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In its full-year results for the 12 months to September 2026, National Australia Bank posted 9.8 per cent growth in business lending balances, dwarfing the 3.8 per cent in home lending.
The result was driven by growth across both of the bank’s business lending divisions, with balances in business and private banking (B&PB) rising 10.5 per cent from $166 billion to $184 billion and corporate and institutional banking increasing 9.0 per cent from $124 billion to $135 billion.
The home loan book, by contrast, rose 3.8 per cent from $421 billion to $436 billion.
NAB’s Australian business lending market share rose to 21.7 per cent in September 2026, up from 21.6 per cent a year earlier, according to Australian Prudential Regulation Authority data cited in its results presentation.
NAB said B&PB’s performance was supported by investment in more seamless experiences for bankers and customers, including changes to its business lending process and the simplification of business transaction account openings.
Both changes were also driving faster turnaround times, the bank said.
Andrew Irvine, NAB CEO, said: “Our business-focused divisions are getting stronger and despite fierce competition, strategic disruption and a challenging economic environment, across business and private banking and our corporate and institutional bank, NAB is the largest business lender in Australia.”
Business lending grows across sectors
Growth was strongest in health, where lending increased 16.2 per cent year on year to $12 billion. Commercial real estate lending rose 11.2 per cent to $47 billion, while agriculture lending increased 7.9 per cent to $51 billion.
NAB’s results also outlined the security profile of its business lending portfolio.
At September 2026, 72 per cent of B&PB business lending was fully secured. A further 21 per cent was partially secured, while 7 per cent was unsecured. The mix was unchanged from a year earlier.
Credit impairment charges rise
While NAB’s business lending growth remained strong, the bank’s credit impairment charge rose to $1.547 billion in FY2025–26, up from $833 million in the previous year.
The charge included $1.083 billion in individually assessed charges, which NAB said primarily related to customers in its corporate and institutional banking and business and private banking business lending portfolios.
A further $464 million came from collective provision charges, including a $403 million net increase in forward-looking provisions as the bank accounted for a more challenging economic outlook. The remaining $61 million reflected underlying charges, which NAB attributed to lending volume growth and a deterioration in asset quality during the second half of FY25–26.
“We have strengthened provisioning to reflect a more challenging environment of slowing growth, declining house prices, higher interest rates and inflationary pressures,” the bank said.
Indeed, businesses have been facing a range of regulatory and economic pressures in recent months.
NAB’s Business Survey, which has tracked confidence and conditions for more than 20 years, found that a “triple threat” of higher interest rates, global uncertainty and elevated fuel and diesel costs had pushed business confidence to near-historic lows.
Alongside these economic pressures, Australian Taxation Office debt enforcement and regulatory changes such as Payday Super have also put pressure on cash flow.
“Most customers have been able to absorb the changes and are showing resilience, but clearly there are pockets of challenge and we’re looking after and talking to those customers as best we can,” Irvine said.
“I think it probably is a fair assertion that some of our small business customers are a little bit more pressure, cash flow pressure. We know small businesses have been hit with input cost increases.
“But in the scheme of things, the level of stress in Australian mortgages, generally, and in our mortgage book are still very low compared to both historical measures as well as the global benchmark.”
Despite poor business conditions and confidence, business lending remains at record highs, with a particular focus on working capital facilities.
A report published by the Australian Banking Association (ABA) found that 40 per cent of small and medium-sized businesses sought finance from their bank, while credit provided by banks reached a record $750 billion in April 2026, up from $567 billion in April 2023.
Other banks such as Commonwealth Bank of Australia, Australia New Zealand Banking Group, NAB, and Judo Bank have also recorded strong growth in their business lending books.
Competition between bank and non-bank lenders has also intensified. The ABA found that the margin on small business loans above the cash rate had fallen to a five-year low.
NAB shifts mortgage focus towards proprietary lending
As reported in Broker Daily’s sister brand, The Adviser, NAB is sharpening its focus on proprietary home lending while becoming more selective about the mortgage business it takes through brokers.
The bank’s full-year results showed that Australian home lending drawdowns through proprietary channels increased to 50 per cent in FY25–26, up from 41 per cent in FY24–25.
Speaking to The Adviser, NAB CEO Andrew Irvine said the lender was responding to pressure on mortgage returns, with the bank seeking to deploy capital where it could secure stronger returns.
“One of the things that we’ve seen in the mortgage market, and it’s been exacerbated since the federal budget, has been that system returns have been under material pressure,” Irvine said.
He said NAB was continuing to compete for broker-originated loans but was focusing on business that better aligned with its appetite.
“There still is good flow in the broker market that we’re choosing to compete for, generally in lower LVR bands and at larger size tickets,” he said.
“But beyond that, we are choosing to compete more aggressively in our proprietary business because we can get better economic outcomes there, and that’s working for us.”
Irvine also said NAB was developing a more distinctive service proposition for selected broker partners, with a focus on speed and service.
“That’s much easier to do when you focus on 5 to 10 per cent of brokers than it is on the whole broker community,” he said.
“We’ve identified a number of brokers that are providing us with more of the flow that we would want to book ... we’re going to work more effectively with those brokers, provide them with more distinctive service and speed so that we basically will become the preferred bank for those brokers.”
[Related: Businesses are struggling, but demand for finance keeps rising]
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