Stock Spotlight: National Australia Bank Limited (ASX:NAB)

This week's Stock Spotlight is ASX-listed National Australia Bank Limited.


About National Australia Bank Limited.


National Australia Bank Limited provides financial services to individuals and businesses in Australia, New Zealand, Europe, Asia, the United States, and internationally. The company operates through Business and Private Banking; Personal Banking; Corporate and Institutional Banking; New Zealand Banking; and Corporate Functions and Other segments. It accepts transaction accounts, savings accounts, debit cards, and term deposits; and specialised accounts, such as foreign currency, business interest, cash maximiser, farm management, community free saver, statutory trust, and project bank accounts, as well as farm management deposits. In addition, the company provides home loans, personal loans, and business loans; vehicle and equipment finance; and trade and invoice finance, as well as business overdrafts and bank guarantees. Further, it offers insurance products consisting of home and content, landlord, travel, car, caravan and trailer, life, and business insurance products; and pension, self-managed super funds, cash management, and financial planning and advisory services. Additionally, the company provides investment products; credit, debit, and business cards; payments and merchant services; online and internet banking services; small business services; international and foreign exchange solutions; and industry specific banking services. The company was founded in 1834 and is based in Melbourne, Australia.


Source: Yahoo Finance



Key Stats

Source: Yahoo Finance, ASX. Data as of 18/12/24.


Price Performance

Growth Potential



  • All else being equal, NAB is offering a dividend yield of approx. 4.5% (before franking) over the forward estimates.
  • Strong oligopoly position in Australia (along with three other major banks in CBA, ANZ, WBC).
  • SME market focus provides some differentiation to other major banks.
  • Well capitalised with a strong capital position which provides optionality of further capital management (e.g., share buybacks).
  • Potential pressure on net interest margins as competition intensifies with other major banks. This may especially be the case as consumers come off fixed rates and move into variable rates.
  • Strong provisioning coverage.
  • A well-diversified loan book with attractive exposure to business.

Key Risks


  • Valuations for the broader banking sector appear to be becoming stretched post the rally in 2024.
  • Low growth environment impacting earnings.
  • Potential cuts or reduction to dividends due to low earnings growth.
  • Intense competition for loan and deposit growth.
  • Normalising / increase in bad and doubtful debts or increase in provisioning.
  • Funding pressure for deposits and wholesale funding (increased funding costs).
  • Any legal fees, settlements, loss or penalties associated with ASIC or US-based law suits.

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Disclaimer: This article does not constitute financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing.

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