National Australia Bank (NAB) expects credit impairment costs in the first half to reach A$706m ($503m), about double previous levels, with the Iran war adding pressure to the global economy and financial markets.
The lender said it had updated its settings as of 31 March 2026.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
These included a rise in forward-looking collective provisions, as well as the planned use of a discount and partial underwriting for the 1H26 dividend reinvestment plan.
NAB also revised the Group’s software capitalisation policy to better reflect rapid technological change.
Under the revised policy, the bank reduced the useful life of capitalised software assets, altered the type of assets to be capitalised, and lifted the software capitalisation threshold from A$5m to A$20m in line with peer practice.
It said this would lead to a larger share of investment spending being recognised as an expense from 2H26.
NAB said the chance of an Australian “downside economic scenario” had increased because of the conflict, and it now expects a rise in bad debts.
The projected A$706m impairment charge for the first half compares with A$485m in the second half of last year.
The bank also said its 1H26 results would contain an accelerated amortisation charge of A$1.3bn before tax and A$949m after tax.
This will be reported as a Large Notable Item in 1H26.
This includes assets where the accelerated amortisation charge resulted in these assets being fully written off.
In response to these effects and continued uncertainty, NAB said it was taking steps to reinforce its capital position and balance sheet.
It expects to apply a 1.5% discount to the 1H26 DRP and partially underwrite the DRP3.
The bank said these measures could raise up to $1.8 billion and add about 40 basis points to the Group’s CET1 ratio in 2H26.
The announcement remains subject to completion of NAB’s 2026 half-year results, due on Monday 4 May 2026.
Last month, Reuters reported, citing the Finance Sector Union, that NAB plans to cut about 170 jobs as part of a restructuring in one of its business divisions.
The proposal would remove 447 roles and create 277 new positions in Australia, leaving a net reduction in staffing. NAB also reportedly intends to add 237 roles overseas, mainly in India and Vietnam.
