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In its third-quarter 2026 trading update, National Australia Bank (NAB) reported that Australian business lending rose 2 per cent over the quarter, with business and private banking lending increasing 4 per cent.
NAB’s total business lending reached $352.4 billion at the end of June, up 2 per cent from $345.1 billion in March and 9 per cent from June 2025.
Group executive of NAB’s business and private banking division, Andrew Auerbach, has previously said that the division had “continued to perform well in a challenging economic environment”.
“It’s pleasing to see the resilience of our business customers who continue to find opportunities to grow and innovate,” Auerbach said.
Meanwhile, home lending at NAB increased 1 per cent over the quarter to $451.4 billion, while total gross loans and acceptances rose 2 per cent to $817.4 billion.
Business loans strong across the board
NAB is not the first major bank to record strong growth in business lending, with other major banks also reporting growth in their business loan books.
In its annual results report, the Commonwealth Bank of Australia’s (CBA) business lending book grew almost twice as fast as home lending over the past financial year.
CBA’s total business lending increased by 13 per cent in its financial year, the 12 months to June 2026, rising from $159 billion to $180 billion.
This is almost double what it was in June 2019, when the book stood at $89 billion, with the bank reporting a 12 per cent five-year compound annual growth rate in the division.
Likewise, Australia and New Zealand Banking Group (ANZ) also saw business lending pick up pace in the June quarter, with business and private bank loans rising 4 per cent over the quarter to $71 billion, up from $68 billion in March and 6 per cent from $67 billion a year earlier.
Signs of potential stress
Alongside the continued growth in business lending, NAB reported higher watch loans during the quarter, reflecting what it described as “current and potential stress impacting performing customers”.
“The combined impacts of the Middle East conflict, higher domestic interest rates and recent tax changes in the Federal Budget are creating challenges and uncertainties for our customers,” NAB CEO Andrew Irvine said.
“While the ratio of non-performing loans declined over 3Q26, watch loans were higher reflecting current and potential stress impacting performing customers.”
Indeed, across NAB’s loan book, watch loans represented 1.17 per cent of gross loans and acceptances in the June quarter, up from 1.11 per cent from March.
Housing loans more than 90 days past due increased to 1.01 per cent, and those more than 30 days past due edged up to 1.63 per cent.
NAB also recorded $299 million in credit impairment charges during the quarter, including $180 million in individually assessed provision charges and $119 million in collective provision charges.
NAB said the collective provision charge was “driven by business lending volume growth and deterioration in performing book asset quality”, although the bank noted that there had been no changes to the economic assumptions or scenario weightings it had been using.
Overall performance remains steady
NAB reported $1.83 billion in cash earnings for the June quarter, up 2 per cent on the quarterly average for the first half of FY26, excluding the impact of a large notable item.
Total loans increased 2 per cent over the quarter to $817.4 billion, up from $804.2 billion.
The bank’s statutory net profit reached $1.81 billion, up 32 per cent on the first-half quarterly average, while cash earnings were 4 per cent higher than a year earlier.
NAB’s CET1 ratio also increased from 11.65 per cent in March to 11.93 per cent in June, remaining above its operating target of more than 11.25 per cent.
Home loans fade
As reported by Broker Daily sister brand The Adviser, the softer mortgage market was reflected in NAB’s home loan applications, which fell 15 per cent over the June quarter compared with the March quarter and were 16 per cent lower than a year earlier.
Investor applications declined 17 per cent over the quarter, while owner-occupier applications fell 14 per cent.
Despite the weaker pipeline, NAB’s housing lending reached $451.4 billion at the end of June, up 1 per cent from $445.7 billion three months earlier and 4 per cent higher than a year ago.
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