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94 95 GROUP BASEL III CAPITAL RATIOS 18.16% 16.14% 13.53% 17.31% 15.52% 13.02% 19.61% 17.10% 14.00% 14.15% 12.44% 13.25% 14.14% 11.77% 12.19% 10.24% 9.69% 9.77% Sep 15 ■APRA Common Equity Tier 1 ratios APRA to Internationally Comparable CET1 Ratio Reconciliation Mar 16 Sep 16 APRA Tier 1 ratios APRA Total Capital ratios Equivalent Internationally Comparable ratios¹ CET1 NAB CET1 ratio under APRA 9.77% APRA 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 +87bps Mortgages - reduction in LGD 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 NAB Internationally Comparable CET1 (1) Internationally Comparable CET1 ratios align with the APRA study entitled "International capital comparison study" released on 13 July 2015 ROBUST FUNDING PROFILE GROUP STABLE FUNDING INDEX (SFI) AUSTRALIAN FUNDING GAP1 ($bn) 150 140 84% 86% 90% 91% 72% 130 20% 20% 20% 22% 16% 120 110 56% 64% 66% 70% 69% 100 Sep 08 Sep 10 Sep 12 90 Sep 14 Sep 16 ■Customer Funding Index ■Term Funding Index +128bps +33bps +175bps 14.00% National Australia Bank Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Aug 16 ―NAB Peer 1 Peer 2 -Peer 3 RELIANCE ON SHORT TERM WHOLESALE FUNDING² ($bn) 16% 11% 10% 9% 8% GROUP FUNDING PROFILE • Proportion of core assets funded by stable funding sources has steadily increased • Increase in stable funding supports transition to NSFR compliance • Reliance on short term funding has reduced significantly 50 28 Sep 11 Sep 13 13 Sep 14 6 0 Sep 15 Sep 16 Short Term Funding of Core Assets Offshore as % of Total Funding Liabilities and Equity (1) Australian funding gap = Gross loans and advances + Acceptances less Total deposits (excluding certificates of deposits). Source: APRA Monthly Banking Statistics August 2016 (2) September 2015 figures onwards presented on a continuing operations basis, prepared in accordance with AASB 9. Prior periods have not been restated per accounting methodology National Australia Bank

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