National Australia Bank

National Australia Bank Limited ABN 12 004 044 937Annual Report 2022 National Australia Bank Limited  ABN 12 004 044 937This 2022 Annual Report (Report) is lodged with the Australian Securities and Investments Commission and ASX Limited. National Australia Bank Limited (NAB) is publicly listed in Australia.  The Report contains information prepared on the basis of the Banking Act 1959 (Cth), Corporations Act 2001 (Cth), 4th edition ASX Corporate Governance Councilʼs Corporate Governance Principles and Recommendations, Accounting Standards and interpretations issued by the Australian Accounting Standards Board and International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board. It also provides information on the Groupʼs activities and performance in 2022, showing how the Group is creating value through its strategy, operating environment, governance and financial and non-financial activities. NAB also produces a Climate Report which can be viewed online. To view this Report online, visit www.nab.com.au/annualreports. Alternatively, to arrange for a copy to be sent to you free of charge, call the shareholder information line on 1300 367 647 from within Australia or +61 3 9415 4299 from outside Australia. Nothing in the Report is, or should be taken as, an offer of securities in NAB for issue or sale, or an invitation to apply for the purchase of such securities. All figures in the Report are in Australian dollars unless otherwise stated.2022 Reporting Suite

Acknowledgement of Country

NAB acknowledges Australia’s First Nations people as the Traditional Custodians of the land and their continuing 
connection to country, sea and water. We pay respect to their Elders past, present and emerging.

We make this acknowledgement with the ambition to continue supporting a reconciled Australia through our actions and 
voice. This is backed by why we are here: to serve customers well and help our communities prosper.

2022 Annual Report

NAB’s 2022 Annual Report provides information on the Group’s activities 
and performance during 2022. It outlines how NAB is creating value 
through its strategy, operating environment, governance, financial and non-
financial activities. This Report combines content from three previously 
separate reports: Annual Financial Report, Annual Review and Corporate 
Governance Statement.

The Annual Report draws on aspects of the International Integrated Reporting 
Framework. It is supported by the additional documents outlined below.

Report Structure

Pages 11 to 49 contain the Group’s business, strategy, operating environment 
and performance. These pages outline performance relevant to customers, 
colleagues, climate change and environment, data security and technology, 
and communities. Stakeholder feedback was considered in the shaping of this 
section (see What matters most on page 23 for more information).

Pages 56 to 80 contain NAB’s 2022 Corporate Governance Statement, which 
discloses how the ASX Corporate Governance Council’s ‘Corporate Governance 
Principles and Recommendations – 4th edition’ have been complied with.

Pages 95 to 144 contain key components of the Report of the Directors.

Pages 108 to 142 contain the Remuneration Report.

Pages 147 to 244 contain the Financial Report.

Assurance

The Remuneration Report on pages 108 to 142 and Financial Report on pages 
147 to 244 have been audited by EY. The assurance statement for the Financial 
Report and Remuneration Report is on pages 245 to 252.

EY provides limited assurance over 25 key non-financial sustainability metrics 
and performance disclosures and a further seven metrics relating to NAB's 
Reconciliation Action Plan as outlined in EY's limited assurance statement on 
pages 50 to 55.

KPMG provides assurance over selected environmental measures 
disclosed across NAB's reporting suite. KPMG’s assurance statements 
are available on NAB's website at nab.com.au/about-us/social-impact/
shareholders/performance-and-reporting.

Additional documents

2022 Full Year Results 
Investor Presentation 
Information designed 
for analysts and 
institutional investors 
which accompanies 
the  Group's Full Year 
Results Presentation.

Management 
Discussion 
and Analysis

Management 
discussion and 
analysis of the 
Group's results for 
the year ended 
30 September 2022.

2022 Climate Report

2022 Pillar 3 Report

Describes the Group's 
approach to risk 
management and 
provides details about 
risk exposures, capital 
adequacy and liquidity.

Provides stakeholders 
with information on 
the Group's approach 
to climate change 
and how it manages 
associated risks 
and opportunities. 
The report uses 
the recommendations 
of the Financial 
Stability Board's Task 
Force on Climate-
related Financial 
Disclosures (TCFD).

2022 Sustainability 
Data Pack

Provides further detail 
on the Group's ESG 
performance, in addition 
to the material themes 
covered in the Annual 
Report and the 
Climate Report.

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2022 Reporting Suite  (cont.)

Additional information

Certain definitions

The Group's financial year ends on 30 September. The financial year ended 30 September 2022 is referred to as 2022 and other 
financial years are referred to in a corresponding manner. Reference in this document to the year ended September 2022 are 
references to the twelve months ended 30 September 2022. Reference in this document to the environmental reporting year are 
references to the twelve months ended 30 June 2022.

The abbreviations $m and $bn represent millions and thousands of millions (i.e. billions) of Australian dollars respectively.

Key terms used in this report are contained in the Glossary.

Forward looking statements

This report contains statements that are, or may be deemed to be, forward looking statements. These forward looking 
statements may be identified by the use of forward looking terminology, including the terms "believe", "estimate", "plan", 
"project", "anticipate", "expect", "goal", “target”, "intend", “likely”, "may", "will", “could” or "should" or, in each case, their negative 
or other variations or other similar expressions, or by discussions of strategy, plans, objectives, targets, goals, future events 
or intentions. Indications of, and guidance on, future earnings and financial position and performance are also forward 
looking statements. You are cautioned not to place undue reliance on such forward looking statements. Such forward looking 
statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, 
many of which are beyond the control of the Group, which may cause actual results to differ materially from those expressed or 
implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

There are a number of other important factors that could cause actual results to differ materially from those projected in such 
statements, including (without limitation) a significant change in the Group’s financial performance or operating environment; a 
material change to law or regulation or changes to regulatory policy or interpretation; and risks and uncertainties associated 
with the ongoing impacts of the COVID-19 pandemic, the Russia-Ukraine conflict and other geopolitical tensions, the Australian 
and global economic environment and capital market conditions. Further detail is contained on page 84 under Disclosure on 
Risk factors.

Contents

Our business in 2022

2022 at a glance

Chair's message

CEO's message

Creating value

The Group's businesses

Strategy

What we will be known for

Operating environment

Creating value

Sustainability approach

Customers

Colleagues

Climate change and environment

Data security and technology

Helping our communities prosper

Independent limited assurance statement

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30

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50

Corporate Governance Statement

56

Corporate Governance Framework

Board of Directors

Executive Leadership Team

Key Board activities in 2022

Board composition, diversity and performance

Board committees

How We Work

Assurance and control

Compliance with ASX corporate 
governance recommendations

Risk management

Risk management overview

Risk factors

Report of the Directors

Operating and financial review

Directors’ information

Other matters

Remuneration Report

Directors' signatures

Auditor's independence declaration

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Financial report

Income statements

Statements of comprehensive income

Balance sheets

Statements of cash flows

Statements of changes in equity

Notes to the financial statements

Directors' declaration

Report on the audit of the financial report

Additional information

Glossary

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2022 Annual Report

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Our business in 2022 
 
 
 
 
 
 
 
 
 
 
 
 
 
This page has been intentionally left blank.2022 at a glance

Key financial performance measures

Dividend per share (for 
the full year)

Common Equity Tier 1 
capital ratio

$1.51

$0.24 higher than 2021

11.51%

149 bp decrease 
from 2021

Statutory net profit

$6.89bn

8.3% increase from 2021

Cash earnings(1)

$7.10bn

8.3% increase from 2021

Cash return on equity(1)

11.7%

100 bp increase from 2021

Diluted Cash EPS (cents)(1)

211.7

10.8% increase from 2021

Other key performance measures

Net Promoter Score (NPS) 
- Consumer(2)(3)

0

#1 among major 
Australian banks

NPS - Business(2)(5)

-5

#2 among major 
Australian banks

Finance to drive positive 
social impact

Colleague 
engagement score(9)

$70.8bn

Cumulative environmental 
financing (met target of 
$70bn by 2025)(7)

76

2 points below top 
quartile target score 
of 78

NPS - High Net Worth and 
Mass Affluent(2)(4)

-5

Equal #1 among major 
Australian banks

Relationship Strength 
Index - Corporate(6)

#1

Among major 
Australian banks

$3.61bn

Cumulative affordable 
and specialist housing 
financing (met target of 
$2bn by 2023)(8)

(1) Full detail on how cash earnings is defined, a discussion of non-cash earnings items and a full reconciliation of statutory net profit attributable to owners of NAB is set 
out in Note 2 Segment information of the Financial Report on page 157. Statutory return on equity and statutory earnings per share (EPS) are presented on page 99.
(2) Net Promoter® and NPS® are registered trademarks and Net Promoter Score and Net Promoter Systems are trademarks of Bain & Company, Satmetrix Systems and Fred 

Reichheld. NPS results are shown as a six month rolling average to September 2022. Prior year numbers have been restated and not been assured by EY.

(3) Sourced from DBM Consultants Consumer Atlas, results are shown as a six month rolling average to September 2022. A number of changes have been made to our 

Strategic NPS measure to align more closely to the Group Strategy. Consumer NPS now excludes consumers with Personal income of $260k+ and/or investible assets 
$1m+. Ranking based on absolute scores, not statistically significant differences.

(4) Sourced from DBM Consultants Consumer Atlas, results are shown as a six month rolling average to September 2022. Includes consumers with personal income of 

$260k+ and/or investible assets $1m+. Ranking based on absolute scores, not statistically significant differences.

(5) Sourced from DBM Consultants Business Atlas, results are shown as a six month rolling average to September 2022. Business NPS is now based on equal (25:25:25:25) 

combined weighting of NAB turnover segments: Micro (Up to $100k turnover), Small ($100k-$5m turnover), Medium ($5m-$50m turnover), Large ($50m+). Ranking based on 
absolute scores, not statistically significant differences.

(6) Peter Lee Associates – Large Corporate and Institutional Relationship Banking Survey Australia 2022. Ranking against all banks included in survey.
(7) Represents total cumulative new flow of environmental financing from 1 October 2015. Refer to NAB's 2022 Sustainability Data Pack for a further breakdown of this 

number and reference to how progress towards NAB's environmental finance target is calculated.

(8) Affordable and specialist housing includes affordable housing, specialist disability accommodation, sustainable housing. This includes loans made under the First Home 
Guarantee, as part of the Home Guarantee Scheme (previously the First Home Loan Deposit Scheme) for properties under the national median house price, and for 
borrowers with taxable income below the national median household income. Progress is based on total lending facilities committed, where first drawdown occurred 
during the target period. This number does not reflect debt balance. Only the 2022 and 2021 portion of the cumulative progress figure has been assured by EY.

(9) 2022 Heartbeat Survey conducted by Glint, score based on August 2022 survey. Includes Australia and New Zealand colleagues, excludes external contractors, 

consultants and temporary colleagues.

2022 Annual Report

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Chair's message

Focus on strength and capability

NAB has continued its journey this year to be a stronger 
bank. We have a more focused and capable business. This 
has enabled NAB to grow safely while supporting customers 
impacted by economic challenges and natural disasters.

Continuity and strength in our leadership and strategy has 
underpinned stability.  We have also made the business 
better. NAB’s products and processes are simpler, benefitting 
customers and our people. There remains more to do.

Investment in NAB’s digital, data and analytics capability 
is helping us approve loans faster and provide more 
reliable digital banking services. Strong technology platforms 
protect customers against the escalating threat of cyber-
attacks and fraud. However, we are alert to the need for 
continued vigilance.

As we have improved the bank, we have kept the lessons 
of the Financial Services Royal Commission and NAB’s self-
assessment front of mind in maintaining a steadfast focus 
on culture and risk management. Many of the issues identified 
are now behind us, but they constantly remind us to get the 
basics right.

Earlier this year we entered into an Enforceable Undertaking 
with our anti-money laundering regulator, AUSTRAC. This 
follows an enforcement investigation undertaken by AUSTRAC 
in relation to NAB’s compliance with Australia’s anti-money 
laundering and counter-terrorism financing laws.

We are building better capability and improving controls in 
financial crime risk and are on track to deliver the actions 
agreed with AUSTRAC.

Building a better bank

NAB is making excellent progress on our strategy and the 
Board is encouraged to see the operational results that this 
is delivering.

This is reflected in improved earnings with all businesses 
contributing to underlying profit growth, and significant and 
sustainable momentum across the Group. Our most recent 
colleague engagement score is 76, compared with 77 in July 
2021, and is close to the latest top quartile score of 78.

Taking all this into account, the Board has determined 
dividends for the year of 151 cents per share, returning $4.8bn 
in total to shareholders.

Total shareholder return was 8.6 per cent in the 12 months to 
September 2022, against an average negative return of 12.9 
per cent for NAB’s major bank peers.

Remuneration outcomes determined by the Board for 
financial year 2022 reflect an assessment of performance 
against all targets in NAB’s 2022 plan, including financial 
performance, customer outcomes, colleague engagement 
and safe growth.  NAB’s performance against peers has also 
been reflected in overall remuneration outcomes.

Future readiness

In view of the challenges of recent years, we are cautious as 
to what lies ahead. Economies globally are facing new trials 
and uncertainty remains. Actions taken by foreign leaders 
often have an impact on Australia and New Zealand.

NAB’s leadership has the experience and strategy to manage 
the challenges that we face. While we are alert to the issues 
that rising interest rates, inflation and geopolitical risks may 
bring, we have demonstrated our ability to manage through 
this and look after our customers.

The Australian economy is resilient and we are in a strong 
position to take on any challenges that arise. Identifying long-

6

National Australia Bank

term shifts in NAB’s broader operating environment and acting 
appropriately is critical to protecting and building value for 
shareholders and helping our communities prosper.

Climate change is one of – if not the – most significant long-
term challenges and opportunities of our time.

The Federal Government’s legislated 2030 and 2050 emissions 
reduction targets and associated changes provide welcome 
certainty and send a strong investment signal to businesses 
and the world.

At NAB, we’re taking action to address the issue through 
what we can control: finance. Our goal is to align our lending 
portfolio to net zero emissions by 2050. This year we have set 
2030 decarbonisation targets for the intensive priority sectors 
of power generation, oil and gas, thermal coal mining and 
cement production.

NAB will support its customers through the transition and help 
fund the investments required.

Another major opportunity in the year ahead is the prospect 
of a national referendum on the Constitutional recognition of 
Indigenous Australians. As a bank, we thrive when we operate 
in cohesive, well-functioning communities. Recognition is 
an important step forward and why NAB is supporting the 
proposed Voice to Federal Parliament.

Board renewal

Ensuring your Board is well appointed to carry the bank 
forward is a constant focus.

Kathryn Fagg, Doug McKay and I will stand for re-election at the 
Annual General Meeting with the full support of the Board and 
we are anticipating appointments in 2023 that will enhance the 
diverse skills and experience of directors.

On behalf of the Board, thank you for your ongoing support. 
To the team at NAB, thank you for your hard work to serve 
customers well and help our communities prosper. We’re not 
there yet, but we are getting closer to being the bank we want 
to be.

Philip Chronican, Chair

Directors' declaration The directors of National Australia Bank Limited declare that: (a) in the opinion of the directors, the financial statements and notes for the year ended 30 September 2022, as set out on pages148 to 244, are in accordance with the Corporations Act 2001 (Cth), including:i) in compliance with Australian Accounting Standards (including Australian Accounting Interpretations), International FinancialReporting Standards as stated in Note 1 Basis of preparation, and any further requirements of the Corporations Regulations2007;andii) give a true and fair view of the financial position of NAB and the Group as at 30 September 2022, and of the performance of NABand the Group for the year ended 30 September 2022.(b)in the opinion of the directors, there are reasonable grounds to believe that NAB will be able to pay its debts as and when theybecome due and payable.( c)the directors have been given the declarations required by section 295A of the Corporations Act 2007 (Cth) for the year ended30 September 2022.Signed in accordance with a resolution of the directors. Philip Chronican Chair 9 November 2022 Ross McEwan CBE Group Chief Executive Officer 9 November 2022 2022 Annual Report 245 ;::;. C C :::JCl'JC 0 u; "-' -"-' ct {f. {f. (!) ll) .... :::J 00 < ll) C (D (/) G) ...... o � (!) (!) -, 3 :::J (I) cg :::J (') .... ;;i :3 0) :J Jg -A (!) iii 3 ;,; (D :::J ...... ,..,.::r(D :J: C)