Investor presentation 5 May 2011 Cameron Clyne, Group Chief - PDF document

Investor presentation 5 May 2011 Cameron Clyne, Group Chief Executive Officer Mark Joiner, Executive Director Finance National Australia Bank Limited ABN 12 004 044 937 Solid result – continued progress against strategy Financial highlights Half year to � Increased cash earnings Mar 11 Sep 10 Change Mar 10 Change (%) (%) � Strong balance sheet � Improving ROE Revenue 8,799 8,401 4.7% 8,237 6.8% ($m) � Increased dividend Optimistic on outlook – Cash earnings 2,668 2,388 11.7% 2,193 21.7% still room for caution ($m) � Multi-speed Australian economy Tier 1 ratio 9.19% 8.91% 28bps 9.09% 10bps � Developed economies on better footing Dividend (100% � Impact of natural disasters 84 78 7.7% 74 13.5% franked) (cps) � Regulatory and political landscape still uncertain Cash ROE 15.1% 13.5% 160bps 12.9% 220bps NAB well positioned � Reputation strengthened Statutory 2,428 2,129 14.0% 2,095 15.9% � Solid momentum net profit ($m) � Positioned for improved economic outlook 2

Overall macro outlook improving � Global economic recovery continuing – growth rates differ across regions � Australian economy solid but floods will impact Economic outlook near term growth � UK and NZ still subdued � Basel III requirements clearer – local interpretation still to be resolved Banking regulation � UK environment evolving � Ongoing political and consumer scrutiny Political environment 3 Strong progress – well positioned for the future � Growth and share gains Group � Strong balance sheet Positive � Efficiency improvements performance � Stronger on leadership and culture momentum International Business Personal Wholesale MLC & Operations Banking Banking Banking NAB Wealth Managing for Consolidated market Differentiated and Focus on Investing to value/preserving position core franchise capture growth growing optionality � Increased market � Rebased and � Cross-sell � Well positioned � SGA managed share differentiated with progress for regulatory down risk good momentum change � Grew lending � Strength in � BNZ continued above system � Continuing to Specialised � Attracting new solid performance gain share Finance and advisers � Added over 350 � UK Banking Global Capital bankers since � New channels � M&A integration positioned for Markets 2009 performing well continues to market recovery, progress well maintaining � Established � Continued focus optionality foundations for on process � Building cross-sell and service nabInvest � GWB progressing improvement well 4

Transforming the way we do business: 2009 - 2014 � Customer experience improved � Service delivery enhanced End state � Ageing infrastructure replaced � Operational risk reduced Infrastructure & Replatforming Customer Key Network Programme Process programmes Transformation (NextGen) Transformation � IBM infrastructure and � Target operating state � Customer experience hosting partnership defined and end-to-end processes complete defined � Platform build in Achievements � Network modernisation progress � Process transformation to date commenced – 28% of commenced (eg, mortgages) � Activated some sites upgraded functionality � UBank – working well (eg, customer analytics) � Contact centre voice � New Australian General � New private client infrastructure largely Ledger operational platform launched complete � Securitisation platform � Further develop UBank CY11 priorities � Continue to progress – additional capability � Mortgage transformation payments transformation deployed largely complete � Network modernisation � Foundation release of completed Core Banking deployed 5 2011 outlook � Continuing to make solid progress advancing our strategic priorities � Well placed to navigate economic, regulatory and political uncertainty � Will continue to leverage strengths to support ongoing franchise momentum and ROE improvement 6

1H11 Financials Group financial result Half year to Mar 11 Sep 10 Mar 10 Change Change ($m) on Sep 10 on Mar 10 Net interest income 6,304 6,174 6,114 2.1% 3.1% Other operating income 2,495 2,227 2,123 12.0% 17.5% (incl MLC) Net operating income 8,799 8,401 8,237 4.7% 6.8% Operating expenses (3,991) (4,001) (3,861) 0.2% (3.4%) Underlying profit 4,808 4,400 4,376 9.3% 9.9% B&DDs (988) (1,033) (1,230) 4.4% 19.7% Cash earnings 2,668 2,388 2,193 11.7% 21.7% Cash ROE 15.1% 13.5% 12.9% 160bps 220bps NIM 2.23% 2.24% 2.26% (1bps) (3bps) Tier 1 ratio 9.19% 8.91% 9.09% 28bps 10bps Spot GLAs ($bn) 459.2 448.0 434.5 2.5% 5.7% 8

Business unit contributions Home currency Half year to Change % Change % (m) Mar 11 Sep 10 Mar 10 on Sep 10 on Mar 10 Underlying profit Business Banking 2,059 1,966 1,939 4.7% 6.2% Personal Banking 778 723 682 7.6% 14.1% Wholesale Banking 541 428 586 26.4% (7.7%) UK Banking £252 £247 £264 2.0% (4.5%) NZ Banking NZ$496 NZ$494 NZ$449 0.4% 10.5% MLC & NAB Wealth 388 360 367 7.8% 5.7% Specialised Group Assets 115 (6) (135) large large Other ^ 148 117 116 26.5% 27.6% Group underlying profit 4,808 4,400 4,376 9.3% 9.9% Cash earnings – attribution analysis by business ($m, constant currency) 121 (27) (33) (13) 32 10 101 6 83 2,668 2,388 Sep 10 Business Personal Wholesale UK Banking NZ MLC & SGA Other ^ FX Mar 11 Banking Banking Banking Banking NAB Wealth ^ Other comprises Group Funding, Group Business Services, other supporting units, Asia Banking and GWB 9 Revenue momentum Revenue momentum Other operating income ($m) ($m) 8,799 8,514 8,392 8,401 8,237 606 171 2,630 109 433 266 704 634 658 2,495 645 684 2,204 2,123 539 1,273 982 146 1,262 2,227 1,087 1,030 529 949 695 717 908 933 770 748 764 760 997 1,308 1,536 895 1,033 468 302 348 213 1,669 1,589 1,516 1,667 1,608 1,410 1,417 1,263 1,255 1,231 2,938 2,782 2,837 2,684 2,538 (79) (210) (190) (5) Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Business Personal Wholesale Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 MLC UK NZ Fees & Commissions Wholesale Markets & Treasury Other* MLC Other * Includes SGA, GWB, Group Funding and other 10

Net interest margin Group net interest margin Business unit net interest margin – attribution analysis Half year to 0.05% (0.01%) (0.02%) (0.02%) (%) Mar 11 Sep 10 Mar 10 (0.01%) Business Banking 2.57 2.50 2.51 Personal Banking 2.22 2.28 2.34 2.24% 2.23% UK Banking 2.33 2.28 2.40 Sep 10 Lending Deposit Funding & Markets & Other Mar 11 - Margin & Margin & Liquidity Treasury NZ Banking 2.24 2.24 2.08 Mix Mix Cost � Current NIMs affected primarily by asset repricing, deposit mix and skew to mortgages in current growth � At business unit level, asset growth skew most pronounced in Personal Banking � Future NIM likely to be affected by heightened asset competition, emphasis on high Basel III value deposits, rising wholesale funding and liquidity costs, and change in mix of asset growth 11 Jaws and investment spend a Jaws and banking CTI momentum CTI 1H11 CTI 2H09 CTI 1H10 CTI 2H10 44.5% 45.5% 46.2% 43.9% 4.7% 3.6% Expense growth 1.3% -1.6% +4.9% 1.1% 2.0% -3.1% -2.5% -0.2% -1.4% Revenue -1.8% growth 1H11 v 2H10 2H10 v 1H10 2H09 v 1H09 1H10 v 2H09 CTI – Banking Cost to Income Ratio Investment spend ($m) 522 331 483 399 556 9% 4% 5% 3% 4% 33% 27% 45% 51% 58% 47% 51% 39% 35% 25% 17% 13% 12% 11% 11% Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Compliance / Operational Risk Efficiency and Sustainable Revenue Infrastructure Other 12