Investor Presentaiton

46 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

View entire presentation