#1FULL YEAR RESULTS 2020 Investor Presentation 5 November 2020 Ross McEwan Chief Executive Officer Gary Lennon Chief Financial Officer © 2020 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 National Australia Bank#2NAB 2020 FULL 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 120 for legal disclaimer. Financial information in this presentation is based on cash earnings, which is not a statutory financial measure. Refer to page 118 for definition of cash earnings and reconciliation to statutory net profit. Overview FY20 Financials Additional Information Divisional Performances NAB And Our Community Australian Customer Experience Australian Business Lending Australian Housing Lending Other Australian Products New Zealand Banking Group Asset Quality Capital & Funding Economics Other Information 15 34 34 40 48 56 61 68 71 76 93 104 114 National Australia Bank#3OVERVIEW ROSS MCEWAN Group Chief Executive Officer National Australia Bank#44 KEY MESSAGES Financial results reflect challenging environment Balance sheet strength. Keep the bank safe Supporting customers and colleagues Strategic ambition is clear. Good progress made on execution Focused now on building momentum in our core businesses National Australia Bank#5UNDERLYING RESULTS REFLECT CHALLENGING ENVIRONMENT LO 5 METRIC FY20 FY19 FY20 VS FY19 Statutory net profit ($m) 2,559 4,798 (46.7%) CONTINUING OPERATIONS (EX LARGE NOTABLE ITEMS) Cash earnings2 ($m) 4,733 6,389 (25.9%) Underlying profit ($m) 9,640 10,056 (4.1%) Cash ROE Diluted Cash EPS (cents) Dividend (cents) (1) For a full breakdown of large notable items refer to page 5 of the 2020 Results Announcement (2) Refer to page 118 for definition of cash earnings and reconciliation to statutory net profit 8.3% 12.4% (410 bps) 146.9 219.7 (33.1%) 60 166 (63.9%) National Australia Bank#600 6 BALANCE SHEET STRENGTH CAPITAL INCLUDES SUBSTANTIAL BUFFER CET1 Ratio (%) 11.82 FUNDING & LIQUIDITY REMAINS STRONG + 35bps MLC Wealth +98bps capital raising Metric (%) Mar 19 Sep 19 Mar 20 Sep 20 LCR (quarterly average) 130 126 136 139 11.47 10.20 10.40 10.38 10.39 NSFR Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 STRENGTHENED PROVISIONING COVERAGE (%) 1.15 0.94 0.54 Mar 19 1.18 0.96 0.56 Sep 19 1.43 1.21 Mar 20 0.72 1.80 1.56 • 0.93 112 113 116 127 COMMENTS . • $3bn institutional placement and $1.25bn share purchase plan successfully completed in 2H20 Sale of MLC Wealth expected to provide additional 35bps of CET1 on completion¹ Shareholder dividends of 60cps declared in FY20 Funding and Liquidity metrics remain well above minimum thresholds Further increased provisioning coverage in 2H20 including top up to forward looking provisions - CP/CRWA of 1.56% and CP/GLAS of 0.93% Sep 20 • ■Total provisions as % of Credit Risk Weighted Assets Collective Provisions as % of Credit Risk Weighted Assets Collective Provisions as % of GLAS (1) Completion remains subject to satisfaction of certain conditions, including regulatory approvals National Australia Bank#7SUPPORTING CUSTOMERS AND COLLEAGUES OUR CUSTOMERS • Numerous COVID-19 support initiatives Reduced minimum monthly repayments on cards and waived late payment fees • Waived certain merchant fees with extended support provided to Victorian customers OUR COLLEAGUES New roles created Added >1,000 customer support roles 550 roles in B&PB 7 $BN TOTAL REPAYMENT DEFERRALS APPROVED TO DATE APPROVED Home loans >110k >$60bn $19bn outstanding Business loans >38k late October • Increased support and flexibility Cross-skilled service model rolled out in regional branches Completing regular pulse checks to get timely feedback on colleague needs Increased investment -$2.4bn In new lending to SME & sole traders per month >$600m In Business Support Loans provided to date $50m Investment over 3 years for colleagues to be trained in fundamentals of banking - an industry first >1.4k Colleagues now industry-certified in cloud Single leadership program National Australia Bank#8WE 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 Personal Simple & digital Excellence for customers Grow together Be Own it respectful BNZ Grow in Personal & SME MEASURES FOR SUCCESS Engagement UBank New customer acquisition NPS growth ↓ Cash EPS growth % ROE National Australia Bank#9FOCUSED ON EXECUTION WITH GOOD PROGRESS TO DATE 9 al ✓ Implemented new customer-centric organisation structure with clear accountabilities Leadership team largely in place - clear understanding of key strategic priorities Investing in colleagues – launch of Career Qualified in Banking and single Leadership program Sale of MLC Wealth to IOOF to simplify business Strong technology foundations leading to improved resilience, lower cost and enhanced customer experience Accelerated roll-out of digital tools and new partnerships to enhance data & analytics capabilities National Australia Bank#10WE 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 HNW 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 10 BANKING Disciplined growth • Highly professional relationship managers and specialists Grow in personal & SME • Step change in digital banking capability · New customer acquisition New propositions driving customer acquisition infrastructure, • Leadership in • Simpler, more focused bank • Market leading digital experience · investors, sustainability Enhanced transactional banking and asset distribution capability Re-weight to less capital intense segments Ambition to expand into micro-business National Australia Bank#11INVESTMENT IS FOCUSED ON OUR KEY STRATEGIC PRIORITIES 11 Planned FY21 Investment spend ~$1.3bn Discretionary spend ~30% Other spend ~70% DISCRETIONARY INVESTMENT SPEND FOCUSED ON CORE PROJECTS TO SUPPORT GROWTH • Simplify business lending processes and policies • • . . • . Invest in bankers, processes and technology to improve customer experience Simpler and digital transactional banking Simplified end to end home lending process - initial focus on proprietary channels Grow UBank as a digital attacker with a differentiated proposition Enhanced use of data and analytics to deliver customer solutions and improve control environment Continue to enhance technology resilience via insourcing and migration of apps to the cloud . Investment to uplift systems, processes and control environment Focus on financial crime detection and prevention, and cyber security capability • Sydney and Melbourne commercial property fit outs National Australia Bank#12LEVERAGING STRONG TECHNOLOGY FOUNDATION CLOUD MIGRATION, APP REDUCTION & RESILIENCE • • Continuing strategy of cloud migration and reduction in apps Announced strategic partnership with Microsoft - plan to migrate 80% of apps to the cloud CONTINUED FOCUS ON CYBER, FINANCIAL CRIME AND FRAUD • Investment and continued focus on cyber security and fraud detection has yielded strong outcomes • Broadly stable losses despite surge in attempted fraud Reduction in applications 7% Since FY17 • • ($bn) 38% 19% 3% High and Critical incidents reduction FY18 FY19 FY20 1.8 70% ■% Applications migrated to cloud Since FY17 1.2 NAB Connect migrated to the cloud with benefits including secure and scalable capacity and improved platform resilience and reliability for customers 40 40 Improvement in NAB Connect NPS +25 +16 • 0.6 Achieved 50% faster cyber detection and response capabilities 40x increase in data protection efficacy through preventative control uplifts Attempted fraud vs estimated losses LI Q3 0.0 Q1 Q2 Q4 ■Attempted fraud ■Estimated fraud losses . -1 ♡ -40 FY17 FY18 FY19 FY20 (1) Since June 2017 12 Leading an industry consortium - "Clean Pipes", that seeks to target and filter malicious internet traffic at risk of harming the community Invested $300m to uplift financial crime capabilities¹ and now have >1,000 colleagues dedicated to managing financial crime risks National Australia Bank#13DIGITAL TOOLS SUPPORT BETTER CUSTOMER OUTCOMES SUPPORTING CUSTOMER INTERACTIONS Virtual chats Increase in virtual chats optimised support for customers - only ~15% of chat sessions transferred to contact centres INCREASING DIGITAL EXECUTION >95% mortgage documents in broker channel executed digitally with e- signatures Savings of ~500k pages of paper per month Error rates <15% in returned documents DEVELOPING INNOVATIVE SOLUTIONS Partnerships to provide enhanced analytics to business customers Announced partnerships with Pollinate and Vend to provide enhanced analytics to our business customers pollinate vend 13 Appointment booking tool Offering customers flexibility to book appointments when and where it suits them in a branch, on the phone, in - their own home, office or virtually Goals & needs New business accounts have faster set up via e-signature solution¹ Simple consumer product sales via digital² Simple Home Loans Re-imagining the application process to help our customers with simple lending needs into their homes as seamlessly as possible StraightUp card NAI STRAIGHTUP Supporting colleagues to capture 65% 51% NAB's StraightUp Card is Australia's first no interest conversations with customers in a digital 41% 31% and intuitive way VISA credit card, providing customers with more control over their finances FY17 FY18 FY19 FY20 (1) Account Authority Card (AAC) and Specimen Signature Card (SSC) processes now completed using e-signature instead of paper based forms (2) Simple consumer products refer to transaction accounts, savings accounts, credit cards and personal loans National Australia Bank#14WHAT WILL SUCCESS LOOK LIKE? 14 KEY MEASURES OF SUCCESS Colleague engagement · Top quartile engagement OUR AMBITION OVER 3-5 YEARS Customer NPS • Strategic NPS positive and #1 of majors Cash EPS growth • • Focus on growing share in target segments, while managing risk and pricing disciplines Disciplined approach to costs and investment - target lower absolute costs¹ (relative to FY20 cost base of $7.7bn) ROE • Target double digit Cash ROE (1) Excluding large notable items National Australia Bank#15FY20 FINANCIALS GARY LENNON Group Chief Financial Officer National Australia Bank#16GROUP FINANCIAL PERFORMANCE GROWTH BY KEY FINANCIAL INDICATORS (EX LARGE NOTABLE ITEMS) (4.1%) 16 5.6% (25.9%) (410 bps) (140 bps) 10,056 9,640 (8.8%) 6,389 12.4 4,688 4,952 4,733 8.3 9.1 7.7 2,475 2,258 FY19 FY20 1H20 2H20 FY19 FY20 1H20 2H20 FY19 Underlying profit ($m) Cash earnings ($m) FY20 1H20 Cash ROE (%) 2H20 P&L key financial indicators FY20 ($m) FY20 V FY19 2H20 ($m) 2H20 v 1H20 Net Operating Income 17,319 (1.5%) 8,884 5.3% Operating Expenses 7,679 2.0% 3,932 4.9% Credit Impairment Charge 2,762 Large 1,601 37.9% National Australia Bank#17REMEDIATION AND LARGE NOTABLE ITEMS CUSTOMER-RELATED REMEDIATION PROVISION CHARGES¹ PAYROLL REMEDIATION ($m) 832 66 525 314 46 766 266 0 188 479 94 • 91 314 172 97 2H18 1H19 2H19 1H20 2H20 ■Wealth-related Banking PROVISIONING AND UTILISATION ($m) 1,945 Costs to do 557 • Extensive review into payments to both current and former Australian colleagues Range of potential payroll under and over payments issues; remediating under payments dating back to 1 October 2012 2H20 provisions of $128m before tax ($90m after tax) including $20m before tax ($14m after tax) in Discontinued Operations • • >1,200 colleagues dedicated to remediation activities across NAB and MLC Wealth Salaried planner adviser service fee program substantially complete 801k payments made to customers since June 2018 at a total value of $716m IMPAIRMENT OF PROPERTY-RELATED ASSETS • • 2H20 charges of $134m before tax ($94m after tax) Primarily relates to plans to consolidate NAB's Melbourne office space with more colleagues expected to adopt a flexible and hybrid approach to working over the longer term • Ongoing cost savings <$20m p.a reflecting ~7 year lease tail; offset by transitional property costs in FY21 Customer payments 1,388 716 • Provision at Payments since 30 Sep 2020 June 2018 Continue to review means of accelerating payments to customers (1) Charges are post-tax and include amounts taken through discontinued operations. Wealth customer-related remediation transferred to Discontinued Operations following the announced agreement to sell 100% of MLC Wealth to IOOF Holdings Ltd (I0OF). Prior periods have been restated to include customer remediation charges for discontinued operations to be consistent with the current period presentation 17 National Australia Bank#1818 REVENUE NET OPERATING INCOME (EX LARGE NOTABLE ITEMS) ($m) HoH revenue up 5.3% (YoY down 1.5%) 8,792 8,435 (40) Excludes Markets & Treasury (116) 19 672 (86) 8,884 Sep 19 Mar 20 Volumes Margin Fees & Commissions Markets & Treasury Other Sep 20 Income National Australia Bank#19MARKETS AND TREASURY INCOME GROUP MARKETS & TREASURY INCOME ($m) 940 838 $160m mark-to-market losses on the high quality liquids portfolio from 1H20 I have fully reversed in 2H20 1,250 578 888 572 453 277 372 (4) Mar 19 402 387 362 (17) (86) 0 Sep 19 Mar 20 Sep 20 ■Derivative Valuation Adjustment¹ ■Customer Risk Management 2 ■NAB Risk Management³ GROUP MARKETS & TREASURY INCOME OVER TIME ($m) 1,933 1,817 1,738 1,778 1,828 FY16 FY17 FY18 FY19 FY20 (1) Derivative valuation adjustments include credit valuation adjustments and funding valuation adjustments. In 2H20 the impact of a change in methodology to the credit valuation adjustment reduced income by $65m (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, wholesale funding and liquidity requirements and trading market risk to support the Group's franchises National Australia 19 Bank#20NET INTEREST MARGIN NET INTEREST MARGIN 1.78% 1.78% 0.04% (0.08%) 0.03% (0.02%) 1.75% 0.06% (0.04%) 1.77% Sep 19 Mar 20 Lending Margin Funding Deposits Capital & Other Sep 20 Ex Markets & Treasury Higher Liquids Markets & Treasury 1 Sep 20 KEY CONSIDERATIONS AVERAGE LONG TERM WHOLESALE FUNDING COSTS4 (bps) • FY21 NIM impact from the low rate environment expected to be ~6bps² 225 200 • . Competitive pressures and higher liquidity to remain a headwind, however lower funding costs and deposit mix provide a modest tailwind Bills-OIS sensitivity reduced - 17bps of spread³ = 1bp of NIM (was 13bps spread in June) $84bn replicating portfolio provides 3.5 year average hedge for capital ($41bn) and low rate deposits ($43bn) 25 - 175 150 125 100 75 50 Sep 07 Sep 09 Sep 11 Sep 13 Sep 15 Term Funding Portfolio WAC Forecast WAC of Portfolio Sep 17 Sep 19 New Issuance WAC (rolling 6m average) Sep 21 (1) Largely relates to NII/OOI offset (2) Estimated impact of previously announced RBA and RBNZ cash rate cuts on Group NIM, including the deposits impact, lower expected replicating portfolio benefits, and impact of announced repricing. Excludes the impact of any future cash rate movements (3) Based on September month average (4) Term Wholesale Funding Costs (including subordinated debt and TFF drawdowns) >12 Months at issuance (spread to 3 month BBSW). Average cost of new issuance is on a 6 month rolling basis 20 20 National Australia Bank#21OPERATING EXPENSES OPERATING EXPENSES (EX LARGE NOTABLE ITEMS) ($m) YoY expense growth 2.0% (HoH 4.9%) 21 21 7,528 (348) Cumulative productivity savings of $1.2bn over FY17-20 120 419 (284) Including $29m net benefit from capitalised software policy change 103 141 7,679 FY19 Productivity savings Remuneration and inflation investment Technology and Depreciation and Amortisation Restructuring Other FY20 related costs National Australia Bank#22HIGHER CREDIT IMPAIRMENT CHARGE AND PROVISIONS CREDIT IMPAIRMENT CHARGE ($m) 0.54% 0.38% 1,601 0.14% 0.15% 0.16% 1,161 661 59 347 406 449 470 807 367 33 27 21 416 443 573 333 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Forward looking EA top-up (COVID-19) Forward looking adjustments (FLAS)' Credit impairment charge (CIC) Credit impairment as a % of GLAS (half year annualised) COLLECTIVE PROVISION BALANCES KEY CONSIDERATIONS 1H20 V 2H20 Underlying CIC2 of $573m or 19bps of GLAs, up 8bps from 1H20 reflecting net impact of re-ratings of performing exposures Net increase in target sector forward looking adjustment (FLAs) of $367m for Aviation, Tourism, Hospitality, Entertainment, Retail Trade and Commercial Property Increase in forward looking Economic Adjustment (EA) of $661m reflecting expectations for a more prolonged economic recovery and material uncertainty around the outlook including the shift from support to stimulus COLLECTIVE PROVISION COVERAGE 22 ($m) 5,536 4,401 3,249 614 3,360 1,468 807 0.94% 0.96% 641 662 1,029 0.54% 0.56% 2,635 2,719 2,932 3,039 Mar 19 Sep 19 Mar 20 Sep 20 Mar 19 Sep 19 ■Collective Provision EA top-up (COVID-19) ■ Collective Provision FLAS ■Underlying Collective Provision (1) Represents collective provision Forward Looking Adjustments (FLAs) for targeted sectors (2) Represents total credit impairment charge less EA top-up and FLA increase as a percentage of GLAS (half year annualised) 1.21% 0.72% Mar 20 1.56% 0.93% Sep 20 ■ Collective Provisions as % of Credit Risk Weighted Assets Collective Provisions as % of GLAS National Australia Bank#2323 MODEST ASSET QUALITY DETERIORATION BUT WATCH LOANS HIGHER KEY CONSIDERATIONS • . 90+ DPD & GIA ratio uplift largely reflects increased delinquencies in Australian home loan portfolio where customers not part of deferrals Eligible deferral customers treated in accordance with APRA guidance, arrears profile frozen from date of deferral Material watch loan ratio uplift mainly reflects re-gradings of performing customers in industries heavily impacted by COVID-19 lockdowns e.g. Aviation NEW IMPAIRED ASSETS ($m) 807 Small number of well-secured NZ dairy exposures 276 536 531 553 539 401 • New impaired assets broadly stable 90+ DPD, GIAS & WATCH LOANS¹ AS A % OF GLAS Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Re-gradings of performing customers 1.03% 1.03% 1.20% 1.11% 0.71% Sep 18 0.79% Mar 19 0.93% Sep 19 2.58% 0.97% 1.03% Mar 20 Sep 20 ■Watch loans as a % of GLAS ■90+ DPD & GIAs as a % of GLAS (1) Referral to Watch generally triggered by banker annual reviews through the year or as a result of customers experiencing cashflow pressures National Australia Bank#24EXPECTED CREDIT LOSSES (ECL) HIGHER EXPECTED CREDIT LOSS (ECL) PROVISIONING PROCESS AND MOVEMENTS¹ ($m) 3,900 4,835 155 661 367 (7) 6,011 Probability weighted ECL Probability weighted ECL Sep 19 Mar 20 Underlying collective provision Forward looking Economic Adjustment Target sector forward looking adjustments Specific provision Probability weighted ECL Sep 20 UNDERLYING CP Model outcomes based on point-in- time data • Forms base-line • ECONOMIC ADJUSTMENT (EA) Minimum 6 monthly reviews Forward view of additional stress across portfolio from base-line, according to 3 scenarios (upside, base, downside) which are probability weighted 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) TARGET SECTOR FLAS Considers forward looking stress incremental to EA top- up Specific to particular parts of the portfolio e.g. sector or region (1) Expected credit losses (ECL) excludes collective provisions on fair value loans and derivatives 24 24 National Australia Bank#25ECL ASSESSMENT EXPECTED CREDIT LOSS (ECL) SCENARIOS Total Provisions for Expected Credit Losses KEY CONSIDERATIONS • • Modest underlying CP uplift reflecting material levels of support (e.g. deferrals, JobKeeper etc) and liquidity Modest deterioration in economic assumptions – deeper trough in economic activity and slower recovery Introduced upside weighting to reflect material uncertainty over economic outlook including impact of stimulus Detailed analysis of exposures most at risk driving higher target sector FLAS Limited change in exposures (total and mix) (ECL)1 $m 2H20 (probability 100% Base case 100% Downside ● weighted) Housing 1,245 1,188 1,672 Business 4,252 3,925 5,501 Total Group 6,011 5,611 7,774 Change vs March 20 1,176 1,220 (81) ECONOMIC ASSUMPTIONS Economic assumptions considered in deriving ECL scenarios as at Sep 20 Scenario weightings applied in probability weighted ECL for the Australian portfolio Base case Downside % CY20 20 C) CY21 CY22 CY20 CY21 CY22 Upside Base Case Downside GDP change (Year ended (5.7) 3.1 2.8 (8.0) 1.5 2.5 % 2H20 2H20 2H20 December) Unemployment Housing 15 60 25 9.2 7.6 6.6 12.0 12.8 9.9 (end of year) Business 15 60 House price change (11.6) (20.7) Total Group 15 60 60 60 25 25 25 (Peak-to-trough) (1) Expected credit losses (ECL) excludes collective provisions on fair value loans and derivatives. Scenarios, prepared for purposes of informing forward looking provisions, rely on NAB Economics modelling and management judgement 25 25 National Australia Bank#26TARGET SECTOR FORWARD LOOKING ADJUSTMENTS (FLAS) STRENGTHENED COLLECTIVE PROVISION TARGET SECTOR FLAS KEY CONSIDERATIONS 26 ($m) 1,029 662 372 133 232 • 81 89 180 139 134 91 25 Mar 20 ■ Aviation 190 25 Sep 20 ■Australian Tourism, Hospitality and Entertainment ■Australian Mortgages ■Australian Agri ■Australian Retail Trade ■Commercial Property FLAS capture risks incremental to that captured by broader EA top-up New Aviation FLA reflects slower recovery profile than broader economy given international and some domestic border closures New FLA for Tourism, Hospitality & Entertainment given COVID-19 restrictions on trade and activity Top-up to Commercial Property FLA to reflect potential COVID-19 impacts Partial release of Australian High Risk Mortgages FLAs given EA top-up, with an overall increase in the level of coverage for the mortgage portfolio Partial release of Australian Agri FLA given easing of drought conditions for the bulk of exposures ■ Other National Australia Bank#27AUSTRALIAN HOME LOAN DEFERRALS DEFERRAL BALANCES¹ 12.3% 37 Jun 20 92 92 9.6% 69 Further $10bn expiring by end of November 29 34 14 Sep 20 23 Oct 20 Deferral balances $bn Number of accounts deferred (000s) Deferral balances as % of total home lending CUSTOMER DEFERRAL OUTCOMES³ Advised intent to resume repayment at deferral expiry 54% 4 Elected to resume repayments prior to deferral expiry 38%- COMMENTS . • • ~110k deferrals have been granted with ~75k no longer on deferral Home lending deferral extensions considered by NAB Assist on a case-by-case basis. Other options include 12 months Interest Only or restructure ~$2bn has been referred to NAB Assist of which ~$0.5bn deferral extensions have been granted (~1.2k accounts)² Victoria represents 41% of referrals to NAB Assist, 37% of deferral extensions granted and 33% of remaining deferral balances Customers referred to NAB Assist have a dynamic LVR of 63% and 9% have a dynamic LVR >90% BALANCES BY DYNAMIC LVR5 Deferrals overweight higher LVR bands Referred to 43% NAB Assist 5% 34% At September there were $2bn of balances with LVR >90% (~45% with no LMI) 24% 22% Deferral extended 2% 19% 18% 15% 12% 7% 5% 0-60% 60.01-70% 70.01-80% 80.01-90% >90% Convert to Interest Only <1% ■■Deferrals (avg DLVR 57%) ■Total Book (avg DLVR 45%) (1) (2) As at 23 October unless otherwise stated. Prepared using product based categorisation which differs to APRA reporting based on predominant loan purpose NAB branded Principal & Interest home loans only (3) Percentages refer to deferral accounts. Excludes customers where outcome not known (4) Based on customer conversations prior to expiry of deferral (5) Represents balances of deferral customers as at 30 September 2020 27 National Australia Bank#28AUSTRALIAN BUSINESS LOAN (B&PB) DEFERRALS¹ DEFERRAL BALANCES² 19 17.3% Jun 20 39 12.2% 30 Further $4bn expiring by end of November 13 5 Sep 20 27 Oct 20 11 COMMENTS . • • Deferral extensions considered by SBS/NAB Assist on a case- by-case basis. Other options include forbearance or restructure ~$0.8bn has been referred to SBS/NAB Assist and to date ~30% of these have been granted an extension Victoria represent >50% of balances referred to SBS/NAB Assist and 30% of remaining deferral balances Customers in Retail Trade, Tourism, Hospitality & Entertainment sectors represent 38% of balances referred to SBS/NAB Assist and 16% of remaining deferral balances Deferral balances $bn Number of accounts deferred (000s) Deferral balances as % of total B&PB business lending CUSTOMER DEFERRAL OUTCOMES³ RISK CATEGORISATION BY EXPOSURE AT DEFAULT5 (%) Advised intent to resume repayment at deferral expiry 76%4 Referred to SBS/NAB Assist 6% 49 38 38 Loan payout 1% Lower risk Elected to resume repayments prior to deferral expiry 16% As at 27 October unless otherwise stated. Refers to customers eligible to receive a business loan deferral - excludes institutional and corporate customers. B&PB refers to Business & Private Banking Prepared using product based categorisation which differs to APRA reporting based on predominant loan purpose Percentages refer to balances of deferrals. Excludes customers where outcome not known (1) (2) (3) (4) Based on customer conversations prior to expiry of deferral (5) 28 20 Categorisation is based on NAB's internal methodology, which considers items viewed as material drivers of risk profiles including industry sectors, turnover, payment behaviour and customer risk scores. Represents exposure of deferral customers as at 30 September 2020 13 Higher risk National Australia Bank#29STRONG CAPITAL POSITION GROUP BASEL III COMMON EQUITY TIER 1 CAPITAL RATIO (%) 10.39 0.50 0.17 Capital generation +29bps (+27bps ex DRP) 0.98 (0.15) (0.07) (0.14) (0.19) (0.02) 11.82 11.47 Mar 20 Cash earnings Dividend (net DRP) RWA Growth¹ $4.25bn Equity Raise Rates and FX Large Notable Sale of MLC MTM Items Wealth Other Sep 20 Sep 20 pro forma² CET1 CONSIDERATIONS • Strong CET1 of 11.47%, well placed to absorb materially higher RWAs in an economic downturn while continuing to lend and support customers 2H20 CET1 benefit of 32bps from FX and MTM on high quality liquids (reflected in cash earnings, reserves & CRWA impacts including derivatives) vs 21bps drag in 1H20 Completion of MLC Wealth sale³ expected to add ~35bps CET1 (-7bps impact in 2H20 relating to separation cost provision) DIVIDEND AND OTHER CONSIDERATIONS Final dividend of 30cps, flat on 1H20 reflecting strong capital position, continuing uncertain outlook for the impacts of COVID-19, and APRA's revised dividend guidance represents 48% of cash earnings (including large notable items), 50% of statutory earnings (continuing operations) DRP will operate with no discount NAB is considering an offer of a new ASX listed Additional Tier 1 capital security alongside the repayment of NAB Convertible Preference Shares II (CPS II)4 (1) Excludes FX translation Adjusted for completion of agreed sale of MLC Wealth (3) 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 Expected completion before middle of calendar year 2021, subject to timing of regulatory approvals (4) Any offer remains subject to market conditions and all relevant approvals being obtained. Any offer of ASX listed Additional Tier 1 capital securities by NAB will be made under a prospectus that will 29 29 be available on NAB's website. If an offer is made, any person wishing to apply will need to do so as detailed in the prospectus National Australia Bank#3030 30 CRWA AND SENSITIVITY CREDIT RWA (%) 364.6 14.1 (0.6) 0.4 Credit quality & portfolio mix +$1.8bn 3.3 (8.2) $12.2bn reduction more than offsets 1H20 increase (4.8) (2.6) (3.7) (8.5) 354.0 Mar 20 Volume Model and Non retail SME overlay Methodology downgrades Non retail upgrades Other non retail¹ Retail Derivatives Translation FX and Repurchase Agreements Sep 20 CREDIT RWA SENSITIVITY Housing2 Business² Total Group CRWA increase $bn³ Pro forma CET1 impact³ Credit RWA/EAD (%) • Credit EAD $bn Deterioration over 2 yrs under key scenarios Sep 20 Low end High end 387 27 31 33 333 57 63 68 929 38 43 46 · ~37 ~65 ~(80bps) ~(140bps) CRWA migration trending towards low end but outlook remains uncertain with impacts delayed by ongoing stimulus and support; 2H20 gross downgrades consumed ~40bps of CET1 Large and 'high risk' customers reviewed; overlay held for expected deterioration in SME customers not yet reviewed • non retail ratings downgrades primarily customers in highly impacted sectors ratings upgrades in retail (particularly mortgages supported by deferrals and higher household savings) and non retail (customers less impacted) (1) Other includes portfolio mix and other risk factors (2) Housing includes IRB Residential mortgages asset class. Business includes IRB Corporate (incl. Corporate SME) and Specialised Lending asset classes (3) Based on capital scenario calculations at the onset of COVID-19 downturn National Australia Bank#31FUNDING & LIQUIDITY PROFILE KEY MESSAGES . • Liquidity remains strong with significant surpluses above regulatory minimums Strong deposit inflows continued in line with system trends Term Funding Facility (TFF) of $25.4bn at 30 September, with the full Initial Allowance of $14.3bn drawn down. Supplementary Allowance of $9.6bn available from 1 October TFF to be utilised to support lending and refinance wholesale funding maturities TERM FUNDING FACILITY I TFF available November 2020 Additional Allowance: $4.2bn² Supplementary Allowance: $9.6bn Initial Allowance: $14.3bn 2H21 Term Funding Maturities: $14bn³ 1H21 Term Funding Maturities: $11bn³ Drawn TFF: $14.3bn LCR1 NSFR 130 136 139 126 127 112 113 116 100% minimum LIQUID ASSET PORTFOLIO ($bn) 252 204 82 173 180 50 50 34 51 43 40 46 82 111 136 84 Mar 19 Sep 19 Mar 20 Sep 20 ■LCR (%) Mar 19 Sep 19 Mar 20 Sep 20 ■NSFR (%) Mar 19 Sep 19 Mar 20 Sep 20 ■ Government, Cash & Central Bank ■Internal RMBS (post haircuts) ■ Bank, Corporates & Other At 30 September 2020, NAB's Additional Allowance was $11.1bn. Available TFF as at September 2020 is used for the purposes of calculating NSFR and LCR, did not include the Supplementary Allowance available from October 2020 (1) Quarterly average (2) (3) Excludes BNZ maturities. Spot FX 31 National Australia Bank#32FY21 KEY CONSIDERATIONS 32 Revenue headwinds Our response (1) Excluding large notable items • • Sustained low rate environments in Australia and New Zealand expected to impact Group NIM by ~6bps in FY21 Subdued demand for credit until confidence returns • • Australian business system growth expected to be ~2% in FY21 • Australian housing system growth expected to be <0.5% in FY21 Investment in target segments to achieve growth while managing pricing and risk disciplines • • Targeting FY21 expense growth¹ limited to 0-2% reflecting disciplined approach Current provision coverage reflects anticipated underlying deterioration in FY21, but remains subject to uncertainty as government support is withdrawn Anticipated completion of MLC Wealth sale in FY21 expected to add ~35bps of CET1 National Australia Bank#33PRIORITIES IN FY21 TO BUILD MOMENTUM 33 Balance sheet strength for targeted growth opportunities 寫實 ge Disciplined on costs Execution of strategic priorities with investment spend managed via clear governance principles Ongoing investment in our colleagues and support for our customer-facing teams Continue to invest in risk and control environments Completion of MLC Wealth sale and significant progress on ongoing remediation National Australia Bank#34ADDITIONAL INFORMATION DIVISIONAL PERFORMANCES National Australia Bank#35DIVISIONAL CONTRIBUTIONS 35 Divisional cash earnings FY20 ($m) FY20 V FY19 2H20 ($m) 2H20 v 1H20 Business and Private Banking 2,489 (11.6%) 1,125 (17.5%) Personal Banking 1,380 9.5% 657 (9.1%) Corporate & Institutional Banking 1,469 (2.6%) 768 9.6% New Zealand Banking¹ (1) In local currency 1,036 (1.8%) 474 (15.7%) National Australia Bank#3636 BUSINESS & PRIVATE BANKING CASH EARNINGS ($m) (11.6%) REVENUE AND MARGIN (5.4%) (17.5%) 2,817 2,489 1,364 (5.2%) 6,638 6,278 2.94% 2.92% 2.90% 2.81% 3,222 3,056 1,125 FY19 FY20 1H20 2H20 FY19 FY20 1H20 2H20 ■Total revenue ($m) Mar 19 Sep 19 Mar 20 ■Net interest margin Sep 20 BUSINESS AND HOUSING LENDING GLAS ($bn) 0.4% (4.6%) 109.4 109.0 109.1 88.3 86.1 84.2 Sep 19 Mar 20 ■Business lending CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS 0.22% 0.20% 0.12% 0.13% 217 119 Sep 20 Sep 19 Mar 20 Housing lending Sep 20 Mar 19 Sep 19 Credit impairment charge 126 Mar 20 196 Sep 20 Credit impairment as a % of GLAS (half year annualised) National Australia Bank#3737 PERSONAL BANKING CASH EARNINGS ($m) 9.5% REVENUE AND MARGIN 2.7% (9.1%) 1,260 1,380 (2.8%) 4,412 4,531 1.84% 1.96% 2.06% 2.02% 2,298 2,233 723 657 FY19 FY20 1H20 2H20 Mar 19 FY19 FY20 1H20 2H20 ■Total revenue ($m) Sep 19 Mar 20 ■Net interest margin Sep 20 HOUSING LENDING VOLUME GROWTH¹ ($bn) Owner Occupier 2.3% 152.9 CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS ($m) Investor (4.4%) 0.16% 0.13% 0.10% 0.14% 156.4 108.8 104.0 173 141 147 109 Mar 20 Sep 20 ■PB B&PB Mar 20 Sep 20 ■PB B&PB (1) APRA Monthly Authorised Deposit-taking Institution statistics September 2020. UBank included in Personal Banking Mar 19 Sep 19 Credit impairment charge Mar 20 Sep 20 Credit impairment as a % of GLAS (half year annualised) National Australia Bank#38CORPORATE & INSTITUTIONAL BANKING CASH EARNINGS ($m) (2.6%) 0.6% ex CVA¹ MARGINS AND REVENUE BREAKDOWN² ($m) Revenue Margins 2.7% 4.6% ex CVA¹ 9.6% 16.4% ex CVA¹ 742 862 Markets revenue up 16.2% (24.9% 1.70% 1.72% 1.63% 1.59% 1,508 1,469 ex CVA¹) 701 768 2,624 2,595 Non Markets 0.73% 0.69% 0.70% 0.81% FY19 FY20 1H20 2H20 revenue down (1.1%) FY19 FY20 Mar 19 Sep 19 Mar 20 Sep 20 Corporate & Institutional Banking ex Markets RETURNS FOCUS ($bn) 1.83% CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS ($m) 1.81% 1.70% ex CVA¹ 1.65% 1.63% 114.7 112.3 FY17 FY18 0.37% 127.6 129.9 0.09% 0.06% 10.0 11.4 117.6 118.5 43 FY19 FY20 Mar 19 27 Sep 19 (0.01%) (6) Mar 20 176 Sep 20 Model and Methodology change RWA Underlying RWA Credit impairment charge Credit impairment as a % of GLAS (half year annualised) Pre provision profit % of RWA 3,4 (1) Excludes CVA model change in 2H20 of $65m ($48m after tax) (2) (3) (4) F Markets revenue represents Customer Risk Management revenue and NAB Risk Management Revenue. Includes derivative valuation adjustments FY19 pre provision profit % of RWA impacted by 14bps due to model and methodology changes increasing RWAs by $10bn FY17-19 pre provision profit % of RWA restated to align to FY20 pre provision profit % based on spot RWAS 38 National Australia Bank#39NEW ZEALAND BANKING CASH EARNINGS (NZ$m) 39 (1.8%) (15.7%) 1,055 1,036 562 474 REVENUE AND MARGIN 0.0% (3.5%) 2,537 2,537 2.30% 2.24% 2.20% 1,291 1,246 2.14% FY20 1H20 2H20 Mar 19 Sep 19 ■Net interest margin Mar 20 Sep 20 FY19 FY20 1H20 2H20 FY19 BUSINESS & HOUSING LENDING GLAS (NZ$bn) 7.0% (4.2%) ■Total revenue (NZ$m) CREDIT IMPAIRMENT CHARGES AND AS A % OF GLAS (NZ$m) 0.15% 0.10% 0.09% 44.8 46.0 43.0 43.6 42.9 41.1 66 44 Sep 19 Mar 20 ■Housing lending Sep 20 Sep 19 Mar 20 ■Business Lending Sep 20 Mar 19 Sep 19 Credit impairment charge 42 Mar 20 0.24% 106 Sep 20 Credit impairment as a % of GLAS (half year annualised) National Australia Bank#40ADDITIONAL INFORMATION NAB AND OUR COMMUNITY National Australia Bank#41NAB AT A GLANCE >34,000 Employees CASH EARNINGS DIVISIONAL SPLIT¹ Personal Banking 29% Corporate & Institutional Banking 31% ~9 million Customers New Zealand Banking 21% Business & Private Banking 53% GROSS LOANS & ACCEPTANCES SPLIT Unsecured Lending 1% Business Loans 41% Corporate Functions & Other (34%) 859 Branches/Business centres >160 years in operation Key Financial Data Cash Earnings Cash Earnings¹ Cash ROE¹ Gross Loans & Acceptances Non-performing loans to GLAS² CET1 (APRA) NSFR (APRA) FY20 $3,710m $4,733m 8.3% $594bn 103bps 11.47% 127% Australian Market Share As at September 2020 Mortgages 58% Business lending³ 21.5% Housing lending³ 14.6% Personal lending4 9.2% Credit Ratings NAB Ltd LT/ST S&P AA-/A-1+ (Negative) Moody's Aa3/P-1 (Stable) Fitch A+/F1 (Negative) Numbers are shown excluding large notable items. Refer to page 118 for definition of cash earnings and reconciliation to statutory net profit 90+ days past due and gross impaired assets to gross loans and acceptances (1) (2) (3) APRA Monthly Authorised Deposit-taking Institution statistics (4) 41 Personal loans business tracker reports provided by RFI, represents share of RFI defined peer group data. Market share is at Aug 20 National Australia Bank#42OUR ECONOMIC VALUE DISTRIBUTED B SUPPLIERS 42 Payments made for the provision of utilities, goods and services. $5.1bn COMMUNITY INVESTMENT Community partnerships, donations, grants, in kind support and volunteering. $42.8m SHAREHOLDERS $3.3 billion dollars in dividend payments to more than 641,000 shareholders. $3.3bn COLLEAGUES TOOD GOVERNMENTS Colleague salaries, superannuation contributions and incentives. Payments made to governments in the form of the Bank Levy ($412 million) plus $3.1 billion in income taxes, fringe benefit taxes and payroll taxes among others. $4.Obn $3.5bn Total Economic Value Distributed¹ $15.9bn OUR INDIRECT ECONOMIC CONTRIBUTION $66bn in new home lending $82bn in new business lending $469bn in deposits managed for retail and business deposit customers (1) Aligned to the Global Reporting Initiative Standards >$60bn in total deferrals provided during COVID-19 National Australia Bank#43OUR STRATEGY: LONG TERM APPROACH SUSTAINABILITY IS EMBEDDED EXPLICITLY IN THE LONG-TERM PILLAR OF OUR GROUP STRATEGY, FOCUSED ON COMMERCIAL RESPONSES TO SOCIETY'S BIGGEST CHALLENGES 磁 Supporting a low-carbon economy, driving investment in natural assets, helping people reduce financial stress and creating more sustainable and inclusive communities. Our priorities: Climate change Sustainable agriculture • Financial health and resilience Indigenous economic participation Infrastructure and urbanisation 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: Our people • ESG risk management Supply chain management Human rights, including modern slavery Incentivising sustainable financing INNOVATING FOR THE FUTURE $ Driving investment in new, emerging and disruptive technologies, and partnering with customers, industry and government on critical thought leadership and disaster response initiatives. Our priorities: Our future core business and market- leading data analytics Partnerships that matter Natural disaster preparedness, relief and recovery 43 7 AFFORDABLE AND CLEAN ENERGY 8 DECENT WORK AND ECONOMIC GROWTH 9 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 National Australia Bank#44COMMERCIAL RESPONSES - CLIMATE CHANGE OUR COMMITMENTS Commitment Achieving a Paris Agreement aligned net zero emissions lending portfolio by 2050 Environmental financing target of $70bn by 2025 Cap thermal coal mining exposures at Sep 2019 levels, reduce thermal coal mining financing by 50% by 2028 to be effectively zero by 2035 Source 100% of our electricity consumption from renewable sources by 2025 8 Environmental operational performance targets: 2025 OUR EXPOSURES Progress Initial financed emissions estimate completed, pathway mapping under way (next slide) $42.5bn cumulative progress1 11.4% ($87m) reduction from FY19. Expected 50% reduction by 2026, and effectively zero by 2030 7% of electricity use from renewable sources in FY20 | Signed up to RE100 Detailed performance in 2020 Sustainability Report Energy generation EAD by fuel source² ($bn) Resource EAD by type ($bn) 7.79 11.54 7.13 7.26 7.37 10.47 10.64 1.16 ■Gold Ore Mining 1.45 ■Gas 0.59 0.94 0.98 0.52 1.03 9.33 0.12 0.35 0.12 80'0 0.58 0.62 1.15 ■Metallurgical Coal 0.75 0.89 0.74 ■ Coal 1.04 1.08 1.25 1.16 Mining 0.76 0.84 1.06 0.63 ■Thermal Coal Mining 0.87 0.67 ■ Mixed Fuel 1.94 1.74 2.39 1.87 1.93 2.21 0.76 2.18 ■Iron Ore Mining 2.05 ■ Other/Mixed 1.40 1.07 1.18 1.47 1.31 Renewable 0.89 1.03 Renewables ■Other Mining 1.40 ■ Hydro 72% of energy generation EAD 2.18 2.09 2.35 2.35 Wind at Sep 2020 ■Mining Services ■ Oil & Gas Extraction ³ 3.74 3.73 4.09 2.74 Mar 19 Sep 19 Mar 20 Sep 20 Mar 19 Sep 19 Mar 20 Sep 20 44 (1) Represented as a cumulative amount of new environmental finance since 1 October 2015. Detailed breakdown available in 2020 Sustainability Data Pack, available 11 November. (2) 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. (3) A significant contributor to the reduction of $1.3bn in the Resources portfolio since Sep-19 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#45COMMERCIAL RESPONSES - CLIMATE CHANGE • SUPPORTING CUSTOMERS' TRANSITION Completed initial financed emissions estimate for key Australian customer segments: agribusiness, commercial real estate (office and retail), NGER exposed entities (power generation and resources, including mining, oil and gas) and residential (mortgages)1 Emissions estimate indicates that NAB lends approximately $23,320 to these sectors in Australia for every tonne of GHG emissions released to atmosphere by customers in these industry segments This work provides a baseline for supporting customers' decarbonisation and will help us track decarbonisation of the Group's lending portfolio to net zero by 2050 FY20 HIGHLIGHTS First Australian bank to be a signatory of UN Principles for Responsible Banking Collective Commitment to Climate Action (CCCA) participating with other member banks to deliver on CCCA commitments #1 Australian bank for global renewables transactions, and 20th largest lender to renewable energy industry in the world in FY202 . #1 Australian company in Corporate Knights 2020 Global 100 Most Sustainable Companies Index FINANCED EMISSIONS ESTIMATE¹ Industry sector Agriculture Residential (mortgages) Commercial Real Estate (office and retail) Power generation Resources (including mining, oil and gas) Emissions intensity EAD / tCO2-e TOP RENEWABLE ENERGY PLAYERS - AUSTRALIA³ Cumulative value of deals in USDbn (2004 – 2020) National Australia Bank Ltd Clean Energy Finance Corp $6,797 $46,009 $189,600 $554 $2,164 2.7 1.6 Mitsubishi UFJ Financial Group Inc 1.5 Australia & New Zealand Banking Group Ltd 1.4 Westpac Banking Corp 1.4 Sumitomo Mitsui Financial Group Inc 1.2 1.2 1.1 Commonwealth Bank of Australia BNP Paribas SA 1.1 0.9 Mizuho Financial Group Inc Societe Generale SA 45 (1) Key assumptions and information notes about the methodology used to estimate the financed emissions are available in the Group's 2020 Sustainability Data Pack, to be published 11 November (2) Rankings based on IJGlobal League Table, MLA, Renewables, Last 12 months ending 30 September 2020, Value of Deals (database searched on 16 October 2020) (3) Data Source: Bloomberg NEF Country Profile for Australia - Top Renewable Energy Players (2004 to 3Q 2020). Cumulative totals are in USD as at 30 September 2020. Totals do not include large hydro National Australia Bank#46COMMERCIAL RESPONSES - SUPPORTING INDUSTRY AND COMMUNITIES PROGRESS ON OUR COMMITMENTS • . >$1.2bn provided to support the growing fintech sector: part of 2020-2025 $2bn lending commitment to emerging technology companies >$11m lent to not-for-profit groups and other organisations to build affordable and specialist housing: part of 2020-2023 $2bn financing pledge $2.4m spent with Indigenous businesses: part of $2.6m by 2021 commitment 6,906 microfinance loans provided to Indigenous Australians¹: part of commitment to provide 19,000 loans by 2021 SUSTAINABLE AGRICULTURE • • Draft sustainable agriculture metrics agreed with ClimateWorks: a key step in NAB's Natural Capital Roadmap. In FY21, we will test with customers, farmers and industry to refine, and embed metrics Research project with CSIRO confirmed positive correlation of natural capital measures within Queensland grazing properties with financial performance, testing to explore links with bank data underway BNZ, in partnership with AgFirst Consulting, launched a series of natural capital factsheets to support Agribusiness customers with key environmental topics and on-farm impacts FINANCIAL HEALTH AND RESILIENCE . 26,621 Australian customers referred to NAB Assist for hardship assistance, up 35% reflecting bushfires and COVID-19 support² First Australian bank to offer gambling control via app: >47,000 customers switched on blocks on >64,000 cards Expanded Indigenous Customer Service Line capability - can open customer accounts remotely using alternative forms of identification: >2,500 customers served in 2020 Driving inclusive banking through our Reconciliation Action Plan, Accessibility Action Plan and Customers experiencing Vulnerability Framework BUSHFIRE RECOVERY AND ASSISTANCE $0.55m 0.15 0.40 Donations ($m) $2.99m >1,500 grants provided >1,700 days of bushfire related 1.29 annual leave taken ~4,000 volunteering hours contributed 1.70 Grants ($m) ■Local organisations ■ARC disaster & recovery Business customer premises loss Customer & employee home loss ~$770k also collected via public fundraising for the Australian Red Cross 46 (1) 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 (2) Note this number reflects customers who have been referred to NAB Assist, and is not inclusive of customers with an active deferral as at 30 September 2020 National Australia Bank#47RESILIENT AND SUSTAINABLE BUSINESS PRACTICES INVESTING IN OUR COLLEAGUES . In partnership with the Financial Services Institute of Australasia (FINSIA), investing $50m over three years in NAB workforce to be trained in the fundamentals of banking - an industry first in Australia and New Zealand Ongoing focus on upskilling technology capability with >1,400 industry-certified colleagues in Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform >50,000 hours of digital learning completed through deployment of six industry-leading platforms¹ CODE OF CONDUCT AND TURNOVER Breaches of Code Of Conduct (Australia) Employee turnover rate (%) by exit type 17.4 15.8 11.8 6.1 5.2 3.8 1,215 1,278 1,105 11.3 10.6 8.0 2018 2019 2020 2018 2019 2020 ■Involuntary turnover rate Voluntary turnover rate INCLUSIVE WORKFORCE • • Engagement score of 76 (increase from 66 in 2019)² Offered 65 traineeships to Indigenous Australians and recruited 40 African-Australians in AAIP³ • 40% female representation on NAB Board4 • WGEA Employer of Choice for Gender Equality citation, ranked #14 in Equileap Gender Equality Global Report and member of 2020 Bloomberg Gender-Equality Index WGEA Employer of Choice for Gender Equality PROGRESS A EQUILEAP TOP 100 ENDER 1019-> QUALIT 2020 Bloomberg Gender-Equality Index INTEGRATING ESG • • Climate change incorporated in Board development agenda Incorporated climate change and modern slavery into Risk Awareness training for colleagues Developed a Human Impact Guide to help Financial Crime Operations (FCO) team members understand and recognise the range of situations or sectors which are most susceptible to human impact crimes. Modern slavery and human trafficking are examples of human impact crimes Sustainability Risk explicitly included as a Material Risk in NAB's Risk Management Strategy and Framework and further integrated ESG risk considerations within risk appetite statement (1) NAB employees have access to 250,000 digital learning opportunities through LinkedIn Learning, Coursera, Pluralsight, Udemy, A-Cloud Guru and O'Reilly Safari Books (2) 2020 Employee Engagement Survey conducted by Glint, score based on July 2020 survey. Australia and New Zealand colleagues, population excludes external contractors, consultants and temporary employees. 2020 methodology differs from prior years. The 2019 score has been restated using the updated methodology for comparative purposes. 2019 restatement falls outside the scope of EY assurance (3) African Australian Inclusion Program -500+ skilled African-Australians have gained paid corporate experience since program inception in 2009, with more than 50% of those who have completed the 6- 47 month program still employed by NAB (4) See Towards 2020: NAB's road to gender equality' for more information on our 2020 gender equality targets and commitments National Australia Bank#48ADDITIONAL INFORMATION AUSTRALIAN CUSTOMER EXPERIENCE National Australia Bank#49CUSTOMER EXPERIENCE IMPROVING BUT MORE WORK TO DO STRATEGIC NPS1,2 49 -5 -10 -10 -15 -20 -11 -13 -17 -25 -30 May 16 Sep 16 Jan 17 NAB May 17 Sep 17 Jan 18 May 18 Sep 18 Jan 19 May 19 Sep 19 Jan 20 May 20 Sep 20 Peer 1 Peer 2 Peer 3 CONSUMER4 BUSINESS³ -5 5 -10 -14 0 -15 -15 -15 -5 -20 -21 -10 -25 -15 -30 -35 -20 -40 -25 NAB Peer 1 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 16 16 16 17 17 17 17 18 18 18 19 20 20 20 Peer 3 18 19 19 19 Peer 2 (1) (2) -6 -11 -13 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 20 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. Definition has been updated to give all customers within the Business and Consumer segments equal voice. The overall Strategic NPS result combines the Consumer and Business segment results using a 50% weighting for each. NPS is based on all customers' likelihood to recommend on a scale of 0 to 10 (extremely unlikely to extremely likely). History has been restated (3) October 2020. Source: DBM Atlas - Business. All Business customers, six month rolling averages (4) October 2020. Source: DBM Atlas - Consumer. All Consumer customers, Australian population aged 18+, six month rolling averages National Australia Bank#50CORPORATE & INSTITUTIONAL CUSTOMER METRICS LARGE CORPORATE & INSTITUTIONAL - RELATIONSHIP STRENGTH INDEX¹ - INTEREST RATE HEDGING³ Relationship Strength Index FOREIGN EXCHANGE4 Relationship Strength Index (Index) 620 600 (Index) 600 640 580 600 560 550 560 540 520 520 500 480 500 480 440 450 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 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 2019 (2020 results due Nov 2020) (1) (2) (3) (4) Foreign Exchange Survey 2019 (2020 results due Nov 2020) 50 (5) Debt Securities Origination Survey 2020 50 (6) Transaction Banking Survey 2020 National Australia Bank#51ENHANCING CONSUMER CUSTOMER EXPERIENCE NAB STRAIGHTUP CARD . • Launched the NAB StraightUp Card, Australia's first no- interest credit card, in response to customers wanting access to credit that is simple and easy to understand Key card features include No interest, no late payment fees, no foreign currency fees and no use, no pay 1 – all for one simple monthly fee Can be used anywhere Visa is accepted, online or instore Supported by all major digital wallets including Apple Pay, Google Pay, Samsung Pay and NAB Pay Access to $1k, $2k or $3k credit limit NAB STRAIGHTUP SIMPLE CONSUMER PRODUCT SALES VIA DIGITAL² 65% 51% 41% 31% FY17 FY18 FY19 FY20 GAMBLING RESTRICTIONS • Introduced an option for customers to block gambling transactions in the Mobile App for personal debit and credit cards, the first Australian bank to offer the option via app >47k customers switched on blocks on >64k cards 51 VISA (1) Monthly fee reversed where there is no amount owing and the card has not been used during the relevant statement period (2) Simple consumer products refer to transaction accounts, savings accounts, credit cards and personal loans Gambling transactions Includes cash advances and cash transfers National Australia Bank#52UBANK HIGHLIGHTS CUSTOMERS & COLLEAGUES • 10% growth in customer numbers over FY20 • >5k new home loans provided to customers in FY20 . Re-introduced home loan offering to self-employed 596 610 554 applicants 508 . Won the Canstar Fixed Rate Home Loan of the year for the 3rd year in a row Named in the Top 25 best places to work¹ Mar 19 Sep 19 Mar 20 Sep 20 BANK OF THE YEAR CANSTAR 2018-2020 FIXED RATE HOME LOAN Great Place To WorkⓇ 2020 Best Places to Work 100-999 Employees AUSTRALIA FASTER, MORE FUNCTIONALITY AND INCREASINGLY DIGITAL 4 min sign-up to UBank via the iOS and Android app No time? No worries Get started in a matter of minutes Make sure you're eligible Accounts opan Congratulations! Your new accounts are open ■# Customers (k) Digitally active customers 14% Free2Spend usage 361% A las 10 ye Australian renders for tax purposes What state is your driver licence issued in? Aatatan real Have one of these documents ready Austalan diverse Medcare card Australian anal pessart Derryl save your progress if you elsary pot NEXT NEXT NSW VIC GLD Getting started. With your new accounts DONE Your res Via del card and Psl be delived within 5-7 business days You can set up your acceurt or AaplePay Game Ryan Fat Pay within 24 tours Del 5200 receive bonus t O Free2Spend Budget $49 $31 Left to spend $18 spent so far today 2 transactions Rokujuni Nth Sydney Aus Pending +1 more -$7.70 This fortnight's progress Day 7 of 14 Spending C B 000 freetSpend Coal More Accounts 2019 2020 2019 2020 (1) 13th annual edition of the Best Places to Work benchmarking study in Australia, conducted by Great Place to Work Australia (2) Free2Spend is an in-app tool that works in real-time to provide a daily spend budget based on a savings goal 52 42 Free2Spend tool iOS interface National Australia Bank#53NAB CONNECT MOVED TO CLOUD AND ENHANCING CUSTOMER EXPERIENCE NAB CONNECT MOVED TO THE CLOUD • Migration to Amazon Web Services (AWS) cloud enables secure and scalable compute capacity reducing operational risk and cost, while supporting platform resilience. Migration has already benefited customers from fewer platform interruptions, allowing NAB to deliver a seamless customer experience through fluctuations in demand NAB CONNECT NPS¹ 40 -1 Improvement in NAB Connect NPS +25 +16 53 -40 FY17 FY18 FY19 FY20 Reduction of Supported +42% Increase in usage due to EOFY transactions -60% In infrastructure maintenance times Ranked #1 Online Banking Platform² NAB CONNECT APP LOGINS (m) 1.5 0.8 3.4 3.0 2.6 21 2.1 1H18 2H18 1H19 2H19 1H20 2H20 (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) Peter Lee Associates - Transaction Banking Survey Australia 2020. Ranking against the four major domestic banks National Australia Bank#54QUICKBIZ FOR SMALL BUSINESS CUSTOMERS DIGITAL SMALL BUSINESS UNSECURED LENDING • . • 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 Expanded QuickBiz offering, increasing unsecured term loan lending limit from $100k to up to $250k for existing customers. Eligible customers can now apply for unsecured term loan and overdrafts directly through Internet Banking, enabling enhanced application experience through pre-population of existing customer information, reducing # of clicks by 100+. In response to COVID-19: • • Introduced a 200-basis point rate cut on new term loans and all overdrafts on QuickBiz effective 30 March, and a further 200-basis point rate cut on new term loans effective 6 November for 3 months Offered 6 month deferrals SMALL BUSINESS UNSECURED LENDING VIA QUICKBIZ Proportion of new small business lending accounts generated via QuickBiz¹ 14% 27% 43% 43% 0% FY16 FY17 FY18 FY19 FY20 QUICKBIZ APPLICATION GROWTH # Applications Reduction in applications in FY20 reflects challenging COVID-19 environment and increased take-up of NAB Business Support Loans 54 more money nab NAB QUICKBIZ LOAN - BORROW UP TO $250K* Apply now "Max $100k for new customers and 325k for isong customers. Terms, conditions and lending criteria apply $5,000 inverba Star 17 ABOUT YOUR LOAN TELLOUT YOUR ROSS P APPLICATION SIMARY NO " 2,732 FY17 12,695 9,512 FY18 FY19 11,258 FY20 (1) New QuickBiz loan and QuickBiz overdraft accounts as a percentage of total new term lending and overdraft accounts in the Small Business division. Excludes the NAB Business Support Loan, which is provided as part of the Australian Government's Coronavirus SME Guarantee Scheme, and the NAB JobKeeper Overdraft National Australia Bank#55REDUCTION IN CRITICAL AND HIGH PRIORITY INCIDENTS 'CRITICAL' AND 'HIGH' PRIORITY INCIDENTS¹ Investment in technology driving lower instance of technology incidents since 1H14 95% reduction in "High" priority incidents 98% reduction in "Critical" priority incidents. 55 55 15 10 422322505 600 500 400 300 200 100 0 0 H1 H2 FY14 FY14 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 H2 H1 H2 FY19 FY19 FY20 FY20 ■Critical (left axis) High (right axis) (1) Critical Incidents - Significant impact or outages to customer facing service or payment channels. High Incidents - Functionality impact to customer facing service or impact/outage to internal systems National Australia Bank#56ADDITIONAL INFORMATION AUSTRALIAN BUSINESS LENDING National Australia Bank#57KEY METRICS BUSINESS LENDING REVENUE ($m) 2,275 2,248 2,223 2,204 369 351 343 329 1,906 1,897 1,880 1,875 BUSINESS LENDING NET INTEREST MARGIN (%) 1.92% 1.86% 1.82% 1.78% Mar 19 Sep 19 Mar 20 Sep 20 Mar 19 Sep 19 Mar 20 Sep 20 ■NII ΠΟΟΙ BUSINESS LENDING GLAS ($bn) 215.0 206.5 202.9 205.1 0.1 0.1 0.1 0.1 95.0 97.4 105.8 95.6 SMALL, MEDIUM AND AGRI BUSINESS LENDING MARKET SHARE 25% 25% 107.8 109.0 109.1 109.4 Mar 19 Sep 19 Mar 20 Sep 20 ■Business & Private Banking ■ Corporate & Institutional Banking ■ Other Turnover $0.1m to <$5m1 Turnover $5m to <$50m¹ 31% Agribusiness 2 (1) September 2020 DBM Business Financial Services Monitor, APRA Aligned Lending Market Share. Australian businesses with an aligned product, excluding Finance & Insurance and Government. APRA Aligned Lending market share is based on the total lending dollars held at the financial institution, divided by the total lending dollars held at financial institutions reporting to APRA, with products and Fls aligned as closely as possible to APRA definitions and inclusions. Data is on a 12-month roll, weighted to the Australian business population. Small Business ($0.1m-<$5m) and Medium Business ($5m-<$50m) (2) July 2020 / NAB APRA submission / RBA Banking System 57 National Australia Bank#58BUSINESS & PRIVATE BANKING - SME BUSINESS LENDING GROWTH AUSTRALIAN SME BUSINESS LENDING GROWTH (YOY)¹ 8.3% (1.7%) (1.3%) 0.4% (4.0%) $31bn $8bn $28bn $42bn $109bn Agri (0.4%) 2 Health CRE Other NAB B&PB SME growth-average of ANZ, CBA, WBC3 Denotes lending balance as at 30 September 2020 (1) Growth rates are on a customer segment basis and not industry (2) CRE primarily represents commercial real estate investment lending across a range of asset classes including Retail, Office, Industrial, Tourism and Leisure, and Residential Represents NAB internal estimates of SME business lending growth for ANZ, CBA and WBC based on latest publicly available peer data National Australia Bank#5959 BUSINESS LENDING ASSET QUALITY BUSINESS LENDING CREDIT IMPAIRMENT CHARGE AND AS % OF GLAS ($m) 0.33% 0.14% 0.10% 0.07% BUSINESS LENDING 90+ DPD AND GIAS AND AS % OF GLAS ($m) 0.62% 0.67% 0.66% 0.72% 336 1,257 1,394 1,420 1,474 151 103 Mar 19 Sep 19 77 Mar 20 Sep 20 Credit Impairment charge -Credit Impairment/GLAs (half year annualised) TOTAL BUSINESS LENDING SECURITY PROFILE¹ Mar 19 Sep 19 Mar 20 Sep 20 Total Business Lending 90+ DPD and GIAS Business Lending 90+ DPD and GIAs to Business Lending GLAS BUSINESS LENDING PORTFOLIO QUALITY 23% 22% 22% 20% 19% 19% 19% 20% 51% 51% 52% 49% 58% 59% 59% 60% 49% 49% 48% 51% Mar 19 Sep 19 Mar 20 Sep 20 ■Fully Secured ■Partially Secured ■ Unsecured Mar 19 Sep 19 ■Sub-Investment grade equivalent Mar 20 Sep 20 ■Investment grade equivalent (1) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security National Australia Bank#6060 BUSINESS & PRIVATE BANKING (B&PB) ASSET QUALITY B&PB CREDIT IMPAIRMENT CHARGE AND AS % OF GLAS¹ B&PB 90+ DPD AND GIAS AND AS % OF GLAS¹ ($m) 0.22% ($m) 1.32% 0.20% 1.07% 0.95% 0.13% 2,584 0.83% 0.12% 217 2,111 196 1,905 1,662 1,246 119 27 126 21 1,036 955 844 127 20 28 67 63 24 Mar 19 Sep 19 40 170 818 950 1,075 1,338 84 2 5 Mar 19 Sep 19 Mar 20 Mar 20 Sep 20 Sep 20 Business lending Other banking products Housing lending Credit impairment charge as % of GLAS annualised B&PB BUSINESS LENDING SECURITY PROFILE² Housing 90+ DPD and GIAS 90+ DPD and GIAs to GLAS Non-housing 90+ DPD and GIAS B&PB BUSINESS LENDING PORTFOLIO QUALITY 5% 5% 5% 5% 21% 21% 21% 20% 26% 26% 25% 24% 74% 74% 74% 75% 74% 74% 75% 76% Mar 19 Sep 19 Mar 20 Sep 20 ■Fully Secured ■Partially Secured ■ Unsecured Mar 19 Sep 19 ■Sub-Investment grade equivalent Mar 20 Sep 20 ■Investment grade equivalent (1) B&PB credit impairment charges and 90 + DPD and GIAs reflect the total B&PB portfolio including mortgages (2) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security National Australia Bank#61ADDITIONAL INFORMATION AUSTRALIAN HOUSING LENDING National Australia Bank#62KEY METRICS HOUSING LENDING REVENUE HOUSING LENDING NET INTEREST MARGIN ($m) (%) 1,925 1,709 112 1,988 114 2,038 119 122 1,803 1,874 1,919 1,597 1.38% 1.42% 1.34% 1.37% 1.27% 1.30% 1.22% 1.16% Mar 19 Sep 19 ■NII Mar 20 Sep 20 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 HOUSING LENDING GLAS ($bn) INVESTOR AND OWNER OCCUPIER GROWTH MOM' 1% 0% -1% 303.1 306.8 304.0 302.4 299.1 -2% Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 20 -Investor growth MoM Owner Occupier growth MoM (1) Only includes housing loans to households based on APRA ARF 720.1 reporting definitions. Dec 16 to Mar 19 inclusive chart is prepared using APRA Monthly Banking Statistics. Jun 19 to Sep 20 inclusive are prepared using APRA Monthly Authorised Deposit-taking Institution Statistics 62 69 National Australia Bank#63HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING BY CHANNEL' ($bn) HOUSING LENDING FLOW MOVEMENTS¹ 63 ($bn) 37 (3) (16) (21) 104.0 103.8 101.9 111.6 112.5 113.0 302 88.3 86.1 84.2 299 Sep 19 Mar 20 Sep 20 Sep 19 Mar 20 Sep 20 Sep 19 Mar 20 Sep 20 Mar 20 New fundings Interest & Pre- & redraw Repayments payments External refinance Sep 20 & closures ■Retail and UBank Broker and Advantedge ■Business and Private HOUSING LENDING VOLUME BY BORROWER AND REPAYMENT TYPE² Owner Occupier 60.1% Owner Occupier Interest Only, 3.9% Investor Interest Investor Only, 13.1% Principal & Interest, 26.8% (1) (2) Owner Occupier Principal & Interest, 56.2% Investor 39.9% AUSTRALIAN MORTGAGES STATE PROFILE VIC/TAS 32% NSW/ACT 40% Excludes Asia Only includes housing loans to households based on APRA ARF 720.1 reporting definitions, and excludes counterparties such as private trading corporations QLD 15% WA 8% SA/NT 5% National Australia Bank#64HOUSING LENDING PORTFOLIO PROFILE HOUSING LENDING 90+DPD & GIAS AS % OF GLAS 90+ DPD & GIAS AS % OF TOTAL HOUSING LENDING GLAS - BY CHANNEL 64 2.5% 2.0% 1.5% 1.0% 0.5% 2.38% 1.6% 1.42% 1.2% 1.28% 1.24% 0.8% 1.13% 1.11% 0.4% 0.0% Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 0.0% Sep 19 Sep 20 -NSW/ACT QLD SA/NT VIC/TAS WA -Total REPAYMENT BUFFERS¹ Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 20 Broker Proprietary INTEREST ONLY CONVERSIONS TO P&I ($bn) 60% 50% 40% 36% 31% 30% 9.9 9.7 9.9 9.2 8.7 7.9 7.6 2.0 1.5 2.1 6.8 3.8 2.3 5.9 1.6 1.4 2.4 1.1 20% 15% 15% 13% 12% 16% 15% 15% 7.9 8.2 7.8 13% 6.4 6.3 7% 7% 5.4 5.5 10% 4.8 5.1 3% 2% 0% > 2 years 1-2 years 3-12 months 1-3 months <1 month On time Behind 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 ■Sep-19 Sep-20 (1) Represents payments in advance by accounts. Includes offsets. Excludes Advantedge book and line of credit ■Contractual conversion ■Early conversion National Australia Bank#65HOUSING LENDING PORTFOLIO QUALITY DYNAMIC LVR BREAKDOWN OF DRAWN BALANCE LVR BREAKDOWN AT ORIGINATION 65 60% 50% 40% 30% 20% 10% Sep 20 Dynamic LVR 45.5% 60% 50% 40% 30% 20% 10% 0% 0% LVR ≤60% LVR LVR 60.01%-70% 70.01%-80% LVR 80.01% - 90% LVR >90% LVR ≤60% LVR LVR 60.01% 70% 70.01% - 80% LVR 80.01% - 90% LVR >90% ■ Feb 19 ■Sep 19 ■Mar 20 ■Sep 20 ■ Feb 19 ■Sep 19 ■ Mar 20 Sep 20 National Australia Bank#66HOUSING LENDING PRACTICES & REQUIREMENTS KEY ORIGINATION REQUIREMENTS Income Household expenses Serviceability Existing debt • 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) 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 Assess customers' ability to repay based on the higher of the customer rate plus serviceability buffer (2.5%) or the floor rate (5.5%) • 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 (5.5%) 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 LOAN-TO-VALUE RATIO (LVR) LIMITS Principal & Interest - Owner Occupier Principal & Interest - Investor Interest Only - Owner Occupier 95% 90% 80% 90% 80% 'High risk' postcodes (e.g. mining towns) 70% Interest Only - Investor 'At risk' postcodes • • • OTHER REQUIREMENTS 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 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 66 National Australia Bank#67HOUSING LENDING KEY METRICS¹ Australian Housing Lending Total Balances (spot) $bn Average loan size $'000 Variable rate Fixed rate Mar 19 Sep 19 Mar 20 Sep 20 Sep 19 Mar 20 Sep 20 Drawdowns² 307 304 302 299 22 27 29 307 308 309 309 369 389 383 72.0% 73.5% 75.9% 71.9% 73.0% 78.5% 64.0% 21.6% 20.4% 18.3% 22.8% 25.0% 20.4% 35.0% 6.5% 6.1% 5.8% 5.3% 1.9% 1.1% 1.1% Line of credit By borrower type Owner Occupied³,4 59.7% 56.9% 58.4% 60.1% 66.3% 67.7% 70.1% Investor³,4 40.3% 43.1% 41.6% 39.9% 33.7% 32.3% 29.9% By channel - Proprietary Broker Interest only5 Low Documentation Offset account balance ($bn) 63.6% 63.3% 62.8% 62.2% 56.6% 54.6% 53.1% 36.4% 36.7% 37.2% 37.8% 43.4% 45.4% 46.9% 22.4% 19.8% 17.2% 14.8% 19.7% 17.4% 17.9% 0.5% 0.4% 0.4% 0.4% 29.0 29.0 30.0 32.6 LVR at origination 69.0% 69.0% 69.1% 69.2% Dynamic LVR on a drawn balance calculated basis 48.0% 47.6% 44.6% 45.5% Customers in advance ≥1 month (including offset facilities) 65.5% 66.1% 66.5% 69.9% Avg # of monthly payments in advance (including offset facilities) 33.7 34.3 36.3 43.4 90+ days past due 0.86% 0.98% 1.04% 1.18% Impaired loans 0.09% 0.11% 0.12% 0.10% Specific provision coverage ratio 31.1% 33.4% 33.3% 35.4% Loss rate? 0.02% 0.02% 0.02% 0.02% Number of properties in possession³ 291 320 268 155 HEM reliance 32% 27% 33% 33% (1) Excludes Asia (5) Excludes line of credit products (2) Drawdowns is defined as new lending excluding limit increases and redraws in the previous six month period (3) Portfolio sourced from APRA Monthly Banking Statistics, Sep-19 restated to align with definitions of the APRA Monthly Authorised Deposit-taking Institution Statistics (6) Excludes Advantedge and line of credit (7) 12 month rolling Net Write-offs / Spot Drawn Balances (8) (4) Drawdowns sourced from management data Reduction in properties in possession in Sep 20 reflects pause in legal activity due to COVID-19 National Australia 67 Bank#68ADDITIONAL INFORMATION OTHER AUSTRALIAN PRODUCTS National Australia Bank#6969 DEPOSITS & TRANSACTION ACCOUNTS DEPOSIT REVENUE ($m) CUSTOMER DEPOSITS BY INTEREST RATE¹ (%) 1,723 27 1,762 28 100 1,700 28 1,623 27 1,541 80 24 60 60 1,696 1,733 1,672 1,596 40 1,517 40 20 20 $175bn of deposits already at or near zero interest rate $83.6bn $90.9bn $61.6bn $34.0bn $55.6bn $42.5bn 0 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 less than between 0.01% ■ NII 0.01% to 0.25% between 0.26% to 0.50% between 0.51% to 0.75% between 0.76% to 1.00% more than 1.00% CUSTOMER DEPOSIT BALANCES BY PRODUCT ($bn) 121 111 84 90 8 88 95 95 46 97 109 142 129 120 108 32 17 Mar 19 19 22 29 29 29 30 333 Sep 19 Mar 20 Sep 20 Mar 19 Sep 19 Mar 20 Sep 20 Mar 19 Sep 19 Mar 20 Sep 20 Mar 19 ■NBIS ■Transaction ■Savings Sep 19 ■Term Deposits Mar 20 Sep 20 Mar 19 Sep 19 Mar 20 Sep 20 ■ Offsets (1) Australia only, as at 30 September 2020. Customer deposits exclude home loan offsets National Australia Bank#70OTHER BANKING PRODUCTS PERSONAL LENDING BALANCE AND MARKET SHARE¹ ($bn) 10.3% 9.9% 9.3% 9.2% CARDS BALANCE AND MARKET SHARE3,4 ($bn) 13.4% APRA methodology i change² 13.3% 13.2% 13.2% 1.7 1.5 19 6.1 5.7 5.4 4.4 1.4 1.1 Mar 19 Sep 19 Mar 20 Sep 20 Mar 19 Sep 19 Mar 20 Sep 20 Personal Lending Market share Cards Market share CARDS³ 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% 1.17% 1.10% 1.13% 1.16% 1.2% 1.0% 92 80 77 64 0.8% 0.6% Mar 19 Sep 19 Mar 20 Sep 20 Mar 17 Sep 17 Mar 18 90+ DPD 90+ DPD/GLAS -NSW/ACT QLD Sep 18 SA/NT Mar 19 Sep 19 VIC/TAS Mar 20 Sep 20 WA -Total (1) Personal Loans market share is based on RFI peer group benchmarking and includes secured and unsecured loans. Market share as at Aug 20 (2) APRA Monthly Banking Statistics is used for Mar-19 market share. Sep-19 onwards is prepared using APRA Monthly Authorised Deposit-taking Institution Statistics. Latest market share statistics are as at Sep 20 (3) Includes consumer and commercial cards (4) Market share refers to consumer cards only 70 National Australia Bank#71ADDITIONAL INFORMATION NEW ZEALAND BANKING National Australia Bank#72KEY CUSTOMER METRICS BNZ SME NPS1,3 25 15 5 -5 -15 -25 -3 -17 -19 -20 -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 BNZ Peer 1 Peer 2 Peer 3 BNZ CONSUMER NPS2,3,4 GOGSUNGA 15 10 40 35 30 25 20 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 72 BNZ -Peer 1 (1) Source: Kantar Business Finance Monitor (data on 4 quarter roll) (2) (3) Peer 2 Peer 3 Peer 4 Source: Camorra Retail Market Monitor (data on 12 month roll) for Consumer Priority segments which include Savers and Starters, Home Owners, Investors & High Net Worth clients 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) Due to a change in Retail Market Monitor methodology, there has been a re-set of strategic NPS for the consumer market for all five major banks. The use of a 12 month rolling average in BNZ reporting has smoothed the transition (we are using data that was collected in parallel from May 2019 to September 2019), but there is a methodology-driven increase in NPS for all banks visible during this period of transition. The new methodology has been fully embedded since October 2019 39 35 32 22 14 National Australia Bank#73HOUSING LENDING KEY METRICS New Zealand Housing Lending Total Balances (spot) NZ$bn By product - Variable rate Mar 19 Sep 19 Mar 20 Sep 20 Sep 19 Mar 20 Sep 20 Portfolio Drawdowns¹ 41.3 43.0 44.8 46.0 5.8 5.8 5.1 17.7% 15.9% 15.2% 14.1% 15.4% 15.4% 15.1% - Fixed rate 79.7% 81.7% 82.6% 84.1% 84.0% 84.0% 84.6% - Line of credit 2.6% 2.4% 2.2% 1.8% 0.6% 0.6% 0.3% By borrower type Owner Occupied 65.4% 66.2% 66.4% 66.0% 72.0% 70.2% 64.5% - Investor 34.6% 33.8% 33.6% 34.0% 28.0% 29.8% 35.5% By channel - Proprietary 82.3% 80.0% 77.9% 76.2% 72.9% 70.8% 68.8% - Broker 17.7% 20.0% 22.1% 23.8% 27.1% 29.2% 31.2% Low Documentation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest only² 21.4% 20.4% 24.4% 25.5% 25.3% 29.2% 28.2% LVR at origination 66.3% 66.5% 66.7% 66.8% 90+ days past due 0.10% 0.07% 0.11% 0.13% Impaired loans 0.04% 0.03% 0.03% 0.02% Specific Impairment coverage ratio 17.9% 17.0% 25.50% 26.3% Loss rate³ 0.01% 0.01% 0.01% 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 73 National Australia Bank#74NEW ZEALAND LENDING MIX PORTFOLIO BREAKDOWN - TOTAL NZ$88.1BN MORTGAGE PORTFOLIO BREAKDOWN BY GEOGRAPHY - TOTAL MORTGAGE NZ$46.OBN 74 Commercial Real Estate 9% Agriculture, Forestry and Fishing 17% Retail and Wholesale Trade 4% Manufacturing. 4% Other Commercial Personal Lending 2% 12% Mortgages 52% Canterbury 12% Auckland 48%. Wellington 11% Waikato 7% Bay of Plenty 6% Other 16% AGRIBUSINESS PORTFOLIO BREAKDOWN BY INDUSTRY - TOTAL AGRI NZ$14.9BN Dairy 48% Drystock 21% Forestry 5% Kiwifruit 7% Other 13% Services to Agriculture 6% National Australia Bank#75NZ CUSTOMER DEPOSITS BY INTEREST RATE NZ CUSTOMER DEPOSITS BY INTEREST RATE (NZD) $28.9bn of deposits already at or near zero interest rate 75 $14.0bn $14.9bn $27.0bn $7.9bn $0.9bn $0.7bn less than 0.01% between 0.01% to 0.25% between 0.26% to 0.50% between 0.51% to 0.75% between 0.76% to 1.00% more than 1.00% National Australia Bank#76ADDITIONAL INFORMATION GROUP ASSET QUALITY National Australia Bank#77GROUP CREDIT IMPAIRMENT CHARGE CREDIT IMPAIRMENT CHARGE AS % OF GLAS 1.4% GFC 1.2% 1.0% 0.8% 0.6% 0.46% 0.4% 0.2% Late 80's/Early 90's Recession 0.0% Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 77 CREDIT IMPAIRMENT CHARGE AND AS % OF GLAS¹ ($m) 0.38% 0.54% 0.31% 0.18% 0.12% 0.16% 0.13% 0.14% 0.16% 0.14% 0.15% 0.13% 0.14% 0.15% 0.16% 1,601 1,161 722 426 299 399 349 375 425 394 416 373 406 449 470 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 (1) Ratios for all periods refer to the half year ratio annualised National Australia Bank#78GROUP ESTIMATED LONG RUN LOAN LOSS RATE 1985 TO 2020 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% 2020 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 2020 business mix 0.25% Commercial 41% Group average4 based on 2020 business mix excluding 1991-1993 and 2008-2010 0.18% 78 (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 - 2019) and NAB's Annual Financial Reports (1985 - 2006). 2020 net write off rates is based on NAB unaudited results (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 30 September 2020. Commercial long run average net write off rate has been applied to acceptances National Australia Bank#79GROUP LENDING MIX 79 GROSS LOANS AND ACCEPTANCES BY PRODUCT Housing loans. 58% (1) Based on booking office where transactions have been recorded Other term lending 38% Asset & lease financing 2% GROSS LOANS AND ACCEPTANCES BY GEOGRAPHY¹ Other International. 3% New Zealand 14% Australia 83% Overdrafts 1% GROSS LOANS AND ACCEPTANCES BY BUSINESS UNIT Other New Zealand Banking. 1% Credit card outstandings 1% 14% Corporate & Institutional Banking 16% Business & Private Banking 33% Personal Banking 36% National Australia Bank#80GROUP PROVISIONS COLLECTIVE PROVISION BALANCE ($m) 80 80 4,401 337 56 3,360 3,249 3,054 177 161 134 65 73 80 4,008 3,118 3,015 2,840 SPECIFIC PROVISIONS ($m) 5,536 299 46 45.8% 44.4% 45.0% 40.6% 39.7% 827 840 782 717 5,191 675 125 115 98 87 87 684 702 725 630 588 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 ■ Amortised Loans ■Fair Value Loans ■Fair Value Derivatives Business Retail Specific Provision Coverage National Australia Bank#81ECL PROVISIONING BY STAGES LOANS AND ADVANCES¹ ($bn) PROVISIONS BY STAGE² 81 PROVISION COVERAGE BY STAGE3 ($m) (%) 0.77 6,011 0.47 0.51 751 771 783 6 7 9 1,644 115 120 205 3,900 3,513 19.0 19.2 17.4 1,064 1,305 630 644 3,897 569 2,125 2,227 1.85 1.90 1.85 0.56 0.33 0.34 324 368 470 0.05 0.06 0.08 Sep 18 Sep 19 Sep 20 Sep 18 Sep 19 Sep 20 Sep 18 Sep 19 Sep 20 Stage 1 (12 month ECL) ■Stage 2 (Lifetime ECL) ■Stage 3 (Lifetime ECL) • 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 (SICR) 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 expected credit loss model (2) Excludes Collective Provision on loans at fair value and derivatives which are not allocated to a stage under the Expected Credit Loss (ECL) model (3) Provision coverage: provisions as a percentage of loans and advances including contingent liabilities and credit-related commitments National Australia Bank#82PROBABILITY OF DEFAULT (PD) ANALYSIS NON RETAIL CORPORATE EAD¹ BY PROBABILITY OF DEFAULT ($bn) 120 100 Investment grade 58% Sep 20 Sub investment grade 41% Sep 20 Default 1% Sep 20 80 60 40 20 0 0<0.03% 0.03<0.11% 0.11<0.55% 0.55<2.00% 2.00<5.01% 5.01<99.99% 100% ■Sep 19 ■Mar 20 ■Sep 20 AUSTRALIAN AND NEW ZEALAND BUSINESS EXPOSURES PD ≥ 2% 27% 26% 23% 20% 17% 14% 15% 14% 13% 13% 13% 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 (1) For internal ratings based portfolios. Excluding Bank and Sovereign exposures. Total $266bn at Sep-20, $283bn at Mar-20, $262bn at Sep-19 Sep 20 82 National Australia Bank#83BUSINESS LENDING CONSIDERATIONS NON RETAIL EAD BY INDUSTRY¹- $490BN Finance & insurance Commercial property 15% Govt & public utilities 13% Agri, forestry & fishing 10% Transport & storage 6% Other inc Health, Education, Community 5% Business & property services 5% Manufacturing 4% Wholesale trade 3% Utilities 3% Retail Trade 3% Construction 2% Accommodation & Hospitality 2% Mining 2% (1) Industry classifications are aligned to those disclosed in the 30 September 2020 Pillar 3 report - Table 5.1D (2) Performing reflects all exposures except those which are 90+ days past due or Impaired 83 Performing² 27% 99.96% 99.57% 100.00% 98.90% 99.49% Includes assets 99.61% supporting the Group's LCR 99.11% 99.04% 99.45% 100.00% 98.42% 99.05% 98.79% 99.29% National Australia Bank#84GROUP AGRICULTURE, FORESTRY & FISHING EXPOSURES GROUP EAD $47.7BN SEPTEMBER 2020 Australia 67% New Zealand 33% AUSTRALIAN DROUGHT CONSIDERATIONS • Most drought-affected regions have seen good rainfall throughout 2020, which has improved the outlook for the sector • Asset quality remains sound, noting that the sector faces some uncertainty due to of falling commodity prices and the potential impact from geopolitical tensions • NAB continues supporting farming customers through disaster relief packages and a moratorium on branch closures in affected regions • Collective provision forward looking adjustment reduced by $91m to $89m at 30 September 2020, reflecting easing of drought conditions for the bulk of exposures AUSTRALIAN AGRICULTURE, FORESTRY & FISHING Diverse Portfolio EAD $31.8bn September 2020 84 Other Crop & Grain 7% Grain 11% Dairy 5% Cotton 5% Vegetables 3% Beef 20% Forestry & Fishing 3% Services 9%. Mixed 24%/ Australian Agriculture Asset Quality Australian Agriculture Portfolio Well Secured¹ ($m) 0.44% 0.46% 0.49% 0.48% Fully Secured 85% 0.43% Sheep/Beef 7% 118 120 132 146 153 Sheep 3% Other Livestock 2% Poultry 1% Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 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#85COVID-19 SECTORS OF INTEREST KEY CONSIDERATIONS • Continued close monitoring of exposures to sectors significantly impacted by COVID-19 EAD broadly stable vs 1H20 Asset quality deterioration worse than overall portfolio Additional FLAs vs 1H20 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 BOOK Sector of interest FLAs % of total FLAS 81% 90+ DPD & GIA % of EAD 0.57% 0.64% 0.66% 0.69% 34% Sectors of interest Total book ■Mar 20 ■Sep 20 ■Mar 20 ■Sep 20 KEY METRICS SUMMARY EAD $bn % of 90+DPD and GIA to EAD Target sector FLAs $m Mar 20 Sep 20 Mar 20 Sep 20 Mar 20 Sep 20 Retail trade 14.6 14.5 1.45 1.58 134 139 Tourism, hospitality and 13.6 14.1 1.13 1.07 NIL 133 entertainment¹ Air travel and related services 11.7 11.3 0.40 0.43 NIL 372 Office, retail, tourism and leisure 42.0 41.9 0.14 0.22 CRE2 91 190 Total 81.9 81.8 0.57 0.64 225 834 (1) Tourism, hospitality and entertainment include regulatory industry classification of accommodation and hospitality, plus cultural and recreational services (2) 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 85 National Australia Bank#86RETAIL TRADE! EXPOSURE AT DEFAULT EAD $14.6bn 2.2 3.9 8.5 EAD $14.5bn EAD $14.5bn 2.1 3.8 8.6 6.6 KEY CONSIDERATIONS ~3% of non retail EAD • Retail Trade portfolio experience is mixed: ~46% is non- discretionary retail and likely to be less impacted • Household consumption growth was already at slowest pace since 1990s recession pre COVID-19 • Provisioning includes $139m target sector FLA Personal & Household Goods includes: Pharmacy Retailers (41%), Apparel (13%), Furniture & Homewares (19%) Department store exposure ~$140m 90+ DPD AND GIAS AND AS % OF SECTOR EAD 7.9 • • ■B&PB C&IB ■NZ ■B&PB C&IB ■ NZ ■Non-Discretionay ■Discretionary Mar 20 Sep 20 EAD PORTFOLIO BY SECTOR AND SECURITY2 Personal & Household Goods Food 22% 52% Partially secured 45% ($m) 1.97% 1.97% 1.58% 1.45% 1.06% Motor Vehicles Fully secured 45% Unsecured 10% 295 293 26% 212 229 151 Sep 18 Mar 19 190+ DPD & GIAS Sep 19 Mar 20 Sep 20 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 $13.6bn EAD $14.1bn 2.0 1.9 5.5 6.1 6.1 6.1 KEY CONSIDERATIONS • ~3% of non retail EAD • Industry outlook uncertain, with credit outcomes likely to be dependant on specific client-level circumstances including location and target market. Industry facing both short term impacts of COVID-19 restrictions on operations and capacity, and potential longer term structural change • Extent of COVID-19 impacts dependent on location; for B&PB exposures³: • 13% in CBD ■B&PB C&IB ■NZ ■B&PB C&IB ■NZ Mar 20 Sep 20 EAD PORTFOLIO BY SECTOR AND SECURITY2 • 23% in Victoria • Collective provision coverage includes $133m of forward looking adjustments 90+ DPD AND GIAS AND AS % OF SECTOR EAD Pubs, Taverns & Accomodation 44% Bars 15% Others 41% ($m) Partially secured 23% 1.15% 1.13% 0.88% 0.97% 1.07% Fully secured 69% 157 121 138 153 152 Unsecured 8% Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 90+ DPD & GIAS as % EAD (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 $11.7bn 0.5 EAD $11.3bn 0.7 . 10.9 10.3 0.3 0.3 ■ B&PB ■C&IB ■ NZ ■ B&PB ■ C&IB ■ NZ Mar 20 Sep 20 EAD PORTFOLIO BY SECTOR AND SECURITY¹ • • KEY CONSIDERATIONS ~2% of non retail EAD Ongoing disruption caused by COVID-19 related travel restrictions, with length and severity unknown Portfolio comprises of airlines which are usually national carriers and sovereign owned, airports, lessors and service companies supporting the aviation industry EAD reduction driven by FX movements partially offset by liquidity support provided to domestic airports Customer re-rating resulted in the Investment Grade proportion of the total portfolio decreasing from 82% to 50% over 2H20 Collective provision coverage now includes $372m for the Aviation portfolio raised in 2H20 90+ DPD AND GIAS AND AS % OF SECTOR EAD Aircraft leasing Service to Air Transport 31% 30% Air Transport 39% ($m) 0.46% 0.45% 0.43% 0.40% Partially secured 41% 0.16% 49 47 47 48 Fully secured 53% Unsecured 6% 16 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 as % EAD 90+ DPD & GIAS (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 KEY CONSIDERATIONS Limit utilisation ~85% $36.5bn $35.5bn 1.8 1.9 17.5 16.7 17.2 ■Tourism & Leisure ■Retail ■ Office Mar 20 PORTFOLIO CHARACTERISTICS¹ Geographic breakdown WA 4% Qld 14% SA 7% 16.9 ■Tourism & Leisure ■Retail ■ Office Sep 20 Portfolio security² • Office, Retail and Tourism & Leisure CRE viewed as most impacted parts of the Group CRE portfolio by COVID-19 • Borrower breakdown: Investor 96%, Developer 4% • 90+ DPD and impaired assets collectively represent 0.22% ($91m) of limits, up from 0.14% at Mar 20 • Collective provision FLA increased by $99m to $190m³ • Retail, Tourism & Leisure face near term challenges related to lock-down and travel restrictions. A higher incidence of P&I deferral was observed for Australian Tourism & Leisure exposures relative to the broader Australian CRE portfolio • Office faces more medium term uncertainties, dependent on timing and level of return to work and ultimate demand • ~50% of Australian portfolio is CBD based New Vic 25% Zealand 11% Fully secured 89% . Partially secured 5% NSW 33% Other 6% Unsecured 6% ~60% of the Australian Corporate & Institutional Banking portfolio secured by premium and A-Grade offices (1) Measured as balance outstanding as at 30 September 2020 per APRA Commercial Property ARF230 definitions (2) Fully Secured is where the loan amount is less than 100% of the bank extended value of security; Partially Secured is where the loan amount is greater than 100% of the bank extended value of security; Unsecured is where no security is held and/or no value held against the security and negative pledge arrangements are normally in place. Bank extended value is calculated as a discount to market value based on the nature of the underlying security. Unsecured proportion represents Institutional exposures that are weighted towards listed A-REITs and wholesale funds which are lowly geared and exhibit strong debt servicing. 89 (3) FLAs relate to the whole CRE portfolio with Office, Retail, Tourism and Leisure CRE most impacted by COVID-19 stress National Australia Bank#90GROUP COMMERCIAL REAL ESTATE¹ GROSS LOANS & ACCEPTANCES ASSET QUALITY Aust New Zealand Other International Total Trend Mar 19 Sep 19 Mar 20 Sep 20 TOTAL CRE (A$bn) 51.2 7.5 0.1 58.8 Increase/(decrease) on Impaired loans ratio 0.22% 0.25% 0.26% 0.32% (2.0) September 2019 (A$bn) (0.7) (2.7) % of geographical GLAS 10.3% 9.1% 0.3% 9.9% Specific Provision Coverage 34.4% 31.9% 32.2% 39.9% Change in % on September 2019 (0.3%) (0.9%) (0.2%) (0.3%) BALANCES OVER TIME 17.1% 11.6% 11.3% 10.2% 9.9% 75 62 61 62 59 Sep 09 Sep 13 Sep 16 Group CRE $bn Sep 19 Group CRE % of Group GLAS (1) Measured as balance outstanding as at 30 September 2020 per APRA Commercial Property ARF 230 definitions 90 90 Sep 20 National Australia Bank#91GROUP COMMERCIAL REAL ESTATE¹ BREAKDOWN BY GROSS LOANS & ACCEPTANCES 91 Geographic breakdown QLD 13% WA VIC 6% 25% Other Australia 10% Investor 90% NSW 33% New Zealand 13% Other international 0.1% Borrower breakdown (1) Measured as balance outstanding as at 30 September 2020 per APRA Commercial Property ARF 230 definitions Retail 29% Tourism Developer 10% & Leisure ✓. 3% Sector breakdown Residential 11% Industrial 17% Other 7% Office 29% -Land 4% National Australia Bank#92AUSTRALIAN COMMERCIAL REAL ESTATE AUSTRALIAN COMMERCIAL REAL ESTATE (CRE) PORTFOLIO¹ 92 ($bn) 10.6% 10.5% 10.2% 9.9% 9.9% 54.0 54.6 53.2 52.3 51.2 47.1 48.6 48.0 47.3 46.6 6.9 6.0 Sep 18 Mar 19 Investor 5.2 Sep 19 5.0 Mar 20 Developer Group CRE as a % of Group GLAS 4.6 Sep 20 • • AUSTRALIAN CRE RESIDENTIAL DEVELOPER Developer drawn balance includes $1.1bn for land development and $2.0bn for residential development Residential development apartment exposure² ~11% lower since September 2019, however marginally higher (~7%) on March 2020 • ~95% of apartment developer exposure amortises within 2 years² NSW and VIC account for ~75% of apartment developer exposure² Inner city postcodes² account for ~26% of total residential apartment developer exposure • No material settlement defaults have impacted the scheduled repayment of apartment development exposures during 2H20 (1) Measured as drawn balance outstanding per APRA Commercial Property ARF 230 definitions (2) Transactions >$2m (limit), including those that are well advanced but yet to draw-down. Inner-City includes CBD and adjoining postcodes, along with Waterloo/Zetland in Sydney. Greater Brisbane and Greater Perth based on Greater Capital City Statistical Area as defined by ABS National Australia Bank#93ADDITIONAL INFORMATION CAPITAL & FUNDING National Australia Bank#94CAPITAL AND RWA MOVEMENTS GROUP RWA ($bn) 94 432.7 (10.6) (0.6) 2.6 1.0 CREDIT RWA ($bn) 364.6 425.1 (0.6) 0.4 1.8 (3.7) (8.5) 354.0 Mar 20 Credit Risk Operational Risk Market Risk IRRBB Sep 20 Mar 20 Volume Model and Methodology Credit Quality and Portfolio Mix Derivatives Translation and FX Repurchase Agreements Sep 20 GROUP CET1 ($bn) GROUP CET1 RATIO (%) 10.6 ༡. སུ ས་ ས་ སུ་ 10.2 10.0 10.4 48.8 45.0 43.1 10.2 41.9 39.6 39.8 9.7 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 10.4 11.6 11.5 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 National Australia Bank#9595 95 GROUP BASEL III CAPITAL RATIOS 19.77% 16.84% 14.34% 22.25% 19.66% 17.97% 16.33% 15.80% 14.35% 16.62% 14.68% 14.61% 13.20% 12.36% 11.96% 11.47% 10.38% 10.39% Sep 19 APRA Common Equity Tier 1 ratios APRA to Internationally Comparable CET1 Ratio Reconciliation Mar 20 Sep 20 APRA Tier 1 ratios APRA Total Capital ratios Equivalent Internationally Comparable ratios¹ CET1 Group CET1 ratio under APRA 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 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 11.47% +84bps +165bps +31bps +153bps 15.80% National Australia Bank#9696 96 KEY REGULATORY CHANGES IMPACTING CAPITAL AND FUNDING REGULATORY CHANGE DATES Change Original date Amended date APS 110 Capital Adequacy 1 Jan 2022 1 Jan 2023 APS 111 Measurement of Capital 1 Jan 2021 1 Jan 20221 APS 112 Capital Adequacy: Standardised Approach to Credit 1 Jan 2022 1 Jan 2023 Risk APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk 1 Jan 2022 1 Jan 2023 1 Jan 2021 (AMA banks) 1 Jan 2023 APS 116 Capital Adequacy: Market Risk 1 Jan 2023 1 Jan 2024 APS 117 Capital Adequacy: Interest 1 Jan 2022 1 Jan 2023 Rate Risk in the Banking Book APS 330 Public Disclosures 1 Jan 2022 1 Jan 2023 DEFERRAL OF REGULATORY CHANGE • APRA has deferred its scheduled implementation of the Basel Ill reforms in Australia by one year, consistent with international implementation • The deferral supports ADIs in maintaining operations and supporting customers in response to COVID-19 • APRA has reiterated its view that ADIs currently hold sufficient capital to meet the new requirements NAB remains committed to progressing APRA's regulatory change agenda APRA'S GUIDANCE ON CAPITAL MANAGEMENT • . On 7 April 2020, APRA announced its expectation that ADIs will seriously consider deferring decisions on the appropriate level of dividends until the outlook is clearer Subsequently on 29 July 2020, APRA has advised that it expects that ADIs will retain at least half of their earnings for 2020 • APRA has also confirmed that ADIs should utilise management buffers and stress testing to inform its capital management actions, and actively use capital management initiatives to at least partially offset any diminution in capital from distributions Loss Absorbing Capacity (1) While not announced, APS111 expected to be delayed until January 2022 1 Jan 2024 No change National Australia Bank#9746 97 LOSS ABSORBING CAPACITY LOSS ABSORBING CAPACITY • In July 2019, APRA announced a 3% increase to the Total Capital requirement for all domestic systemically important banks (D-SIBS) by 1 January 2024 . Based on NAB's 30 September 2020 RWA of A$425bn, this represents an incremental Group Total Capital requirement of approximately A$6.7bn prior to January 2024 APRA CHANGES TO MAJOR BANKS' CAPITAL STRUCTURES Total Capital 16.6% Total Capital 14.5% T2, 3.42% Capital surplus1 2, 3.0% AT1, 1.74% Total Capital 17.5% Capital surplus1 2, 3.0% CCB³, 3.5% Sep 20 ($bn) Group RWA 425.1 T2 Requirement (5% by Jan-24) Existing Tier 2 Capital (3.42%)4 21.3 14.5 Current Shortfall 6.8 • In FY20 NAB issued $5.3bn of Tier 2 • FY21 Tier 2 issuance expected to be ~$5bn CCB³, 3.5% T2, 5.0% T2, 2.0% AT1, 1.5% CET1, 11.47% AT1, 1.5% CET1, 4.5% CET1, 4.5% Current Requirements NAB Sep 2020 NAB TIER 2 MATURITIES (TO FIRST CALL) ($bn) Jan 2024 Requirements 6.7 . 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 1.1 0.1 1.4 1.0 1.0 FY21 FY22 FY23 FY24 FY25 FY26 >FY26 (1) Capital surplus of 3% is generally higher than the normal level for D-SIBS, as a result of the 'unquestionably strong' capital benchmarks (2) Excludes any Pillar 2 requirements and additional 1%-2% RWA requirement through "feasible alternative methods" (3) CCB is the Capital Conservation Buffer (4) Includes $2.0bn provisions eligible for inclusion in Tier 2 Capital National Australia Bank#98FUNDING PROFILE GROUP STABLE FUNDING INDEX (SFI) 98 AUSTRALIAN CORE FUNDING GAP2 ($bn) APRA Methodology Change¹ 260 101% 240 86% 90% 91% 93% 93% 23% 220 20% 20% 22% 24% 23% 200 66% 70% 69% 69% 70% 78% 180 160 Sep 12 Sep 14 Sep 16 Sep 18 ■Customer Funding Index Sep 19 Sep 20 140 Sep 17 Mar 18 Sep 18 Mar 19 ■Term Funding Index 1 Sep 19 NAB Peer 1 Peer 2 Mar 20 Peer 3 Sep 20 DEPOSIT GROWTH ($bn) Business & Private Banking Personal Banking New Zealand Banking Corporate & Institutional Banking Corporate Functions 3.5 10.6 | 0.1 & Other 12 months to 30 September 2020 13.6 15.8 DEPOSIT PORTFOLIO ($bn) 468 408 409 425 72 47 51 54 200 195 211 261 161 163 Sep 17 Sep 18 ■ Term Deposits Deposits Not Bearing Interest 160 Sep 19 135 Sep 20 ■ On Demand and Savings Deposits (1) The Term Funding Index includes Term Funding Facility (TFF) drawdowns. (2) 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 Sep 17 to Mar 19. Apr 19 onwards is prepared using APRA Monthly Authorised Deposit-taking Institution Statistics as at September 2020 National Australia Bank#99ASSET FUNDING FUNDED BALANCE SHEET¹ $782bn $782bn Liquid Assets4, 22% Other Short Term Assets 5, 2% Short Term Wholesale, 11% Term Wholesale Funding <12 Months, 5% Other Deposits3, 5% Business and Other Lending6, 32% Housing Lending, 43% Other Assets7, 1% Assets Stable Customer Deposits², 54% SOURCE AND USE OF FUNDS ($bn) Source of funds 43 6 69 14 16 I 31 Use of funds 4 40 40 Term Funding Facility, 2% Term Wholesale Funding >12 Months, 15% Customer Deposits Equity Lending Term Funding Facility Term Term Wholesale Wholesale Funding Funding Issuance Maturities⁹ Term Equity, 8% Funding 10 Liquids and Short Term Wholesale Other Short Wholesale FX and Term Assets Funding Other 8 12 months to 30 September 2020 (1) Excludes repurchase agreements, trading and hedging derivatives, and any accruals, receivables and payables that do not provide net funding (3) Includes non-operational financial institution deposits and certain offshore deposits (5) Includes trade finance loans (6) Excludes trade finance loans (2) Includes operational deposits, non-financial corporate deposits and retail / SME deposits. Excludes certain offshore deposits (7) Includes net derivatives, goodwill, property, plant and equipment and net of accruals, receivables and payables (8) Includes the net movement of other assets and other liabilities National 99 (4) Market value of liquid assets including HQLA, non-HQLA and securities that are central bank repo- eligible (9) Includes Additional Tier 1 instruments Australia Bank#100100 LIQUIDITY LIQUIDITY COVERAGE RATIO (QUARTERLY AVERAGE) ($bn) 130% LCR 126% LCR 136% LCR 139% LCR 126 85 88 98 73 55 55 54 108 114 112 143 Mar 19 Sep 19 Mar 20 Sep 20 ■Net Cash Outflows ■ ALA ■ HQLA LIQUIDITY OVERVIEW NET STABLE FUNDING RATIO COMPOSITION Group NSFR 127% as at 30 September 2020 $555bn Wholesale Funding & Other Non-Financial $438bn Liquids and Other Assets Corporate Deposits Retail/SME Deposits Other Loans Residential Mortgages <35% RWA Required Stable Funding Capital Available Stable Funding NET STABLE FUNDING RATIO MOVEMENT² Quarterly Average ($bn) High quality liquid assets Mar 19 Sep 19 Mar 20 Sep 20 85 88 98 126 Alternative liquid assets¹ 52 52 51 71 RBNZ Securities 3 3 3 2 Total LCR Liquid Assets 140 143 152 199 Net outflows due to 116 Customer Deposits 72 76 60 80 92 Wholesale funding 15 13 15 15 Other 21 25 Mar 20 17 36 Net cash outflows 108 114 Quarterly average LCR 130% 126% 112 136% 143 139% A TFF Allowance (2) Wholesale funding includes available stable funding benefits from drawn down amounts of the TFF 3.5 (2.3) 0.6 (0.7) 2.9 5.4 1.5 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. Approved CLF of $55.1bn for 2020, $55.9bn for 2019 and $59.3bn for 2018. The average amount of TFF included in the LCR was $20bn for the September Quarter Derivatives & Other Sep 20 National Australia Bank 127#101TERM WHOLESALE FUNDING PROFILE HISTORIC TERM FUNDING ISSUANCE¹ ($bn) 5.4 Tenor2,3,4 4.8 5.2 5.7 6.7 yrs 36 yrs yrs yrs yrs 37 28 26 29 26 30 32 14 23 21 13 6 5 FY16 FY17 5 FY18 5 FY19 2 FY20 ■Secured Senior and Sub Debt CTerm Funding Facility TERM FUNDING MATURITY PROFILE³ 41 WAM 3.2 yrs4 30 28 14 21 25 25 22 25 23 11 20 17 6 5 FY21 5 FY22 5 FY23 4 5 25 FY24 FY25 Beyond ■Secured ■Senior and Sub Debt Term Funding Facility (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 TFF drawdowns 101 National Australia Bank#102DIVERSIFIED AND FLEXIBLE TERM WHOLESALE FUNDING PORTFOLIO FY20 ISSUANCE BY PRODUCT TYPE Subordinated Public 31%, Senior Private Placements 2% Subordinated Private Placements 5% FY20 ISSUANCE BY CURRENCY AUD 31% GBP 13% Secured Public Offshore 13% Senior Public Domestic 18% OUTSTANDING ISSUANCE BY PRODUCT TYPE¹ RMBS 2% Covered 20%. Senior Public Offshore 31% Other 16% OUTSTANDING ISSUANCE BY CURRENCY JPY 3% Senior 70% GBP 3% Other 8% USD 29% Subordinated 8% EUR 24% (1) At 30 September 2020, NAB has utilised 39% of its covered bond capacity. Capacity based on current rating agency over collateralisation (OC) and legislative limit 102 USD 40% AUD 33% National Australia Bank#103TERM DEPOSIT PORTFOLIO COSTS² FUNDING COSTS AND REPLICATING PORTFOLIO INDICATIVE TERM WHOLESALE FUNDING ISSUANCE COSTS¹ 400 (bps) 80 300 200 100 70 70 60 60 60 50 0 Mar 18 Sep 18 Mar 19 3 yr senior 5 yr senior Sep 19 10yr senior Mar 20 Sep 20 10NC5 Tier 2 40 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 DOMESTIC SHORT TERM WHOLESALE FUNDING COSTS³ CAPITAL & DEPOSIT HEDGES - REPLICATING PORTFOLIOS4 Current swap rates ~108bps below portfolio rate Replicating portfolio 30 Sep 20 balance Avg investment term 2 years 5 years $41bn $43bn Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 20 652322 (bps) 60 50 40 % 3.0 2.5 2.0 30 1.5 1.0 10 0.5 Capital 0 Low rate deposits 0.0 -10 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 3M Bills-OIS Spread 90 Day Moving Average Portfolio Rate 3m BBSW (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. Term 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. (4) Blended replicating portfolio earnings rate (Australia only). Replicating portfolio includes capital and non-interest bearing deposits 103 National Australia Bank#104ADDITIONAL INFORMATION ECONOMICS National Australia Bank#105AUSTRALIA AND NZ KEY ECONOMIC INDICATORS AUSTRALIAN ECONOMIC INDICATORS (%)¹ NZ ECONOMIC INDICATORS (%)¹ CY18 CY19 CY20(f) CY21(f) CY22(f) CY18 CY19 CY20(f) CY21(f) CY22(f) GDP growth² 2.2 2.3 -4.7 4.6 2.9 GDP growth² 3.3 1.8 -5.7 3.2 4.2 Unemployment³ 5.0 5.2 7.6 6.9 5.9 Unemployment³ 4.4 4.1 6.6 6.4 4.6 Core Inflation4 Cash rate target³ 1.7 1.4 1.2 1.4 1.7 Inflation4 1.50 0.75 0.10 0.10 0.10 Cash rate (OCR)³ AUSTRALIAN SYSTEM GROWTH (%) 5 1.9 1.9 0.8 0.9 1.6 1.75 1.0 0.25 -0.50 -0.25 NZ SYSTEM GROWTH (%) 5 FY18 FY19 FY20 FY21(f) FY22(f) FY18 FY19 FY20 FY21(f) FY22(f) Housing 5.3 3.0 3.3 0.3 3.2 Housing 6.0 6.5 6.8 4.0 4.0 Personal -1.4 -4.4 -12.5 -1.5 0.0 Personal 4.7 0.1 -11.7 2.0 4.0 Business 4.5 3.3 2.0 1.8 4.2 Business 4.1 4.8 -1.1 -3.0 3.5 Total lending 4.6 2.7 2.0 0.7 3.4 Total lending 5.2 5.6 31 3.1 1.3 3.8 System deposits 2.1 3.8 11.7 0.7 3.4 Household retail deposits 6.9 5.1 9.4 3.0 3.8 105 (1) Sources: ABS, Econdata DX, RBA, RBNZ, Stats NZ, NAB December quarter on December quarter of previous year (2) (3) As at December quarter (4) 2015 December quarter on December quarter of previous year. For Australia, average of trimmed mean and weighted median indices (5) Source: RBA, RBNZ, NAB. Bank fiscal year-ended (September) National Australia Bank#106ACTIVITY IMPACTS OF COVID-19 . • COVID-19 has caused significant disruptions to economic activity and weighed on household and business confidence. The weakness • in activity has been broad-based across the private sector - with an outsized impact on services consumption While Australia has passed the trough in activity and will likely see growth in the September quarter, areas of stress remain Policy support via wage subsidies have been a key support to household income. With spending having been curtailed, the savings rate has increased sharply While unemployment has not risen as sharply as initially feared, broader measures of underutilisation hours and hours worked show a more significant deterioration Fiscal policy will need to play a key role in the low rates environment HOUSEHOLD INCOMES HAVE BEEN SUPPORTED BY POLICY² (%) 15 10 5 0 -5 Non-labour income Income tax Total -10 2006 2009 2012 CONSUMPTION DRIVEN FALL IN OUTPUT¹ (Ppt) (Ppt) -2 420246% -4 -6 -8 GDP Consumption Dwelling Investment Non-mining Investment Mining Investment Public Demand Exports Imports 420246% -2 -4 -6 -8 SUPPORT FOR HOUSEHOLDS HAS SEEN SAVINGS INCREASE³ (%) 15 25 Net Saving Ratio Gross Saving Ratio 10 20 15 5 10 0 5 -5 Labour income 0 Other income payable -10 -5 2015 2018 1990 1994 1998 2002 2006 2010 2014 2018 Source: ABS, NAB. Data shows year-ended contributions to June quarter 2020 (2) Source: ABS, NAB. Year-ended growth. Data to June quarter 2020 (3) Source: ABS, NAB. Data to June quarter 2020 106 National Australia Bank#107107 AUSTRALIA HAS PASSED THE TROUGH IN ACTIVITY GDP TO GRADUALLY RECOVER FROM HERE¹ Dec 19 (%) Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 0.0 -0.3 0.0 0.0 -0.3 -2.0 -4.0 -6.0 -8.0 -10.0 1H20 forecasts Current forecasts -0.4 -1.1 -2.1 -0.6 -3.0 -1.4 -2.3 -4.4 -4.6 -3.3 7.3 -7.2 -8.4 CONFIDENCE AND CONDITIONS STILL BELOW AVERAGE² (Index) 20 10 0 -10 -20 -30 -40 -50 -60 -70 2010 Business Confidence 2012 2014 CAPACITY UTILISATION REMAINS LOW² (%) 82 84 2 2 2 0 % % 0 74 76 Business Conditions N ⚫Quarterly -Monthly 72 70 2016 2018 2020 1989 1993 1997 2001 2005 2009 2013 2017 Source: ABS, NAB. Percentage deviation from December 2019 level. (2) Source: NAB. Data to September 2020 อล National Australia Bank#108ALTHOUGH AREAS OF STRESS REMAIN CHANGE IN CONSUMPTION SPEND BY INDUSTRY¹ (%) 20 0 15 9 7 0 -1 -2 -11 -13 -13 -20 -40 -60 -47 -80 -75 -100 Arts and Recreation Construction Services Retail Trade Health Care and Social Assistance ALL INDUSTRIES Other Services Education and Training Rental, Hiring and Real Estate Services Electricity, Gas, Transport, Postal Administrative Water and and Waste Services Warehousing and Support Services CONSUMER SPEND DATA BY STATE - VICTORIA LAGGING² (1) (2) 108 (%) 25 15 5 -5 -15 NSW QLD SA VIC WA -Total -25 4 18 1 15 29 14 28 11 25 9 23 6 20 4 18 1 15 29 12 26 10 24 Jan Jan Feb Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Aug Aug Sep Oct Oct Chart shows change in consumption spending on same week in the previous year by industry (Week ended 24 October 2020) Chart shows change in consumption spending on same week in the previous year by state (Week ended 24 October 2020) National Australia Bank#109LABOUR MARKET IMPACTS OF COVID-19 UNEMPLOYMENT AND UNDERUTILISATION HAVE RISEN¹ (%) 20 20 UNEMPLOYMENT HAS DETERIORATED ACROSS STATES¹ (%) 9 8 15 7 6 10 5 5 LO 4 Unemployment Rate -Underutilisation Rate NSW SA VIC QLD WA TAS 0 3 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 HOURS WORKED HAVE REBOUNDED IN SOME STATES² (Index) 100 95 90 90 WAGE GROWTH HAS SLOWED SHARPLY3 (%) 4 my 3 Quarterly Year-ended 2 1 NSW VIC QLD SA WA TAS 0 85 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 1997 2000 2003 2006 2009 2012 2015 2018 (3) €23 Source: ABS. Data to September 2020 (2) Source: ABS, NAB. February 2020 = 100, data to September 2020 Source: ABS. Data to June quarter 2020 109 National Australia Bank#110HOUSING MARKET HAS SOFTENED HOUSE PRICE GROWTH HAS SLOWED¹ RENTS GROWTH CONTINUES TO BE WEAK² (%) (%, 6MEA) -Sydney Melbourne Brisbane Perth 25 20 10 15 10 5 5 0 0 -5 -10 -5 -Sydney Brisbane -15 -10 2013 2014 2015 2016 2017 2018 2019 2020 2004 2007 DWELLING INVESTMENT IS FALLING³ ($B) NSW VIC QLD 10 SA WA TAS 8 4 2 2010 Melbourne -Perth 2013 2016 2019 POPULATION GROWTH IS SLOWING4 (%) 7 2.0 1.5 1.0 0.5 0 0.0 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2000 2003 2006 2009 2012 2015 2018 Source: CoreLogic. 6-month-ended-annualised growth. Data to 31 October 2020 (2) Source: ABS (3) Source: ABS. Chain volume measure (reference year 2017-18). (4) Source: ABS. Year-ended growth. Data to Q1 2020 110 National Australia Bank#111SIGNIFICANT POLICY SUPPORT DURING THE PANDEMIC LARGE BUDGET DEFICITS EXPECTED IN THE NEAR TERM¹ (%) 0 Forward Estimates ($B) AUSTRALIA GOVERNMENT DEBT IS AT A LOW STARTING POINT² Japan Italy United States -3 -6 0 France Canada -50 United Kingdom India -100 $ Levels (RHS) -150 % GDP (LHS) 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 CASH RATE AND BOND YIELDS ARE AT LOW LEVELS³ (%) Cash Rate Target 2.0 1.5 10 1.0 0.5 0.0 Jan-19 Apr-19 -3-year AGS 10-year AGS Jul-19 50 50 100 150 200 (%) RBA HAS BEGUN BOND PURCHASES4 Overnight Cash Rate -5-year AGS ($B) 60 60 ༡༧༦༩།༡༢ ༡༩༡༩༡༩༨༧༩)ང་དང་༠༥༢)སྤྱི་ལོམ་ཚ་རྒྱ་ 50 40 40 30 20 20 10 Weekly ⚫Cumulative 0 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 (2) Source: Commonwealth Treasury Source: IMF. Data are for 2019 shown as a share of GDP for each country (3) Source: Macrobond. Data to 3 November 2020 (4) Source: RBA, NAB. Data to 3 November 2020 111 National Australia Bank#112GLOBAL RECOVERY UNDERWAY CHINA'S RECOVERY OVER Q2 AND Q3¹ (% yoy) 20 BROADER GLOBAL RECOVERY ALSO UNDERWAY¹ JP Morgan/Markit Global PMI 15 (Net balance) China total GDP and selected sectors 65 60 10 5 0 -5 -10 -Manufacturing and construction Services GDP -15 5852222222 50 45 40 35 30 20 15 Q3 2006 Q3 2008 Q3 2010 Q3 2012 Q3 2014 Q3 2016 Q3 2018 Q3 2020 Oct-12 Oct-14 Manufacturing ⚫Services Oct-16 Oct-18 INTEREST RATES VERY LOW; MARKETS STILL VOLATILE AS COVID-19 CONTINUES TO DISRUPT ECONOMIES² COMMODITY PRICES MOVED LOWER DUE TO GLOBAL DOWNTURN BUT HAVE PARTIALLY RECOVERED¹ (Index) Thomson Reuters/CoreCommodity CRB Index 10yr government bond yields (%) 3.5 3.0 2.5 US 2.0 1.5 U.K. 1.0 0.5 Japan 0.0 -0.5 -1.0 Oct-18 Euro-zone Jun-19 Feb-20 112 Oct-20 VIX (CBOE Volatility Index) (%) 90 250 Excluding energy 80 70 200 60 150 50 40 100 Total 30 20 50 10 0 0 Oct-20 Oct-18 Jun-19 Feb-20 Oct-20 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 (1) Source: Refinitiv; Commodity price data to 30 October Source: Bloomberg; data to 30 October National Australia Bank#113NEW ZEALAND BIG FALL IN NZ GDP IN FIRST HALF OF CALENDAR 2020, RECOVERY UNDERWAY¹ $NZ billion (chain prices) RBNZ EXPECTED TO MOVE TO NEGATIVE RATES² $NZ billion (%) OCR 2.50 70 66 62 12 NZ GDP Electronic card transactions 2.00 10 Actual ■NAB Fcst, end qtr Mkt pricing 1.50 8 1.00 0.50 58 6 0.00 54 4 -0.50 50 50 2 -1.00 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Sep-18 Sep-19 Sep-20 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 DAIRY FARM VIABILITY HOUSING MARKET BOUNCED BACK QUICKLY FROM IMPACT OF EARLY COVID-19 RESTRICTIONS6 (Index) (yoy%) House prices Dwelling sales transacted 7.19 3500 60 6.80 3000 Auckland 40 5.95 5.85 2500 2000 ہے 20 0 -20 1500 National ex Auckland -40 1000 -60 500 -80 2012 2013 2014 2015 2016 2017 2018 2019 20203 2021 0 -100 4 Mid Point of Fonterra milk price forecast Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 5 Assessed average cost of production (per kg) * 12 14 16 18 20 12 14 16 18 20 (3) Source: Refinitiv, Statistics NZ. GDP data to Q2 2020, Electronic card transaction all industry data to September 2020 Source: Refinitiv. NAB, OCR Market pricing from Refintiv Eikon Interest Rate Probability as at 3 November 2020 2020 figure includes Milk Price of $7.14 and Dividend of $0.05 (4) Source: Fonterra (milk price) Source: Dairy NZ (Forecast cost of production) 113 (6) Source: Refinitiv, REINZ National Australia Bank#114OTHER INFORMATION National Australia Bank#115OPERATING EXPENSES - HALF ON HALF OPERATING EXPENSES (EX LARGE NOTABLE ITEMS) ($m) YoY expense growth 2.0% FY19: $7,528m FY20: $7,679m HoH expense growth 4.9% (PCP 3.7%) 115 3,792 3,747 (84) 48 10 Including $57m net impact of capitalised software policy change (58) 119 141 19 3,932 Sep 19 Mar 20 Productivity savings Remuneration Technology and Depreciation and inflation investment and Amortisation Restructuring related costs Other Sep 20 National Australia Bank#116FTE FTE CHANGE YOY¹ 30,776 Sep 19 FTE CHANGE HOH¹ 31,555 Mar 20 186 398 134 518 31,372 2 Productivity Upskilling/ Growth/ Compliance Temporary Project Insourcing Sep 20 197 37 294 271 31,372 2 Productivity Upskilling/ Growth/ Temporary Project Insourcing Sep 20 (1) Restated for MLC FTE impacts (2) Represents net of FTE simplification offset by BAU hires 116 Compliance National Australia Bank#117INVESTMENT SPEND AND CAPITALISED SOFTWARE INVESTMENT SPEND - OPEX AND CAPEX ($m) 915 696 655 654 56% 47% 39% 46% CAPITALISED SOFTWARE ($m) 2,688 54% 44% 53% 61% Mar 19 Sep 19 Mar 20 Sep 20 ■Opex ■Capex INVESTMENT SPEND - TYPE ($m) 117 1,955 Spot implied useful life of software 5.7 years¹ 915 696 654 655 254 612 137 195 107 237 248 270 186 342 424 273 311 278 Mar 19 Sep 19 Mar 20 Sep 20 ■Customer experience, efficiency, sustainable revenue Capitalised Software balance Amortisation charge² ■Compliance and risk ■Infrastructure ■ FY19 ■ FY20 (1) Calculated using the capitalised software balance for the period divided by the FY20 amortisation charge excluding accelerated amortisation (2) Excludes accelerated amortisation charges National Australia Bank#118GROUP 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. Prior period non-cash earnings have been restated to exclude discontinued operations. • The definition of cash earnings is set out on page 2 of the Full 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 98 - 100 of the 2020 Full 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 2020 Full Year Results Announcement. Cash earnings Non-cash earnings items (after tax) FY20 ($m) FY20 v FY19 3,710 (36.6%) 2H20 ($m) 2H20 v 1H20 1,994 16.2% Distributions Fair value and hedge ineffectiveness 39 (53.0%) 17 (22.7%) (34) 41.7% (54) Large Amortisation and impairment of acquired intangible assets (217) Large Large Net profit from continuing operations 3,498 (40.8%) 1,957 27.0% Net loss after tax from discontinued operations (939) (15.2%) (711) Large Statutory net profit attributable to owners of NAB 2,559 (46.7%) 1,246 (5.1%) 118 National Australia Bank#119ABBREVIATIONS 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 NGER National Greenhouse and Energy Reporting NII Net Interest Income DRP Dividend Reinvestment Plan NPS Net Promoter Score EAD Exposure at Default NSFR EA Economic Adjustment Net Stable Funding Ratio EOFY End Of Financial Year OIS Overnight Index Swap EPS Earnings Per Share OOI PD FTEs Full-time Equivalent Employees RMBS GHG Greenhouse Gas ROE Other Operating Income Probability of Default Residential Mortgage Backed Securities Return on Equity RWAs Risk-weighted assets GIAs Gross Impaired 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 119 National Australia Bank#120DISCLAIMER The material in this presentation is general background information about the NAB Group current at the date of the presentation on 5 November 2020. 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 2020 Full 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", "target", "project", "anticipate", "expect", "intend", "likely”, “may”, “will”, "could" or "should" or, 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 many factors that could cause actual results to differ materially from those projected in such statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, changes to the Australian and global economic environment and capital market conditions, changes to the operating and regulatory environment of the Group and changes to the financial position or performance of the Group. Further information is contained in the Group's Luxembourg Transparency Law disclosures released to the ASX on 27 April 2020 and the Group's Annual Financial Report for the 2020 financial year, which will be available at www.nab.com.au on 11 November 2020. For further information visit www.nab.com.au or contact: Sally Mihell Executive General Manager, Investor Relations Mobile | +61 (0) 436 857 669 Natalie Coombe Director, Investor Relations Mobile | +61 (0) 477 327 540 120 Mark Alexander General Manager, Corporate Communications Mobile | +61 (0) 412 171 447 National Australia Bank