Investor Presentaiton

11 10 15 15 25 35 KEY FUNDING COST DRIVERS FUNDING MIX-SEP 2016 LT Wholesale. Funding 22% TERM DEPOSITS¹ (bps) 125 ST Wholesale. Funding 17% Equity. 7% Deposits 54% 75 25 25 50 100 SHORT TERM WHOLESALE FUNDING² (bps) 45 LONG TERM WHOLESALE FUNDING³ (bps) 130 5 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 3M Bills-OIS Spread HY Average Cost 40 40 70 100 Sep 13 (1) Cost over market reference rate (2) Spread between 3 month AUD Bank Bills and Overnight Index Swaps (OIS). Half year average cost based on 3 month moving average. Source: Bloomberg (3) AUD Major Bank Wholesale Unsecured Funding rates over BBSW (3 years and 5 years) GROUP OPERATING EXPENSES WELL MANAGED OPERATING EXPENSES ($m) HoH expense growth (1.9%) 3,755 3,668 FURTHER DETAIL ON OPERATING EXPENSES Sep 13 Dec 13 (51) (98) 29 56 (8) Sep 15 Mar 16 Personnel costs Productivity savings Technology and investment Depreciation and Amortisation Other Mar 14 • Productivity savings delivered in FY16 of $187m (2H16 increase $98m) ($m) 479 570 469 531 1% 2% • Targeting ongoing annual productivity savings of greater than $200m pa with some reinvested 44% 63% 59% 47% • Capitalised software balance increased $312m over FY16 to $2,344m (2H16 increase $217m) due to Personal Bank Origination Platform (PBOP) and New Payments Platform (NPP) development 19% 24% 9% 9% 27% 32% 35% 29% Mar 15 Sep 15 ■ Other Mar 16 Infrastructure Sep 16 PROJECT INVESTMENT SPEND (OPEX AND CAPEX) ■ Efficiency and Sustainable Revenue ■Compliance / Operational Risk National Australia Bank Jun 14 Sep 16 Dec 13 Sep 14 Dec 14 Mar 14 Mar 15 Jun 14 Sep 14 Jun 15 Sep 15 -3 Year 5 Year 3,683 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Dec 15 Mar 16 Mar 16 Jun 16 Jun 16 Sep 16 Sep 16 National Australia Bank

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