Sydney, June 23, 2026, 03:07 (AEST)
- NAB ended at A$37.87 on Monday, up 0.34%. The S&P/ASX 200 gave up 0.14%.
- NAB’s deposit hedge is another support few are talking about. It may lift second-half margins by roughly five basis points.
- The May inflation print out Wednesday will test views on rate moves and credit risk for business.
National Australia Bank (ASX:NAB) heads into Tuesday with a slight lead as financials climbed and the broader Australian market lost ground. NAB shares closed Monday close to A$37.90, up as the financial sector gained 0.5%.
For ASX:NAB, what’s holding up earnings is more important than the size of the move. Competition is driving down returns on new loans. Stable deposits, taking longer to reprice, are still pushing yields higher for the bank and helping NAB’s margins while rates stay high.
Sectors moved together. Commonwealth Bank and ANZ both rose roughly 0.6%, just ahead of NAB, after lower oil prices eased nerves about a new inflation hit. Global X’s Marc Jocum said, “geopolitical deals are often signed faster than they are honoured.” Brent crude lost more ground overnight while the U.S. and Iran continued talks. Market Index
NAB’s net interest margin for the March half was up three basis points to 1.81%. Stripping out Markets & Treasury and liquid assets, the margin didn’t move: lending took off four basis points, but deposits and the “replicating portfolio” put back four. NAB
Replicating portfolio isn’t getting much attention. It works as a treasury hedge, using a steady chunk of customer deposits for long-term bets or hedges, not just rolling them daily. NAB figures its deposit and capital portfolios might lift second-half margin by around five basis points. NAB also says an eight-basis-point swing in a major wholesale-funding spread could move annualised margin by about one basis point.
Scale matters for NAB. As of March, the bank had A$306 billion in Australian business loans, or around 22% of the market, lifted by 11.5% lending growth from a year ago. Even a small move in pricing makes a difference at that size. But being concentrated at that level also means trouble in small and mid-market firms hits harder.
Cheaper oil is a help, but it’s not a fix for the load companies still face from higher rates and pressure on lending margins. “Businesses are challenged by higher fuel costs, supply disruptions, inflation and elevated interest rates,” Chief Executive Andrew Irvine said in May. That strain hasn’t gone away after this year’s rate hikes. NAB News
RBA kept its cash rate steady at 4.35% on June 16 after three hikes earlier in 2026. Investors now look to May CPI numbers out Wednesday at 11:30 AEST. Annual inflation slowed to 4.2% in April. Trimmed-mean inflation, which omits big price swings, ticked higher to 3.4%.
NAB Chief Economist Sally Auld says “the next move in the cash rate is likely to be down, but the timing is uncertain.” A soft inflation print would back that call and bring some relief for borrowers, but it may cut the tailwind for deposit hedges. If inflation runs hot, it’s the other way: more yield for the bank, but credit risk climbs. NAB News
NAB’s numbers are starting to show some pressure. Non-performing business exposures hit 2.03% of gross loans and acceptances in March, barely moving from September but up from 1.87% a year ago. The impairment-charge ratio came in better at 0.19%. If oil prices pick up or inflation comes in hotter, NAB stands to make more on deposits but could take a hit from borrowers. That’s the balance-sheet risk left after Monday’s move.
