Investor Presentaiton

52 AUSTRALIAN BANKING: HOUSING LENDING HOUSING LENDING BY CHANNEL' HOUSING LENDING FLOW MOVEMENTS³ ($bn) 5% ($bn) 6 (8) 6% 46 (14) 2% (23) 103.9 106.6 108.9 83.5 84.8 88.2 75.2 75.9 76.8 271 278 Sep 15 Mar 16 Sep 16 Sep 15 Mar 16 Sep 16 ■Retail, Direct and Small Business ■Broker Sep 15 Mar 16 Sep 16 ■NAB Business, CSB² and Private Wealth Mar 16 New fundings & redraw Interest Repayments Pre- payments External refinance & other Sep 16 HOUSING LENDING VOLUME BY BORROWER AND REPAYMENT TYPE4 Owner Occupier Interest Only 13.1% Investor Principal & Interest 16.8% Owner occupied 57.7% Owner Occupier Principal & Interest 44.6% Investor Interest Only 25.5% Investor 42.3% AUSTRALIAN MORTGAGES BY GEOGRAPHY VIC/TAS 31% QLD 17% SA/NT 5% NSW/ACT 37% WA 10% (1) (2) Spot volumes. Excludes UBank, Asia and Non Performing Loans. Prior periods have been restated to reflect customer transfers Corporate and Specialised Banking, history has been restated to include Medfin Home Loans (3) Excludes Asia (4) Based on APRA ARF 320.0 reporting definitions. Interest Only includes Line of Credit National Australia Bank AUSTRALIAN BANKING: HOUSING LENDING AREAS OF INTEREST HOUSING LENDING PRACTICES AND CUSTOMER PROFILE Key practices • • • • • • Broker applications assessed centrally - verification, credit decisioning Floor interest rate 7.4% and serviceability buffer 2.25% including on existing debt Maximum LVR 95% for owner occupier and 90% for investor - less for high risk postcodes, at-risk postcodes, inner city and non- residents Income typically verified using salary credits into customers' accounts 20% shading of rental and other uncertain income Interest only lending repayments assessed on the residual principal and interest period All brokers licensed and subject to accreditation requirements NAB conducts broker level monitoring using specific review triggers such as delinquency thresholds Customer profile • Customers an average of 15.0 monthly payments in advance • 62.3% customers ≥1 month in advance1 MINING TOWNS WA and QLD housing exposure 10% and 17% of total housing book (NSW/ACT 37%, VIC/TAS 31%) ⚫ Housing exposure to key mining towns² ~1% of total housing book Captured in 'high risk postcodes' with max LVR 70% RESIDENTIAL APARTMENTS AND INNER CITY POSTCODES · Closely monitor inner city postcodes including those with high apartment concentration • Maximum LVR 80% for these postcodes • Lending to these postcodes <2% of total housing book NON-RESIDENT LENDING • NAB property survey suggests foreign buyer demand declined slightly in 2H16, but remains elevated at 10% of national new property sales and 7% established properties Lending to non-residents <3% of total housing book Maximum LVR 60%. 40% shading applies to foreign income 53 (1) Not reported for Advantedge. Excludes line of credit, interest only loans and the impact of offset accounts Includes eight postcodes in mining areas in WA and QLD (2) National Australia Bank

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