The major bank has kicked off the financial year with rising direct mortgage flows and a larger loan book.
National Australia Bank (NAB) – the nation’s third-largest home lender – has reported a strong first-quarter financial year 2026 trading update, with proprietary home loans lifting sharply.
NAB’s update, released on Wednesday (18 February), showed that home lending at the bank was now larger than the market average and that mortgage growth was 1.1 times ahead of system over the quarter.
Crucially, drawdowns via proprietary channels (excluding UBank) climbed to 46 per cent in the first quarter of FY26, up from 39.9 per cent from 1QFY25, underscoring the bank's ongoing pivot towards direct distribution in its mortgage franchise.
This builds on NAB’s strategy outlined on its FY25 results, when it revealed that proprietary lending for mortgages had risen 46 per cent between the start of FY24 and the end of FY25.
In the latest update, CEO Andrew Irvine stressed that momentum in the proprietary channel was quickening.
“Australian home lending grew 1.1 above system with proprietary channels improving from 41 per cent in 2H25 to 46 per cent in 1Q26 (excluding UBank),” he said.
On the business side, NAB is also leaning into its traditional strength.
The bank reported that business lending rose 2 per cent over the quarter, including 3 per cent growth in its business & private banking division.
Irvine said this reflected the bank’s clear focus on business customers.
Loan book and deposit momentum
Across the group, total gross loans and acceptances increased to $792.6 billion, up 1 per cent on the prior quarter and 6 per cent over the year.
Housing balances rose from $436.6 billion to $442.2 billion over the quarter (up 1 per cent and 5 per cent year on year), while business lending grew from about $330.9 billion to $336 billion, representing a 7 per cent annual rise.
This mix leaves housing as the largest single portfolio, while business lending is growing at slightly faster rates.
Customer deposits also tracked higher, rising 1 per cent over the quarter to $667.5 billion.
Profit, margins, and asset quality
NAB reported unaudited statutory net profits of $2.21 billion for the first quarter, supported by solid income growth and flat costs.
Underlying profit was 12 per cent higher than the 2H25 quarterly average, while cash earnings were 15 per cent above the second-half benchmark.
Meanwhile, the group’s net interest margin rose 2 basis points over the quarter to 1.80 per cent.
The bank added that higher investment in technology and frontline bankers was offset by productivity gains and lower remediation charges.
NAB also emphasised steps it was taking to support customers and streamline customer journeys.
The bank confirmed it had completed the migration of Citi Consumer Business customers onto NAB systems in the first quarter, which it said would enable a highly integrated product set and provide more consistent service.
It also highlighted new physical access initiatives, noting that “the new NAB Financial Centers bringing together premier, private banking and proprietary lending specialists in a single location to offer support”.
Irvine framed these moves within NAB’s longer-term priorities.
“NAB is well placed to manage our bank for the long term and to support our customers while delivering sustainable growth and returns for shareholders,” Irvine said.
[Related: NAB’s proprietary lending soars 46% in under 2 years]
