6% in 1H202 • All branches in Australia expected to be powered by 100% renewable energy by the end of 2021 Reduce operational GHG emissions (tCO2-e) by 51% from 2019 levels by 2025 (Science-based target) . 64% reduction in GHG emissions (tCO2-e)² from FY193 Reduce operational energy use (GJ) by 30% from 2019 levels by 2025 • 23% reduction in energy use (GJ)² from FY19 54 (1) Represents total cumulative new flow of environmental financing from 1 October 2015. Our 2020 Sustainability Data Pack provides a breakdown of what this target includes and how the progress is calculated. (2) NAB's operational environment numbers, are reported on a July-June performance period, therefore H1 figures refer to 1 July 2020 - 31 December 2020. (3) The significant progress towards NAB's GHG and energy reductions targets has been influenced by COVID-19 impacts, we do not expect all of the reductions achieved to date to be permanent. National Australia Bank#55COMMERCIAL RESPONSES - CLIMATE CHANGE Energy generation EAD 7.79 by fuel source¹ ($bn) 7.26 7.37 1.16 6.83 0.94 0.98 0.12 ■Gas 0.12 0.08 0.78 1.15 0.08 1.16 1.04 0.99 ■ Coal 1.94 1.74 1.93 1.70 ■Mixed Fuel 1.07 1.18 ■Other/Mixed Renewable 0.97 1.03 ■Hydro 2.09 2.35 2.35 2.31 Wind Renewables comprise 72.8% of energy generation EAD at 1H21, compared to 68.8% at 1H20 Longer-term trajectory: renewables have steadily increased from 43.5% of energy generation portfolio at 1H16. Sep 19 Mar 20 Sep 20 Mar 21 Resource EAD 11.54 by type ($bn) 10.64 1.45 1.03 9.33 0.62 ■Gold Ore Mining 0.75 0.74 8.41 1.08 0.76 0.84 0.60 ■Metallurgical Coal Mining 0.63 • 0.87 0.32 0.67 0.65 ■Thermal Coal Mining 2.39 Thermal coal exposures decreased 12.4% from 1H20, and 3.7% from FY20 0.76 0.65 2.18 ■Iron Ore Mining 2.05 2.02 1.40 1.31 ■Other Mining 1.40 1.41 ~36% of thermal coal mining EAD is for performance guarantees to rehabilitate existing coal mine sites ■Mining Services 3.73 4.09 2.74 2.76 2 ■ Oil & Gas Extraction Sep 19 Mar 20 Sep 20 Mar 21 55 (1) NAB methodology (based upon the 1993 ANZSIC codes) at net EAD basis. Excludes exposure to counterparties predominantly involved in transmission and distribution. Vertically integrated retailers included and categorised as renewable where majority of their generation activities sourced from renewable energy. More detail at https://www.nab.com.au/about-us/social-impact. (2) A significant contributor to the reduction of $1.3bn in the Resources portfolio between Mar-20 and Sep-20 is AUD currency appreciation of USD denominated exposures and lower mark-to-market positions of treasury-related products in the Oil & Gas extraction sector. National Australia Bank#56COMMERCIAL RESPONSES - CLIMATE CHANGE SUSTAINABLE FINANCING • #10 in Climate Bond Initiative's list of largest cumulative global issuers of certified climate bonds¹ . · Led issuance of 12 green, social, sustainability and sustainability- linked (GSS) bonds raising over $5bn for customers, including: - - Australian-first: Arranged and led $190 million Climate Bond certified 100% green asset-backed securitisation from Brighte, to help Australian families save on energy bills New Zealand-first: BNZ led the first on-farm sustainability- linked loan, a three-year $50m loan set to deliver water, emissions and biodiversity benefits Together with Melbourne Business School, we are raising the bar on Climate Banking professionalisation, having highly skilled bankers work with customers on their transition planning Environmental Finance Bond Awards 2021 Winner Green bonds - asset-backed/asset-based bond of the year ACHIEVEMENT AWARDS FinanceAsia 2020 Green bonds - asset-backed/asset- based bond of the year: Brighte Green Trust Best Sustainable Finance House IJInvestor Awards 2020 Best Refinancing of the Year -€100m incorporating a sustainability linked loan. NAB acted as Joint Lead Sustainability Arranger . TOP RENEWABLE ENERGY PLAYERS - AUSTRALIA² Cumulative value of deals in US$bn (2004 - 31 March 2021) National Australia Bank Ltd Clean Energy Finance Corp Mitsubishi UFJ Financial Group Inc Westpac Banking Corp Australia & New Zealand Banking Group Ltd Sumitomo Mitsui Financial Group Inc Mizuho Financial Group Inc Societe Generale SA Commonwealth Bank of Australia BNP Paribas SA DISASTER RESILIENCE 2.7 1.6 1.6 1.5 1.4 1.4 1.2 1.2 1.2 0.9 >1,700 grants worth over $3m provided to support customers and colleagues whose homes and business' are affected by NSW floods and WA Cyclone Seroja³ $100,000 committed to each of NSW SES and GIVIT's Severe Storms and Flooding relief package³ Launched $1.2m NAB Foundation Community Grants program to help customers prepare for and recover from natural disasters, as well as building resilience against future disasters Committed $10m over the next ten years as part of NAB's Environmental Resilience Fund for regional projects that improve resilience to natural disasters 56 (1) Ranking as at October 2020 (2) Bloomberg NEF Country Profile for Australia - Top Renewable Energy Players (2004 to 1Q 2021). Cumulative totals are in USD as at 31 March 2021. Totals do not include large hydro (3) Support provided for customers and colleagues affected by natural disasters will cover payments made after 31 March 2021 National Australia Bank#57COMMERCIAL RESPONSES - SUPPORTING INDUSTRY AND COMMUNITIES FINANCIAL HEALTH AND INCLUSION • . • • Implemented measures to block descriptions in transfers made via internet banking that contain abusive, threatening or explicit language to further our work in addressing financial abuse Ongoing capital commitment of $130 million to support microfinance initiatives, including >$1m worth of NILS loans provided to support customers affected by COVID-19 Australian Network on Disability Access and Inclusion Index score of 71, compared with an average of 44 from participating organisations Rolling out Portable Hearing Loop devices across all branches to support customers who are hard of hearing SUSTAINABLE AGRICULTURE • Progressed NAB's Natural Capital Roadmap through continued collaboration with ClimateWorks, presenting the Natural Capital Metric Catalogue to a range of advisory industry bodies, technology, research, financial institutions and government stakeholders Supported a CSIRO research project to develop and apply a framework for natural capital risk assessment in the Australian forestry industry • INDIGENOUS ECONOMIC PARTICIPATION Progressed key NAB Elevate Reconciliation Action Plan¹ commitments: - - $1.5m spent with Indigenous businesses in NAB's supply chain 3,443 microfinance loans provided to Indigenous Australians² Increased calls to the Indigenous Customer Service Line, with >1,880 customers served during 1H21 Released our first radio advertising campaign available in seven First Nations languages AFFORDABLE AND SPECIALIST HOUSING • Financed ~240 affordable and environmentally sustainable dwellings with Nightingale Housing across multiple projects; Nightingale Village, Terrace House & Ballarat. These contribute towards NAB's goal of $2bn in financing for affordable and specialist housing by FY23 Closed GBP 212.5m deals to English Regulated Housing Associations, over 50% structured on a sustainability-linked basis³ · Joint-lead manager and ESG Structuring Bank for Kensington Mortgage Company's world-first social GBP 472m RMBS, improving access to finance for buyers with non-traditional incomes 57 (1) NAB's Elevate Reconciliation Action Plan (2019-2021) outlines our commitments to support Indigenous Australians, available at http://nab.com.au/indigenous (2) Microfinance loans provided in partnership with Good Shepherd Australia and New Zealand (GSANZ), loans provided to Indigenous Australians are reported aligned to GSANZ's July-June reporting year. 1H21 numbers therefore reflect 1 July 2020 - 31 December 2020 (3) Deals lead by NAB London Branch, an "Early adopter" to the Sustainability Reporting Standard for Social Housing in the UK National Australia Bank#58RESILIENT AND SUSTAINABLE BUSINESS PRACTICES INCLUSIVE CULTURE • . • . Belonging for all: additional gender marker and salutation options added to our systems NAB CEO committed to stand against gendered harassment and violence by signing Diversity Council Australia's #IStandForRespect pledge, committing to continue to address sexual and sex-based harassment in the workplace Offered 41 traineeships to Indigenous Australians and offered 10 virtual Summer Internship for Indigenous Australians¹ Supported the 'Gari Yala' research into the experiences of First Nations employees in workplaces across Australia, incorporating key findings into NAB's employment strategies WGEA Employer of Choice for Gender Equality citation, ranked #14th Globally in Equileap's 2021 Gender Equality Global Report and Ranking and included in the 2021 Bloomberg Gender-Equality Index SUSTAINABLE PROPERTY PORTFOLIO . Upon completion, all new commercial buildings are expected to achieve a 5 Star Green rating • Our new commercial buildings are designed to be intuitive and adaptive spaces for colleagues to connect in the office and virtually WGEA Employer of Choice for Gender Equality Bloomberg Gender Equality Index 2021 AUSTRALIAN LGBTQ INCLUSION AWARDS 2020 AWEI GOLD EMPLOYER EQUILEAP MAKE A DIFFERENCE AND A RETURN TOP GRADUATE EMPLOYERS 2021 PRINCIPLES FOR RESPONSIBLE BANKING • NAB driving progress to align to Principles² with a focus on: Impact analysis: Piloting the Portfolio Impact Analysis tool, assessing environmental and social impacts of our product portfolio. Disclosure on this process to take place in NAB's FY21 reporting . Target-setting: Contributing to member sub-groups to develop guidance for consistent, appropriate target setting with regards to biodiversity and financial inclusion Collective progress: Supporting and aligning activities across banks for the measurement of collective progress (1) Data is as at 31 March 2021. Active recruitment for Traineeships will continue throughout 2021 (2) The United Nations Principles for Responsible Banking are a unique framework for ensuring that signatory banks' strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement. Banks representing one third of the global banking sector have committed to the Principles 58 National Australia Bank#59ADDITIONAL INFORMATION AUSTRALIAN BUSINESS LENDING National Australia Bank#60KEY METRICS BUSINESS LENDING REVENUE ($m) 2,248 351 2,223 2,204 2,205 343 329 334 1,897 1,880 1,875 1,871 Sep 19 BUSINESS LENDING GLAS ($bn) 60 60 Mar 20 ■ NII Sep 20 Mar 21 215.0 206.5 205.1 207.1 0.1 0.1 0.1 0.1 97.4 105.8 95.6 97.1 109.0 Sep 19 ■Business & Private Banking 109.1 109.4 109.9 Mar 20 Sep 20 Mar 21 ■Corporate & Institutional Banking ■ Other National Australia Bank#6161 BUSINESS LENDING ASSET QUALITY BUSINESS LENDING CREDIT IMPAIRMENT CHARGE AND AS % OF GLAS ($m) 0.14% 151 0.07% 77 Mar 20 Sep 19 Credit Impairment charge 0.33% 336 BUSINESS LENDING 90+ DPD AND GIAS AND AS % OF GLAS ($m) 0.04% 0.67% 0.66% 0.72% 0.74% 1,394 1,420 1,474 1,528 Sep 20 44 Mar 21 Sep 19 -Credit Impairment/GLAs (half year annualised) TOTAL BUSINESS LENDING SECURITY PROFILE¹ Mar 20 Sep 20 Mar 21 Total Business Lending 90+ DPD and GIAS Business Lending 90+ DPD and GIAs to Business Lending GLAS BUSINESS LENDING PORTFOLIO QUALITY 22% 22% 20% 20% 19% 19% 20% 19% 51% 52% 49% 49% 59% 59% 60% 61% 49% 48% 51% 51% Sep 19 Mar 20 Sep 20 Mar 21 ■Fully Secured ■Partially Secured ■ Unsecured Sep 19 Mar 20 ■Sub-Investment grade equivalent Mar 21 Sep 20 ■Investment grade equivalent (1) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security National Australia Bank#62BUSINESS & PRIVATE BANKING ASSET QUALITY B&PB CREDIT IMPAIRMENT CHARGE AND AS % OF GLAS¹ B&PB 90+ DPD AND GIAS AND AS % OF GLAS¹ ($m) 0.22% 0.20% ($m) 1.53% 1.32% 0.13% 1.07% 0.95% 3,025 217 196 2,584 0.07% 2,111 27 1,905 126 21 1,611 70 1,246 127 40 7 955 1,036 170 84 84 63 Sep 19 950 1,075 1,338 1,414 2 5 (21) Mar 20 Sep 20 Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 Business lending Other banking products Housing lending Credit impairment charge as % of GLAS annualised B&PB BUSINESS LENDING SECURITY PROFILE² Housing 90+ DPD and GIAs 90+ DPD and GIAs to GLAS Non-housing 90+ DPD and GIAS B&PB BUSINESS LENDING PORTFOLIO QUALITY 5% 5% 5% 5% 21% 21% 20% 20% 26% 25% 24% 26% 74% 74% 75% 75% 74% 75% 76% 74% Sep 19 Mar 20 Sep 20 Mar 21 ■Fully Secured ■Partially Secured ■ Unsecured Sep 19 Mar 20 Sub-Investment grade equivalent Sep 20 ■Investment grade equivalent Mar 21 (1) B&PB credit impairment charges and 90+ DPD and GIAS reflect the total B&PB portfolio including mortgages (2) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security 62 62 National Australia Bank#63ADDITIONAL INFORMATION AUSTRALIAN HOUSING LENDING National Australia Bank#64HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING REVENUE HOUSING LENDING VOLUME GROWTH¹ ($bn) ($m) 1,925 122 1,988 114 2,038 119 2,085 108 Owner Occupier 5.8% (3.4% HOH) 152.9 156.4 1,803 1,874 1,919 1,977 Investor -7.5% (-3.3% HOH) 161.7 108.8 104.0 100.6 Sep 19 Mar 20 ■ NII Sep 20 Mar 21 Mar 20 Sep 20 ■PB B&PB Mar 21 Mar 20 Sep 20 ■PB B&PB Mar 21 HOUSING LENDING BY CHANNEL ($bn) 112.5 113.0 114.8 103.8 101.9 100.1 86.1 84.2 84.8 HOUSING LENDING FLOW MOVEMENTS ($bn) 41 (4) (15) (21) 299 300 Mar 20 Sep 20 Mar 21 Mar 20 Sep 20 Mar 21 Mar 20 Sep 20 Mar 21 Sep 20 New fundings & redraw ■Retail and UBank Broker and Advantedge Interest & Repayments Pre- payments External refinance Mar 21 & closures ■■Business and Private (1) APRA Monthly Authorised Deposit-taking Institution statistics March 2021. UBank included in Personal Banking 64 National Australia Bank#65HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING VOLUME BY BORROWER AND REPAYMENT TYPE¹ Owner Occupier 61.6% Owner Occupier Interest Only, 3.6% Investor Interest Only, 12.0% Investor Principal & Interest, 26.4% Investor 38.4% AUSTRALIAN MORTGAGES STATE PROFILE VIC/TAS 32% 65 Owner Occupier Principal & Interest, 58.0% OWNER OCCUPIER MONTHLY GROWTH¹ NSW/ACT 40% INVESTOR MONTHLY GROWTH¹ QLD 15% WA 8% SA/NT 5% 0.4% 1.0% 0.2% 0.8% 0.0% 0.6% -0.2% -0.4% 0.4% -0.6% 0.2% -0.8% -1.0% 0.0% Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 -NAB growth MoM System growth MoM (1) Only includes housing loans to households based on APRA ARF 720.1 reporting definitions, and excludes counterparties such as private trading corporations -NAB growth MoM System growth MoM National Australia Bank#66HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING 90+ DPD & GIAS AS % OF GLAS 90+ DPD & GIAS AS % OF TOTAL HOUSING LENDING GLAS - BY CHANNEL 3.0% 2.5% 2.49% 2.0% 1.71% 1.74% 1.67% 1.6% 1.73% 2.0% 1.61% 1.2% 1.5% 1.61% 1.50% 0.8% 1.0% 0.4% 0.5% 0.0% 0.0% Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 -NSW/ACT QLD SA/NT VIC/TAS WA -Total Broker -Proprietary 66 REPAYMENT BUFFERS¹ INTEREST ONLY CONVERSIONS TO P&I ($bn) 60% 9.9 9.7 9.9 9.2 50% 8.7 7.9 7.6 2.0 1.5 2.1 40% 36% 6.8 32% 3.8 2.3 5.9 1.6 2.4 30% 1.6 1.1 20% 15% 14% 15% 15% 15% 7.9 8.2 7.8 13% 12% 13% 6.4 6.3 10% 7% 7% 4.8 5.5 5.1 5.2 3% 3% 0% > 2 years 1-2 years 3-12 months ■Mar 20 1-3 months ■Mar 21 <1 month On time Behind 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 ■Contractual conversion ■Early conversion (1) Represents payments in advance by accounts. Includes offsets. Excludes Advantedge book and line of credit National Australia Bank#67HOUSING LENDING PORTFOLIO QUALITY DYNAMIC LVR BREAKDOWN OF DRAWN BALANCE LVR BREAKDOWN AT ORIGINATION 67 50% 40% 30% 20% 10% 50% Mar 21 Dynamic LVR 42.3% 40% 30% 20% 10% 0% LVR ≤60% LVR 60.01% 70% LVR 70.01% - 80% Sep 19 ■ Mar 20 LVR >90% ■ Mar 21 LVR 80.01% 90% ■Sep 20 INCREASED FIRST HOME BUYER ACTIVITY First home buyers with LVR >80% on origination require lenders mortgage insurance1 or may be supported by the First Home Loan Deposit Scheme 15% 9% 0% LVR ≤60% LVR 60.01% - 70% LVR LVR LVR 70.01% - 80% 80.01% - 90% >90% Share of 1H21 Drawdowns ■Sep 19 ■Mar 20 ■Sep 20 ■Mar 21 Share of Housing Lending GLAS at Mar 21 (1) LMI may be waived in certain limited scenarios, subject to meeting eligibility criteria National Australia Bank#68HOUSING LENDING PRACTICES & REQUIREMENTS KEY ORIGINATION REQUIREMENTS Income Household expenses • Income verified using a variety of documents including payslips and/or checks on salary credits into customers' accounts • 20% shading applies to less certain incomes (temporarily increased to 30% in May 2020, reduced back to 20% in November 2020) Assessed using the greater of: • • Customers' declared living expenses, enhanced in 2016 to break down into granular sub categories Household Expenditure Measure (HEM) benchmark plus specific customer declared expenses (e.g. private school fees). HEM is adjusted by income and household size LOAN-TO-VALUE RATIO (LVR) LIMITS Principal & Interest - Owner Occupier Principal & Interest - Investor Interest Only Owner Occupier Interest Only - Investor 95% 90% 80% 90% 80% 'High risk' postcodes (e.g. mining towns) 70% 'At risk' postcodes OTHER REQUIREMENTS 68 Serviceability . Assess customers' ability to repay based on the higher of the customer rate plus serviceability buffer (2.5%) or the floor rate (4.95%) . Loan-to-Income decline threshold of 7x Debt-to-Income decline threshold of 9x • Lenders' mortgage insurance (LMI) applicable for majority of lending >80% LVR Existing debt • • Assess Interest Only loans on the full remaining Principal and Interest term Verify using declared loan statements and assess on the higher of the customer rate plus serviceability buffer (2.5%) or the floor rate (4.95%) • Assessment of customer credit cards assuming repayments of 3.8% per month of the limit Assessment of customer overdrafts assuming repayments of 3.8% per month of the limit • LMI for inner city investment housing >70% LVR Apartment size to be 50 square metres or greater (including balconies and car park) NAB Broker applications assessed centrally – verification and credit decisioning Maximum Interest Only term for Owner Occupier borrowers of 5 years National Australia Bank#69HOUSING LENDING KEY METRICS¹ Australian Housing Lending Total Balances (spot) $bn Average loan size $'000 O Variable rate Fixed rate Sep 19 Mar 20 Sep 20 Mar 21 Mar 20 Sep 20 Mar 21 Portfolio Drawdowns² 304 302 299 300 27 29 32 308 309 309 310 389 383 401 73.5% 75.9% 71.9% 67.8% 78.5% 64.0% 53.2% 20.4% 18.3% 22.8% 27.3% 20.4% 35.0% 45.8% 6.1% 5.8% 5.3% 4.9% 1.1% 1.1% 1.0% Line of credit By borrower type Owner Occupied ³,4 56.9% 58.4% 60.1% 61.6% 67.7% 70.1% 71.3% Investor³,4 43.1% 41.6% 39.9% 38.4% 32.3% 29.9% 28.7% By channel - Proprietary Broker Interest only5 Low Documentation Offset account balance ($bn) LVR at origination Dynamic LVR on a drawn balance calculated basis 63.3% 62.8% 62.2% 60.0% 54.6% 53.1% 52.1% 36.7% 37.2% 37.8% 40.0% 45.4% 46.9% 19.8% 17.2% 14.8% 13.6% 17.4% 17.9% 47.9% 17.3% 0.4% 0.4% 0.4% 0.3% 29.0 30.0 32.6 33.3 69.0% 69.1% 69.2% 69.5% 47.6% 44.6% 45.5% 42.3% Customers in advance ≥1 month (including offset facilities) 66.1% 66.5% 69.9% 69.1% Avg # of monthly payments in advance (including offset facilities) 34.3 36.3 43.4 45.1 90+ days past due 0.98% 1.04% 1.18% 1.61% Impaired loans 0.11% 0.12% 0.10% 0.10% Specific provision coverage ratio 33.4% 33.3% 35.4% 32.8% Loss rate? 0.02% 0.02% 0.02% 0.01% Number of properties in possession³ 320 268 155 113 HEM reliance 27% 33% 33% 35% (1) Excludes Asia (5) Excludes line of credit products (3) (2) Drawdowns is defined as new lending excluding limit increases and redraws in the previous six month period Portfolio sourced from APRA Monthly Banking Statistics (6) Excludes Advantedge and line of credit (7) 12 month rolling Net Write-offs / Spot Drawn Balances (4) Drawdowns sourced from management data (8) Reduction in properties in possession in Sep 20 and Mar 21 reflects pause in legal activity due to COVID-19 National Australia Bank 69#70ADDITIONAL INFORMATION OTHER AUSTRALIAN PRODUCTS National Australia Bank#7171 DEPOSITS & TRANSACTION ACCOUNTS DEPOSIT REVENUE ($m) CUSTOMER DEPOSITS BY INTEREST RATE¹ (%) 100 1,762 28 1,700 28 1,623 27 1,541 24 1,407 80 22 60 $235bn of deposits already at or near zero interest rate 1,733 1,672 1,596 1,517 40 $125.8bn 1,385 $109.6bn $80.5bn 20 20 $28.6bn $20.1bn $10.9bn 0 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 less than or equal 0.01% ■ NII between 0.02% to 0.25% between 0.26% to 0.50% between 0.51% to between 0.76% to more than 1.00% 0.75% 1.00% CUSTOMER DEPOSIT BALANCES BY PRODUCT ($bn) 131 121 111 90 95 95 46 97 129 109 116 120 108 93 32 36 19 Sep 19 22 29 30 33 33 33 Mar 20 Sep 20 Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 Sep 19 Mar 20 ■NBIS ■Transaction ■Savings Sep 20 ■Term Deposits Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 ■ Offsets (1) Australia only, as at 31 March 2021. Customer deposits exclude home loan offsets National Australia Bank#72OTHER BANKING PRODUCTS PERSONAL LENDING BALANCE AND MARKET SHARE¹ 72 ($bn) 9.9% 9.3% 9.1% 8.9% CARDS BALANCE AND MARKET SHARE2,3 ($bn) 13.3% 13.2% 13.2% 13.3% 1.5 1.4 1.1 5.7 5.4 4.4 4.6 1.0 Sep 19 Sep 20 Mar 21 Sep 19 Mar 20 Sep 20 Mar 21 -Market share Cards Market share Mar 20 Personal Lending CARDS² AND PERSONAL LENDING 90+ DPD AND AS % OF TOTAL CARDS AND PERSONAL LENDING GLAS CONSUMER CARDS 90+ DPD AS % OF OUTSTANDINGS ($m) 1.6% 1.4% 1.10% 1.13% 1.16% 1.2% 0.82% 1.0% 0.8% 80 80 77 64 46 0.6% 0.4% Sep 19 Mar 20 Sep 20 Mar 21 Mar 18 Sep 18 Mar 19 90+ DPD 90+ DPD/GLAS - NSW/ACT QLD Sep 19 SA/NT Mar 20 Sep 20 Mar 21 VIC/TAS -WA -Total (1) Personal Loans market share is based on RFI peer group benchmarking and includes secured and unsecured loans (2) Includes consumer and commercial cards eNo (3) Market share refers to consumer cards only National Australia Bank#73ADDITIONAL INFORMATION GROUP ASSET QUALITY National Australia Bank#74GROUP CREDIT IMPAIRMENT CHARGE CREDIT IMPAIRMENT CHARGE AS % OF GLAS 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% Late 80's/Early 90's Recession GFC 0.2% -0.1% Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Mar 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 CREDIT IMPAIRMENT CHARGE AND AS % OF GLAS¹ 74 ($m) 0.38% 0.54% 0.31% 1,601 0.18% 0.12% 722 426 299 0.16% 399 0.13% 0.14% 0.16% 0.14% 0.15% 0.16% 0.13% 0.14% 0.15% 1,161 349 375 425 394 416 373 406 449 470 (0.04%) (128) Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 (1) Ratios for all periods refer to the half year ratio annualised National Australia Bank#75GROUP ESTIMATED LONG RUN LOAN LOSS RATE 1985 TO 2021 GROUP BUSINESS MIX - GLAS BY CATEGORY 1985 Personal lending 8% ESTIMATING LONG RUN LOAN LOSS RATE NAB Australian geography net write off rates as a % of GLAS 1985 - 2020² Long run average Home lending 16% 2021 Home lending 58% Home lending³ 0.03% Commercial¹ 76% Personal lending³ 1.55% Commercial³ 0.53% Australian average (1985-2020) 0.33% Personal lending 1% Group average based on 2021 business mix 0.25% Commercial 41% Group average4 based on 2021 business mix excluding 1991-1993 and 2008-2010 0.18% 75 (1) For 1985 Group business mix, all overseas GLAs are allocated to Commercial category (2) Data used in calculation of net write off rate as a % of GLAs is based on NAB's Australian geography and sourced from NAB's Supplemental Information Statements (2007 - 2020) and NAB's Annual Financial Reports (1985 - 2006) (3) Home lending represents "Real estate - mortgages" category; Personal lending represents "Instalment loans to individuals and other personal lending (including credit cards)" category; Commercial represents "all other industry lending categories" as presented in the source documents as described in note 2 above (4) Group average is calculated by applying each of the Australian geography long run average net write off rates by product to the respective percentage of Group GLAS by product as at 31 March 2021. Commercial long run average net write off rate has been applied to acceptances National Australia Bank#76GROUP LENDING MIX GROSS LOANS AND ACCEPTANCES BY PRODUCT - $599BN 76 Other term lending 38% GROSS LOANS AND ACCEPTANCES BY GEOGRAPHY¹ Other International 3% New Zealand 14% Australia 83% Housing loans. 58% Asset & lease financing 2% Overdrafts 1% Credit card outstandings 1% GROSS LOANS AND ACCEPTANCES BY BUSINESS UNIT New Zealand Banking 14% Other 2% Business & Private Banking 33% (1) Based on booking office where transactions have been recorded Corporate & Institutional Banking 16% Personal Banking 35% National Australia Bank#77GROUP PROVISIONS COLLECTIVE PROVISIONS ($m) 77 SPECIFIC PROVISIONS ($m) 1.56% 1.50% 47.6% 45.0% 39.7% 40.6% 1.21% 5,536 0.96% 5,209 299 4,401 191 827 840 782 794 46 43 3,360 337 98 125 115 108 56 177 5,191 4,975 65 684 702 725 686 4,008 3,118 Sep 19 Mar 20 Sep 20 Mar 21 Amortised Loans Fair Value Loans Fair Value Derivatives TOTAL PROVISIONS ($m) 1.18% 0.69% 5,228 1.43% 0.85% 4,142 Sep 19 Total Provisions -CP/CRWA Sep 19 Mar 20 Sep 20 Business Retail Mar 21 Specific Provision Coverage 1.80% 1.72% 1.07% 1.00% 6,376 Mar 20 Sep 20 -Total Provision Coverage to GLAS 6,003 Mar 21 -Total Provision Coverage to CRWA National Australia Bank#78ECL ASSESSMENT ECL SCENARIOS 78 $m Total Provisions for ECL1,2 1H21 (probability 100% Base case 100% Downside weighted) 5,745 4,904 7,330 Total Group Change vs Sep 20 (266) (707) (444) TOTAL PROVISIONS FOR EXPECTED CREDIT LOSSES¹ KEY CONSIDERATIONS • Modest underlying CP release reflecting improved environment and customer positions Modest EA release reflecting upgraded economic assumptions partly offset by changes to scenario weightings including reduced upside weighting (15% to 5%) with base case now capturing part of previously assumed upside Detailed analysis of exposures most at risk driving higher target sector FLAS Limited change in exposures (total and mix) ECONOMIC ASSUMPTIONS Economic assumptions considered in deriving ECL scenarios as at Mar 21 ($m) 4,835 6,011 514 5,745 Base case Downside 314 % 2021 2022 2023 2021 2022 2023 410 GDP change 4,252 4,126 (Year ended 5.3 2.6 2.5 (0.1) (4.7) 2.8 3,275 September) Unemployment (as at 30 6.2 5.5 5.0 7.5 9.5 9.0 1,150 Mar 20 1,245 Sep 20 ■Housing Business Other 1,305 September) Mar 21 House price change (Year ended September) 7.7 6.5 3.5 (5.7) (9.6) (5.4) (1) ECL excludes provisions on fair value loans and derivatives (2) Scenarios, prepared for purposes of informing forward looking provisions, rely on NAB Economics modelling and management judgement National Australia Bank#79TARGET SECTOR FLAS STRENGTHENED COLLECTIVE PROVISION TARGET SECTOR FLAS ($m) 79 1,029 1,250 458 KEY COMMENTS · Additional FLAs vs 2H20 reflect incremental forward looking stress beyond that captured for total portfolio in EA top-up based on granular, bottom-up analysis Top-up to aviation FLA reflects slower recovery profile than previously assumed given continued international border closures Top-up to Australian High Risk Mortgage FLA, reflecting emerging stress on a cohort of expired deferral customers and the potential impacts from the removal of government support measures Movement in other FLAs reflects refresh of underlying inputs 662 372 155 133 232 202 81 • 89 95 180 139 136 134 190 179 91 25 25 25 Mar 20 Sep 20 Mar 21 • ■ Aviation ■Australian Tourism, Hospitality and Entertainment ■Australian Mortgages ■Australian Agri ■Australian Retail Trade ■Commercial Property ■ Other National Australia Bank#80783 793 ECL PROVISIONING BY STAGES LOANS AND ADVANCES BY STAGE¹ ($bn) 771 PROVISIONS BY STAGE² PROVISION COVERAGE BY STAGE3 ($m) (%) 0.77 6,011 5,745 0.72 0.51 7 9 10 1,644 120 1,594 205 3,900 19.0 238 16.8 1,305 17.4 3,897 644 3,879 569 545 2,227 1.90 1.63 1.85 0.34 0.56 0.53 368 470 272 0.05 0.06 0.05 Sep 19 Sep 20 Mar 21 Sep 19 Sep 20 Mar 21 Sep 19 Sep 20 Mar 21 Stage 1 (12 month ECL) ■Stage 2 (Lifetime ECL) ■Stage 3 (Lifetime ECL) 80 • Status Type of provision Stage 1 (12 month ECL) Credit risk not increased significantly since initial recognition; performing Collective Stage 2 (Lifetime ECL) Credit risk increased significantly since initial recognition but not credit impaired Collective Stage 3 (Lifetime ECL) Credit impaired: default no loss Credit impaired: default with loss Collective • Specific Significant increase in credit risk determined by change in credit risk scores for business exposures and change in behavioural scoring outcomes for retail exposures. These rules are not prescribed by accounting standards • No automatic migration from stage 1 to stage 2 as a result of COVID-19 repayment deferrals; migration assumptions included in forward looking adjustments Stage 2 includes majority of forward looking adjustments (1) Notional staging of loans and advances incorporates forward looking stress applied in the ECL model (2) Excludes collective provision on loans at fair value and derivatives which are not allocated to a stage under the ECL model (3) Provision coverage: provisions as a percentage of loans and advances including contingent liabilities and credit-related commitments National Australia Bank#81PROBABILITY OF DEFAULT (PD) ANALYSIS NON RETAIL CORPORATE EAD¹ BY PROBABILITY OF DEFAULT ($bn) 120 100 Investment grade 59% Mar 21 80 60 40 20 ° 11 Sub investment grade 40% Mar 21 Default 1% Mar 21 0<0.03% 0.03<0.11% 0.11<0.55% 0.55<2.00% 2.00<5.01% 5.01<99.99% 100% ■Mar 20 ■Sep 20 Mar 21 AUSTRALIAN AND NEW ZEALAND BUSINESS EXPOSURES PD ≥ 2% 27% 26% 23% 20% 17% 14% 15% 14% 13% 13% 13% 12% 12% 11% Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Mar 20 Sep 20 Mar 21 (1) For internal ratings based portfolios. Excluding Bank and Sovereign exposures. Total $269bn at Mar 21, $266bn at Sep 20, $283bn at Mar 20 81 National Australia Bank#82BUSINESS LENDING CONSIDERATIONS NON RETAIL EAD BY INDUSTRY¹- $520BN Finance & insurance Commercial property 14% Govt & public utilities 11% Agri, forestry & fishing 9% Transport & storage 5% Other inc Health, Education, Community 5% Business & property services 4% Manufacturing 4% Wholesale trade 3% Retail Trade 3% Utilities 3% Construction 2% Accommodation & Hospitality 2% Mining 2% (1) Industry classifications are aligned to those disclosed in the 31 March 2021 Pillar 3 report - Table 4.1D (2) Performing reflects all exposures except those which are 90+ DPD or Impaired 82 Performing² 32% 99.97% 99.57% 100.00% 99.11% 99.33% 99.40% Includes assets supporting the Group's LCR 99.03% 99.46% 99.58% 98.29% 99.99% 98.81% 98.62% 99.58% National Australia Bank#83GROUP AGRICULTURE, FORESTRY & FISHING EXPOSURES GROUP EAD $49.0BN MARCH 2021 Australia 68% New Zealand 32% KEY CONSIDERATIONS • The sector outlook continues to improve amid recent good rainfall and stronger than predicted commodity prices • Asset quality remains sound with 90+ DPD and impaired rate improved over the half 83 AUSTRALIAN AGRICULTURE, FORESTRY & FISHING Diverse Portfolio EAD $33.2bn Mar 21 Other Crop &. Grain 8% Cotton 4% Vegetables 3% Grain 10% Beef 20% Australian Agriculture Asset Quality Australian Agriculture Portfolio Well Secured¹ ($m) 0.49% 0.48% Fully Secured 85% 0.46% 0.43% 0.40% Dairy 5% Forestry & Fishing 3% Services 9%. Mixed 25% Sheep/Beef 7% 120 132 146 153 134 Sheep 3% Other Livestock 2% Poultry 1% Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 90+ DPD & Impaired as % EAD Partially Secured 14% Unsecured 1% (1) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security National Australia Bank#8484 GROUP COMMERCIAL REAL ESTATE¹ GROSS LOANS & ACCEPTANCES ASSET QUALITY Aust New Zealand Total Trend Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 TOTAL CRE (A$bn) 51.6 7.1 58.7 Impaired loans ratio 0.22% 0.25% 0.26% 0.32% 0.30% Increase/(decrease) from 0.4 (0.4) (0.1) Sep 20 (A$bn) % of geographical GLAS 10.5% 8.5% 9.9% Specific Provision Coverage 34.4% 31.9% 32.2% 39.9% 39.2% Change in % from Sep 20 0.2% (0.6%) BALANCES OVER TIME ($bn) 17.1% 11.6% 11.3% 10.2% 9.9% 9.9% 75 61 62 62 62 59 59 10 7 6 6 16 52 55 53 53 45 Sep 09 Sep 13 Sep 16 Sep 19 Investor Developer (1) Measured as balance outstanding as at 31 March 2021 per APRA Commercial Property ARF 230 definitions Sep 20 -Group CRE % of Group GLAS Mar 21 National Australia Bank#85GROUP COMMERCIAL REAL ESTATE¹ BREAKDOWN BY TOTAL GROSS LOANS & ACCEPTANCES ($58.7BN) 85 Geographic breakdown QLD 14% WA VIC 26% 5% SA 5% Other Australia 5% Investor 90% NSW 33% New Zealand 12% Borrower breakdown Retail 28% Tourism & Leisure_ 3% Developer 10% Developer includes $1.1bn for land development and $2.1bn for residential development in Australia (1) Measured as balance outstanding as at 31 March 2021 per APRA Commercial Property ARF 230 definitions Sector breakdown Residential 11% Industrial 17% Other 7% Office 30% -Land 4% National Australia Bank#86RETAIL TRADE! EXPOSURE AT DEFAULT EAD $14.5bn 2.1 3.8 8.6 EAD $14.5bn EAD $14.5bn 2.1 3.7 8.7 6.8 7.7 ■Non-Discretionay ■Discretionary KEY CONSIDERATIONS • ~3% of non retail EAD • Notwithstanding structural problems, the Retail Trade sector performed relatively well during COVID-19, as consumers continued spending. Though some parts of sector have performed better than others • Retail Trade portfolio experience is mixed: ~47% is non- discretionary retail • Personal & Household Goods includes: Pharmacy Retailers (42%), Apparel (14%), Furniture & Homewares (19%) ■B&PB C&IB ■NZ ■B&PB C&IB ■ NZ Sep 20 Mar 21 EAD PORTFOLIO BY SECTOR AND SECURITY2 Personal & Household Goods Food 23% 51% Partially secured 39% • Department store exposure ~$100m 90+ DPD AND GIAS AND AS % OF SECTOR EAD ($m) 1.97% 1.97% 1.71% 1.58% 1.45% 1.06% Motor Vehicles 26% Fully secured 48% Unsecured 13% 295 293 212 229 248 151 Sep 18 Mar 19 Sep 19 90+ DPD & GIAS Mar 20 Sep 20 Mar 21 as % EAD (1) Retail Trade is aligned to Regulatory Industry Classifications. Discretionary / Non-discretionary Retail Trade determined at an individual ANZSIC code level (2) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security 86 National Australia Bank#87TOURISM, HOSPITALITY AND ENTERTAINMENT EXPOSURE AT DEFAULT EAD $14.1bn 1.9 EAD $13.5bn 1.9 6.1 5.5 6.1 ■B&PB C&IB ■NZ 6.1 ■B&PB C&IB ■NZ KEY CONSIDERATIONS ~3% of non retail EAD Industry outlook for Hospitality & Entertainment sectors continues to improve, reflecting growing confidence in COVID-19 tracking and controls. The outlook for the Tourism and Accommodation sectors is less certain for those exposed to international visitors Extent of COVID-19 impacts dependent on location. For B&PB exposures³: • 18% in CBD • 20% in Victoria Sep 20 Mar 21 EAD PORTFOLIO BY SECTOR AND SECURITY2 Pubs, Taverns & Accomodation 44% Bars 16% Others 40% 90+ DPD AND GIAS AND AS % OF SECTOR EAD ($m) Partially secured 21% 1.15% 1.23% 1.13% 0.88% 0.97% 1.07% Fully secured 70% 166 157 153 152 138 121 Unsecured 9% Sep 18 Mar 19 Sep 19 90+ DPD & GIAS Mar 20 Sep 20 as % EAD Mar 21 (1) Tourism, hospitality and entertainment include regulatory industry classification of accommodation and hospitality, plus cultural and recreational services (2) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security (3) Corporate & Institutional Banking exposures have been excluded from location analysis given many involve a range of post codes 87 National Australia Bank#88AIR TRAVEL AND RELATED SERVICES EXPOSURE AT DEFAULT EAD $11.3bn EAD $10.1bn 0.7 10.3 0.7 8.6 0.3 0.8 ■ B&PB ■C&IB ■ NZ ■ B&PB ■ C&IB ■ NZ KEY CONSIDERATIONS ~2% of non retail EAD • Portfolio comprises airlines which are usually national carriers and sovereign owned, airports, lessors and service companies supporting the aviation industry • Ongoing disruption caused by COVID-19 related travel restrictions, with length and severity unknown. However, sovereign support and access to capital markets remain • EAD reduction Sep 20 vs Mar 21 driven by FX movements and reduction in derivative exposures Sep 20 Mar 21 EAD PORTFOLIO BY SECTOR AND SECURITY¹ Aircraft leasing 30% Air Transport 34% 90+ DPD AND GIAS AND AS % OF SECTOR EAD ($m) Service to Air Transport 36% Partially secured 51% 0.46% 0.45% 0.40% 0.43% 0.77% 0.16% 77 Fully secured 43% 49 47 47 48 16 Unsecured 6% Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 190+ DPD & GIAS as % EAD (1) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security 88 National Australia Bank#89GROUP OFFICE, RETAIL, TOURISM & LEISURE COMMERCIAL REAL ESTATE¹ GLA PROFILE Limit utilisation ~86% $35.5bn 1.9 $35.9bn 2.0 16.7 16.3 16.9 ■Tourism & Leisure ■Retail ■ Office 17.6 ■Tourism & Leisure ■Retail ■ Office Sep 20 PORTFOLIO CHARACTERISTICS¹ Geographic breakdown WA 4% Qld 14% SA 7% Mar 21 Portfolio security² New Vic 25% Zealand 11% Fully secured 89% Partially secured 5% NSW 33% Other 6% Unsecured 6% KEY CONSIDERATIONS • Office, Retail and Tourism & Leisure (T&L) viewed as most impacted by COVID-19 across Group CRE portfolio • 90+ DPD and impaired assets collectively represent 0.24% ($85m) of GLA, down from 0.26% at Sep 20 Borrower breakdown: Investor 95%, Developer 5% • Office faces more medium term uncertainties, dependent on the extent and timing of return to work and asset-specific lease expiries • ~51% of Australian Office balances are CBD based, ~89% relating to Corporate & Institutional exposures Retail assets with a stronger bias towards non-discretionary tenants remain resilient and sought after. T&L to benefit from recently announced government stimulus • Retail and T&L assets located in CBD locations continue to be most impacted, as CBD office occupancy levels remain below pre- pandemic levels and international borders remain shut. The end of JobKeeper presents an additional headwind • 6% of Australian Retail balances are CBD based, ~51% relating to Corporate & Institutional exposures • 27% of Australian T&L balances are CBD based 89 (1) Measured as balance outstanding as at 31 March 2021 per APRA Commercial Property ARF230 definitions (2) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security. Unsecured proportion represents Institutional exposures that are weighted towards listed A-REITs and wholesale funds which are lowly geared and exhibit strong debt servicing. National Australia Bank#90ADDITIONAL INFORMATION CAPITAL & FUNDING National Australia Bank#91CRWA AND SENSITIVITY CREDIT RWA ($bn) 91 354.0 I I I I I 2.3 I (1.8) 4.1 I I I I I I I I I Credit quality & portfolio mix -$6.0bn 9.0 (10.2) (5.0) 2.0 (3.6) (2.6) 348.2 Sep 20 Volume Model and SME Overlay Non retail Methdology downgrades Non retail upgrades Other non retail Retail Derivatives Translation and FX Repurchase Agreements Mar 21 National Australia Bank#92GROUP BASEL III CAPITAL RATIOS 19.66% 17.97% 16.33% 15.80% 14.35% 22.25% 19.07% 17.01% 23.98% 17.90% 16.62% 14.61% 13.20% 14.01% 11.96% 12.37% 11.47% 10.39% Mar 20 APRA Common Equity Tier 1 ratios APRA to Internationally Comparable CET1 Ratio Reconciliation Sep 20 Mar 21 APRA Tier 1 ratios ■APRA Total Capital ratios Equivalent Internationally Comparable ratios¹ CET1 Group CET1 ratio under APRA 12.37% APRA's Basel capital adequacy standards require a 100% deduction from common equity for deferred tax assets, investments in non consolidated subsidiaries and equity investments. Under Basel Committee on Banking Supervision (BCBS) such items are concessionally risk weighted if they fall below prescribed thresholds Mortgages - reduction in loss given default floor from 20% to 15% and adjustment for correlation factor +79bps +184bps Interest rate risk in the banking book (IRRBB) - removal of IRRBB risk weighted assets from Pillar 1 capital requirements Other adjustments including corporate lending adjustments and treatment of specialised lending Group Internationally Comparable CET1 (1) Internationally Comparable CET1 ratios align with the APRA study entitled "International capital comparison study" released on 13 July 2015 +32bps +169bps 17.01% 92 92 National Australia Bank#93KEY REGULATORY CHANGES IMPACTING CAPITAL AND FUNDING 93 Change Capital Adequacy Measurement of Capital Credit Risk Operational Risk Market Risk Interest Rate Risk in the Banking Book Public Disclosures Loss Absorbing Capacity Recovery and Resolution 2020 1H21 Consult 2H21 Finalise 2022 2023 Implementation 2024 Consult Finalise Implementation Consult Finalise Implementation Implementation Consult Implementation Finalise Implementation Consult Finalise Implementation Implementation Consultation and implementation date not yet advised RBNZ UPDATE APRA POLICY PRIORITIES APRA's consultation on 'a more flexible and resilient capital framework for ADIs' released in December 2020 • Follows the 2017 APRA benchmark of 'unquestionably strong' capital ratios. • Includes revisions to the capital adequacy framework . Overall level of capital in the banking system is not proposed to change APRA's active 2021 policy development also includes proposed consultations for Interest Rate Risk, Remuneration and Public disclosure • The RBNZ has eased restrictions on dividend payments, allowing banks to pay up to 50% of their earnings as dividends to shareholders The 50% restriction will remain in place until 1 July 2022, at which point the RBNZ intends to remove the restrictions entirely, subject to economic conditions The RBNZ has also lifted the restriction on redeeming non-CET1 capital instruments National Australia Bank#94FUNDING PROFILE GROUP STABLE FUNDING INDEX (SFI)' 94 101% 98% 90% 91% 93% 93% 86% 23% 20% 20% 22% 24% 23% 20% 78% 78% 66% 70% 69% 69% 70% Sep 12 Sep 14 Sep 16 Sep 18 Sep 19 Sep 20 Mar 21 ■Customer Funding Index ■Term Funding Index DEPOSIT GROWTH² ($bn) Business & Private Banking Personal Banking Corporate & Institutional Banking -4.1 New Zealand Banking Corporate Functions & Other -2.0 1.4 1.9 6 months to 31 March 2021 10.4 (1) The Group Stable Funding Index (SFI) is the sum of the Customer Funding Index (CFI) and Term Funding Index (TFI). CFI is measured as customer deposits (excluding certain short dated institutional deposits used to fund liquid assets) as a percentage of core assets. TFI is measured as term wholesale funding (with remaining maturity to first call date greater than 12 months), including Term Funding Facility (TFF) and RBNZ funding facility drawdowns as a percentage of the core assets (2) Includes mortgage offset accounts National Australia Bank#95LOSS ABSORBING CAPACITY LOSS ABSORBING CAPACITY Based on the Group's RWA and Total Capital position as at 31 March 2021, the incremental Group Total Capital requirement prior to January 2024 is approximately $4.6bn. • $2bn of surplus provisions are eligible for inclusion in Tier 2 Capital. • $2.6bn of NAB's existing Tier 2 Capital has optional redemption dates prior to January 20241. Group RWA Mar-21 ($bn) 417.6 Tier 2 Requirement (5% by Jan-24) Existing Tier 2 Capital (3.89%) Current Shortfall 2 20.9 16.3 4.6 APRA CHANGES TO MAJOR BANKS' CAPITAL STRUCTURES³ CET1 buffer/ surplus ~4.4% CCB6 3.5% CET1 minimum requirement 4.5% Total Capital 17.9% Total Capital 17.0% T2, 3.89% AT1, 1.64% CET1, 12.37% NAB Mar 2021 T2, 5.0% AT1, 1.5% CET1 Surplus 4,5, 2.5% CCB6, 3.5% CET1, 4.5% Jan 2024 LAC Requirements NAB TIER 2 PORTFOLIO BY CURRENCY AND FORMAT NAB TIER 2 MATURITIES (TO FIRST CALL) JPY 2% HKD 1% SGD 3% CAD 7% USD 40% AUD 46% (1) Subject to the prior written approval of APRA Bullet 32% Callable 68% ($bn) WAM 7.7 yrs (RTM) 8.1 0.1 1.4 1.1 FY21 1.0 1.0 1.3 FY22 FY23 FY24 FY25 FY26 >FY26 (2) Ahead of January 2024 APRA will consider "feasible alternative methods" for raising an additional 1% to 2% of RWA in loss-absorbing capacity, in consultation with industry and other interested stakeholders (3) APRA's proposed revisions to Unquestionably Strong framework (released December 2020) not reflected (4) Capital surplus of 2.5% is generally higher than the normal level for D-SIBS, as a result of the 'unquestionably strong' capital benchmarks 95 (5) Excludes any Pillar 2 requirements and additional 1-2% RWA requirement through "feasible alternative methods" (6) CCB is the Capital Conservation Buffer National Australia Bank#96ASSET FUNDING FUNDED BALANCE SHEET¹ $782bn Liquid Assets4, 22% Other Short Term Assets 5, 2% $782bn Short Term Wholesale, 11% Term Wholesale Funding <12 Months, 5% Other Deposits³, 5% Business and Other Lending, 32% Stable Customer Deposits², 56% Housing Lending, 44% Term Funding Facility, 2% Term Wholesale Funding >12 Months, 13% Assets Equity, 8% Funding SOURCE AND USE OF FUNDS ($bn) Source of funds 8 2 11 0 8 I I 16 Use of funds I I 8 I I 4 Customer Deposits Equity Short Term Liquid Assets Wholesale I I Funding Issuance 6 ¡ Maturities 6 Term Term Term Wholesale Wholesale Wholesale FX and Other 7 Lending T I I 6 months to 31 March 2021 96 (1) Excludes repurchase agreements, trading and hedging derivatives, and any accruals, receivables and payables that do not provide net funding. (2) Includes operational deposits, non-financial corporate deposits and retail / SME deposits. Excludes certain offshore deposits. (3) Includes non-operational financial institution deposits and certain offshore deposits. (4) Market value of marketable securities including HQLA, non-HQLA securities and commodities. (5) Trade finance loans are included in other short-term assets, instead of business and other lending. (6) Includes Additional Tier 1 and RBNZ funding facility drawdowns. (7) Includes the net movement of other assets and other liabilities. National Australia Bank#9797 LIQUIDITY LIQUIDITY COVERAGE RATIO (QUARTERLY AVERAGE) ($bn) 126% LCR 136% LCR 139% LCR 136% LCR 126 137 88 98 73 47 55 54 114 143 135 112 Sep 19 Mar 20 ■Net Cash Outflows Sep 20 ■ALA¹ Mar 21 ■ HQLA LCR MOVEMENT % Ave LCR Sep 20 139 HQLA 8 13 6--2 ALA-CLF Reduction ALA-TFF Drawn NCO Customer Deposits & Wholesale Funding Other 2 10 Ave LCR Mar 21 NET STABLE FUNDING RATIO COMPOSITION Group NSFR 122% as at 31 March 2021 $546bn Wholesale Funding & Other Non-Financial Corporate Deposits $448bn Liquids and Other Assets Retail/SME Deposits Other Loans Capital Available Stable Funding Residential Mortgages <35% RWA Required Stable Funding NET STABLE FUNDING RATIO MOVEMENT % 136 127 Sep 20 CLF Reduction (3.7) 0.0 1.6 (4.1) 0.6 (0.7) 1.3 Loans Deposits Wholesale Funding Capital Liquids (1) Committed Liquidity Facility (CLF) and Term Funding Facility (TFF) value used in LCR calculation is the undrawn portion of the facility. NAB's approved CLF was reduced to $31bn from February 2021, down from $55.1bn in 2020 and $55.9bn for 2019. The average amount of undrawn TFF included in the LCR was $12bn for the March Quarter (2) Other includes reduction in contingent funding obligations as a result of updates to documentation relating to NAB's secured funding programmes Derivatives & Other Mar 21 National Australia Bank 122#98LIQUIDITY CONSIDERATIONS INCREASED SYSTEM LIQUIDITY ($bn) • Deposits increasing due to central bank and government response to COVID-19 260 AUSTRALIAN CORE FUNDING GAP¹ ப APRA Methodology Change² 240 • Term Funding Facility provides a significant stable funding source 220 • Low rate environment encouraging migration from term deposits to at-call deposits 200 180 . • CLF reduced from $55.1bn in 2020 to $31.0bn for 2021 Implications for NAB include: 160 140 • Reduced wholesale funding requirement . Liquids drag on margins 120 Sep 17 Mar 18 Sep 18 NAB Mar 19 -Peer 1 Sep 19 Peer 2 Mar 20 Sep 20 -Peer 3 Mar 21 TFF DRAWDOWNS VS AVAILABLE ALLOWANCE³ 104 69 SYSTEM EXCHANGE SETTLEMENT ACCOUNT (ESA) BALANCES4 ($bn) 200 92 92 150 123 100 68 70 78 0 50 12 14 Jun 20 Sep 20 14 Dec 20 14 Mar 21 Policy response to COVID-19 commenced Mar-20 ■NAB Drawdown ■Industry TFF Drawdowns (ex NAB) ■Industry TFF Available to be Drawn (2) (3) Sep 19 (1) Australian core funding gap = Gross loans and advances plus Acceptances less Total deposits (excluding financial institution deposits and certificates of deposit) APRA Monthly Banking Statistics are used from September 2017 to March 2019. April 2019 onwards is prepared using APRA Monthly Authorised Deposit-taking Institution Statistics. Statistics as at March 2021 RBA and NAB data 0 Mar 19 Mar 20 Sep 20 Mar 21 (4) 98 ESAs are the means by which providers of payments services settle obligations that have accrued in the clearing process, operated through the Reserve Bank Information and Transfer System (RITS). Effective 4 November 2020, the interest rate on surplus ESA balances set by the RBA is 0.00%, with any shortfall in ESA balances attracting 25bps above the cash rate target. RBA data National Australia Bank#99TERM WHOLESALE FUNDING PROFILE HISTORIC TERM WHOLESALE FUNDING ISSUANCE¹ ($bn) 4.9 yrs 6.8 yrs 5.4 12.3 11.3 yrs yrs yrs 17 16 10 | 12 11 6 14 10 10 5 2 1H19 2H19 1H20 Tenor 2,3,4 ■Secured ■Senior and Sub Debt RBA Term Funding Facility 2H20 CRBNZ Funding Facilities 1H21 6 TERM FUNDING MATURITY PROFILE³ WAM 3.3 yrs4 5 ■Secured Senior and Sub Debt RBA Term Funding Facility [1RBNZ Funding Facilities 5,6 40 14 27 15 22 21 12 3 H2FY21 5 FY22 5 FY23 29 21 10 23 16 4 FY24 6 4 FY25 5 Beyond (1) Includes senior unsecured, secured (covered bonds and securitisation) and subordinated debt with an original term to maturity or call date of greater than 12 months, excludes Additional Tier 1 instruments (2) Weighted average maturity (years) of funding issuance with an original term to maturity greater than 12 months (3) Weighted average maturity and maturity profile excludes RMBS (4) Weighted average maturity excludes Additional Tier 1, Residential Mortgage Backed Securities, RBA Term Funding Facility and RBNZ funding facilities (5) Drawdowns treated at contractual maturity 99 (6) Includes RBNZ's Term Lending Facility (TLF) and Funding for Lending Programme (FLP) National Australia Bank#100DIVERSIFIED AND FLEXIBLE TERM WHOLESALE FUNDING PORTFOLIO 1H21 ISSUANCE BY PRODUCT TYPE 1H21 ISSUANCE BY CURRENCY AUD 33% Subordinated Public 75% OUTSTANDING ISSUANCE BY PRODUCT TYPE² RMBS 2% Covered 20% Subordinated 11% 1 Senior Public Offshore 25% OUTSTANDING ISSUANCE BY CURRENCY² JPY 3% Senior 67% GBP 4% (1) Issued by BNZ (2) Excludes Additional Tier 1, RBA Term Funding Facility and RBNZ funding facilities 100 Other 8%. USD 30% EUR 26% USD 67% AUD 29% National Australia Bank#101FUNDING COSTS INDICATIVE TERM WHOLESALE FUNDING ISSUANCE COSTS¹ 400 TERM DEPOSIT PORTFOLIO COSTS² (bps) 80 300 200 100 0 Sep 18 Mar 19 3 yr senior Sep 19 5 yr senior Mar 20 10yr senior Sep 20 Mar 21 10NC5 Tier 2 70 60 60 50 50 40 40 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 DOMESTIC SHORT TERM WHOLESALE FUNDING COSTS³ (bps) CASH RATES (bps) 0.75 60 50 40 0.5 30 20 0.25 10 0 -10 0 Mar 19 Sep 19 Mar 20 3M Bills-OIS Spread Sep 20 -90 Day Moving Average Mar 21 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 RBA Target Cash Rate -Interbank Overnight Cash Rate (IOCR) (1) Indicative Major Bank Wholesale Tier 2 Subordinated and Senior Unsecured Funding rates over 3m BBSW using a blend of multi-currency inputs (3 years, 5 years, 10-year non-call 5-year and 10 years) (2) Management data. Total deposit portfolio cost over relevant market reference rate. Australia only (3) Spread between 3 month AUD Bank Bill Swap Rate and Overnight Index Swaps (OIS). Source: Bloomberg 101 National Australia Bank#102CAPITAL & DEPOSIT HEDGES REPLICATING PORTFOLIO Capital Low rate deposits CAPITAL & DEPOSIT HEDGES - REPLICATING PORTFOLIOS¹ 3.0 Replicating portfolio 2.5 31 Mar 21 balance Avg investment term 2.0 $41bn 2 years 1.5 $57bn 5 years 1.0 Ave return of replicating portfolio 0.5 FY20 1.57% 0.95% 1H21 0.0 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Portfolio Rate 3m BBSW FY18 FY19 2.21% 2.12% 2 YEAR AND 5 YEAR SWAP RATES³ 3 SPREAD BETWEEN AVERAGE SWAP RATE VS AVERAGE PORTFOLIO RATE² 2.5 2 (bps) 140 120 115 104 1.5 155 99 100 1 0.5 80 60 40 0 20 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 2° -2 Year -5 Year 2H19 1H20 (1) Blended replicating portfolio earnings rate (Australia only). Replicating portfolio includes capital and non-interest bearing deposits (incl. lower tiers in Retirement account) (2) Average rates during the reporting period (3) Source: Bloomberg 102 78 2H20 1H21 National Australia Bank#103ADDITIONAL INFORMATION ECONOMICS National Australia Bank#104AUSTRALIA AND NZ KEY ECONOMIC INDICATORS AUSTRALIAN ECONOMIC INDICATORS (%)¹ NZ ECONOMIC INDICATORS (%)¹ CY19 CY20 CY21(f) CY22(f) CY23(f) CY19 CY20 CY21(f) CY22(f) CY23(f) GDP growth² 2.3 -1.1 3.7 1.7 2.6 GDP growth² 1.7 -0.9 2.3 4.0 1.6 Unemployment³ 5.2 6.7 5.1 4.7 4.4 Unemployment³ 4.1 4.9 4.6 3.9 4.6 Core Inflation4 Cash rate target³ 1.4 1.3 1.4 1.8 2.0 Inflation4 0.75 0.10 0.10 0.10 0.10 Cash rate (OCR)³ AUSTRALIAN SYSTEM GROWTH (%)5 1.9 1.4 2.9 1.6 2.5 1.0 0.25 0.25 1.00 2.00 NZ SYSTEM GROWTH (%) 5 FY19 FY20 FY21(f) FY22(f) FY23(f) FY19 FY20 FY21(f) FY22(f) FY23(f) Housing 3.0 3.3 5.2 4.4 5.0 Housing 6.5 6.8 11.6 3.5 3.6 Personal -4.3 -12.9 -3.1 0.0 1.5 Personal 0.1 -11.7 -2.9 3.6 3.7 Business 3.3 1.9 0.6 4.2 4.5 Business 4.8 -1.4 0.3 4.0 5.7 Total lending 2.7 1.9 3.2 4.1 4.7 Total lending 5.6 3.0 6.9 3.7 4.3 System deposits 3.8 11.7 7.6 5.6 3.4 Household retail deposits 5.1 9.4 5.8 4.6 4.3 (2) (3) (1) Sources: ABS, Econdata DX, RBA, RBNZ, Stats NZ, NAB December quarter on December quarter of previous year As at December quarter (4) (5) 104 December quarter on December quarter of previous year. For Australia, average of trimmed mean and weighted median indices Source: RBA, RBNZ, NAB. Bank fiscal year-ended (September). NZ business credit includes credit to Agriculture National Australia Bank#105ACTIVITY CONTINUES TO RECOVER FROM THE IMPACT OF COVID-19 Economic activity and the labour market have rebounded relatively quickly from the COVID-19 related fall in June 2020. GDP ended the year 1% lower, and is now expected to return to pre-COVID levels by Q1 2021. Relatively good health outcomes alongside significant support have aided the rebound - though intermittent localised shutdowns and a closed international border have led to elevated uncertainty. • While in aggregate the recovery has been strong, areas of stress remain, particularly in sectors which see impact from travel restrictions or changes to spending patterns. Interest rates remain low but some fiscal support will wind back. Offsetting some of the pull-back in support to households will be the savings buffers built up with earlier support. INCOMES HAVE SEEN SIGNIFICANT POLICY SUPPORT² (%) GDP ENDED THE YEAR 1% LOWER¹ (Ppt) 32101234 GDP (Ppt) Consumption Dwelling Investment Non-mining Investment Mining Investment Public Demand INCREASED SAVINGS HAVE BUILT A BUFFER³ Exports Imports -1 -2 -3 -4 3210T234 (%) 15 15 25 Net Saving Ratio Gross Saving Ratio 20 10 10 15 5 5 10 0 0 имит 5 -5 -5 0 Non-labour income contribution Income tax Compensation of Employees Other income payable -10 -10 -5 2006 2009 2012 2015 2018 2021 1989 1993 1997 2001 2005 2009 2013 2017 2021 Source: ABS, NAB. Data shows year-ended contributions to December quarter 2020 (2) Source: ABS, NAB. Year-ended growth. Data to December quarter 2020 (3) Source: ABS, NAB. Data to December quarter 2020 105 National Australia Bank#106THE LABOUR MARKET HAS RECOVERED AT A RELATIVELY QUICK PACE UNEMPLOYMENT HAS RECOVERED QUICKLY¹ UNEMPLOYMENT HAS FALLEN ACROSS STATES¹ (%) 20 15 10 5 0 -Unemployment Rate -Underutilisation Rate 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 HOURS WORKED HAVE REBOUNDED ACROSS STATES² (Index) 105 100 9 (%) 8 7 6 5 4 3 NSW - -VIC ―QLD -SA-WA TAS Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 WAGE GROWTH IS SOFT3 3.5 3.0 ли muy Forecast (%) NSW VIC ⚫QLD SA WA TAS 4.5 4.0 2.5 95 95 2.0 Quarterly -Year-ended 1.5 90 90 1.0 0.5 85 0.0 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 1997 2000 2003 2006 2009 2012 2015 2018 2021 Source: ABS. Data to March 2021 (2) Source: ABS, NAB. February 2020 = 100, data to March 2021 (3) Source: ABS. Data to December quarter 2020, NAB forecasts thereafter 106 National Australia Bank#107THE HOUSING MARKET HAS STRENGTHENED HOUSE PRICE GROWTH HAS BEEN STRONG¹ (%, 6MEA) 25 15 2505 10 O -5 -10 -15 -Sydney Melbourne Brisbane Perth AN 2013 2014 2015 2016 2017 2018 DWELLING INVESTMENT HAS PICKED UP³ RENTS GROWTH CONTINUES TO BE WEAK² (%) 10 5 ⚫Sydney -5 Brisbane -Melbourne -Perth -10 2019 2020 2021 2005 2007 2009 2011 2013 2015 2017 2019 2021 POPULATION GROWTH IS SLOWING4 ($bn) -NSW VIC 10 QLD SA WA TAS 8 6 4 2 (%) 2.0 1.5 10 1.0 0.5 0.0 0 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: CoreLogic. 6-month-ended-annualised growth. Data to 30 April 2021 (2) Source: ABS. Year-ended growth in CPI rents. Data to March quarter 2021 (3) Source: ABS. Chain volume measure (reference year 2017-18) (4) Source: ABS. Year-ended growth. Data to Q3 2020 National Australia Bank 107#108SIGNIFICANT POLICY SUPPORT DURING THE PANDEMIC LARGE BUDGET DEFICITS EXPECTED IN THE NEAR TERM¹ (%) ($B) 0 0 Forward Estimates GOVERNMENT DEBT AT A LOW STARTING POINT2 Japan Italy United States -3 -6 France Canada -50 United Kingdom India -100 $ Levels (RHS) % GDP (LHS) -150 Germany Malaysia China Australia South Korea -12 -200 Sweden New Zealand Indonesia -15 -250 2003-04 2006-07 2009-10 2012-13 2015-16 2018-19 2021-22 0 THE CASH RATE REMAINS LOW³ (%) 2.0 Cash Rate Target -3-year AGS 10-year AGS 1.5 1.0 0.5 50 50 100 150 200 (%) RBA HAS CONTINUED UNCONVENTIONAL POLICY4 -Overnight Cash Rate -5-year AGS ($bn) 400 равить 300 200 100 when 0.0 0 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 2007 2009 2011 2013 2015 2017 2019 2021 Source: Commonwealth Treasury. MYEFO Estimates (2) 234 Source: IMF. Data are for 2019 shown as a share of each country's GDP (3) Source: Macrobond. Data to 28 April 2021 (4) Source: RBA, NAB. Data to 26 April 2021. Total Assets on the RBA's Balance Sheet 108 National Australia Bank#109GLOBAL RECOVERY UNDERWAY CHINA'S ECONOMY BACK ON TRACK BY END 2020¹ (% yoy) 30 China total GDP and selected sectors 25 20 15 10 5 0 -5 -10 -15 Manufacturing and construction -Services BROADER GLOBAL RECOVERY CONTINUES BUT NOT SMOOTHLY DUE TO FURTHER COVID WAVES¹ Major advanced economy GDP (Q4 2019 = 100) 100 95 90 90 85 80 Canada GDP USA - Euro-zone Japan 75 Q1 2019 Q1 2021 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 2015 Q1 2017 YIELDS UP AS VACCINE ROLL OUT AND US FISCAL STIMULUS BOOST GROWTH & INFLATION EXPECTATIONS² (%) 2.5 10yr government bond yields 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 Oct-19 Apr-20 (1) Source: Refinitiv; Commodity price data to 30 April 2021 Source: Bloomberg; data to 30 April 2021 (3) Source: Econdata DX 109 Q4 2020 UK Q1 2021 COMMODITY PRICES HAVE RISEN SUPPORTED BY RAPID CHINA RECOVERY AND IMPROVED OUTLOOK³ RBA index of commodity prices (USD) 180 160 US 140 U.K. 120 100 (Index) 80 Bulks Japan All items Base metals Euro-zone 60 Oct-20 Apr-21 Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21 National Australia Bank#110NEW ZEALAND NZ GDP RECOVERY RELATIVELY RAPID BUT Q420 WEAK AND LABOUR MARKET RECOVERY SLOW¹ ($NZ billion, chain prices) 70 NZ GDP AGGREGATE MEASURES HIDE CHANGES - POPN GROWTH WELL DOWN AND INTERNATIONAL TOURISM DEPRESSED² (% change on previous qtr) ('000s) Short term movements 66 62 58 54 50 50 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 DAIRY FARM VIABILITY 2012 2013 2014 2015 (%) 6.0 Unemployment rate 1.0 NZ resident population 700 Arrivals 5.0 0.8 4.0 3.0 0.4 2.0 0.2 1.0 0.6 л 600 500 400 Departures 300 200 100 0.0 0.0 Dec-18 Dec-19 Dec-20 0 Dec-18 Dec-19 Dec-20 Dec-18 Sep-19 Jun-20 Mar-21 2016 2017 2018 HOUSING MARKET VERY STRONG; GOVT RESPONDING BY SEEKING TO CURB HOUSE PRICE GROWTH? (Index) (yoy%) 7.65 7.19 4000 House prices Dwelling sales transacted 3500 Auckland 5.95 3000 5.85 2500 2000 National ex 1500 Auckland 1000 2019 5 2020³ 3 4 500 ៦៦៦ន់ “ ៩៖ ខ 8 -20 -40 -60 -80 2021 0 -100 Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar 6 13 15 17 19 21 13 15 17 19 21 Mid Point of Fonterra milk price forecast Assessed average cost of production (per kg) 6 (1) Source: Refinitiv, Statistics NZ Source: Econdata DX, NAB 2020 figure includes Milk Price of $7.14 and Dividend of $0.05 2021 figure includes Milk Price of $7.60 and Dividend of $0.05 (2) (3) (4) (5) Source: Fonterra (milk price) 110 (6) Source: Dairy NZ (Forecast cost of production) (7) Source: Refinitiv, REINZ National Australia Bank#111OTHER INFORMATION National Australia Bank#112NAB VENTURES AND INNOVATION NAB Ventures is NAB's venture capital arm within the Strategy and Innovation division that makes investments to promote strategic priorities • • Accelerates access to new innovative technology, intellectual property and business models, enhance insight and connectivity with market disruptors and reinforce NAB's innovation capabilities for our customers Pursues partnership and integration initiatives with our investment companies, including co-developing customer propositions and enhancing our foundational capabilities, in order to create value for NAB and realise the strategic rationale of each investment 112 Help customers navigate the full 89 home ownership journey hometime amitree A ACTIVEPIPE ATHENA Home Ownership Help individuals build wealth and manage cashflow Empowered Inves Foundational Protect customers BioCatch digital shadows_ bugcrowd Assist customers DATA REPUBLIC BASIQ Cashless World Capabilities Connected Business lighter capital #pollinate Slyp Provide a "connected" experience for small and medium businesses Edstart veem Help customers move to easier, faster, richer payments National Australia Bank#113INVESTMENT SPEND & CAPITALISED SOFTWARE INVESTMENT SPEND - OPEX AND CAPEX ($m) 915 696 655 654 56% 510 46% 47% 39% 39% 54% 44% 53% 61% 61% Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 ■ Opex ■Capex CAPITALISED SOFTWARE - BALANCE AND AMORTISATION PROFILE ($m) 113 1,810 1,955 1,922 Spot implied useful life of software reducing – now 4.3 years¹ Capitalised Software balance 204 138 Amortisation charge 1H20 2H20 1H21 (1) Calculated using the capitalised software balance for the period divided by the annualised 1H21 amortisation charge 223 National Australia Bank#114GROUP CASH EARNINGS RECONCILIATION TO STATUTORY NET PROFIT • NAB uses cash earnings (rather than statutory net profit attributable to owners of NAB) for its internal management reporting purposes and considers it a better reflection of the Group's underlying performance. Accordingly, information is presented on a cash earnings basis unless otherwise stated. . Cash earnings is not a statutory financial measure and is not presented in accordance with Australian Accounting Standards nor audited or reviewed in accordance with Australian Auditing Standards. Cash earnings is calculated by excluding discontinued operations and certain other items which are included within the statutory net profit attributable to owners of NAB. These non-cash earning items, and a reconciliation to statutory net profit attributable to owners of NAB, are presented in the table below. • The definition of cash earnings is set out on page 2 of the 2021 Half Year Results Announcement, and a discussion of non-cash earnings items and a full reconciliation of the cash earnings to statutory net profit attributable to owners of NAB is set out on pages 91 - 93 of the 2021 Half Year Results Announcement. The Group's financial statements, prepared in accordance with the Corporations Act 2001 (Cth) and Australian Accounting Standards, and reviewed by the auditors in accordance with Australian Auditing Standards, are set out in the 2021 Half Year Results Announcement. 1H21 ($m) 1H21 v 2H20 1H21 v 1H20 3,343 67.7% 94.8% Cash earnings Non-cash earnings items (after tax) Distributions Fair value and hedge ineffectiveness Net profit from continuing operations 13 (23.5%) (40.9%) (126) Large Large 3,230 65% Large Net loss attributable to owners of NAB from discontinued operations (22) (96.9%) (90.4%) Statutory net profit attributable to owners of NAB 3,208 Large Large 114 National Australia Bank#115ABBREVIATIONS CET1 Common Equity Tier 1 Capital LCR Liquidity Coverage Ratio CIC Credit impairment charge LGD Loss given default CLF Committed Liquidity Facility LVR Loan to Value Ratio CP Collective Provision MTM Mark to market CTI Cost to income ratio NBI Non Bearing Interest DPD Days Past Due NCO Net Cash Outflow NII Net Interest Income DRP Dividend Reinvestment Plan NILS No Interest Loan Scheme EAD Exposure at Default NPS Net Promoter Score EA Economic Adjustment NSFR ECL Expected Credit Losses Net Stable Funding Ratio EOFY End Of Financial Year OIS Overnight Index Swap EPS Earnings Per Share PD FTEs Full-time Equivalent Employees RMBS GHG Greenhouse Gas ROE Other Operating Income Probability of Default Residential Mortgage Backed Securities Return on Equity GIAS Gross Impaired Assets RWAs Risk-weighted assets GLAS Gross Loans and Acceptances SFI Stable Funding Index HQLA High Quality Liquid Assets SME Small and Medium Enterprise IRB Internal Ratings Based approach TFF Term Funding Facility 115 National Australia Bank#116DISCLAIMER The material in this presentation is general background information about the NAB Group current at the date of the presentation on 6 May 2021. The information is given in summary form and does not purport to be complete. It is intended to be read by a professional analyst audience in conjunction with the verbal presentation and the 2021 Half Year Results Announcement (available at www.nab.com.au). It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. No representation is made as to the accuracy, completeness or reliability of the presentation. This presentation contains statements that are, or may be deemed to be, forward looking statements. These forward looking statements may be identified by the use of forward looking terminology, including the terms "believe", "estimate", "plan", "project", "anticipate", "expect", "target", "intend", "likely", "may", "will", "could" or "should" or, in each case, their negative or other variations or other similar expressions, or by discussions of strategy, plans, objectives, targets, goals, future events or intentions. Indications of, and guidance on, future earnings and financial position and performance are also forward looking statements. You are cautioned not to place undue reliance on such forward looking statements. Such forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, which may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. There are a number of other important factors that could cause actual results to differ materially from those projected in such statements, including (without limitation) a significant change in the Group's financial performance or operating environment; a material change to law or regulation or changes to regulatory policy or interpretation; and risks and uncertainties associated with the ongoing impacts of the COVID-19 pandemic, the Australian and global economic environment and capital market conditions. Further information is contained in the Group's Luxembourg Transparency Law disclosures released to the ASX on 6 May 2021 and the Group's Annual Financial Report for the 2020 financial year, which is available at www.nab.com.au. For further information visit www.nab.com.au or contact: Sally Mihell Executive, Investor Relations Mobile | +61 (0) 436 857 669 Natalie Coombe Director, Investor Relations Mark Alexander General Manager, Corporate Communications Mobile | +61 (0) 477 327 540 Mobile | +61 (0) 412 171 447 116 National Australia Bank