Investor presentation 5 May 2011 Cameron Clyne, Group Chief Executive Officer Mark Joiner, Executive Director Finance National Australia Bank Limited ABN 12 004 044 937 Solid result continued progress against strategy Revenue Cash earnings Cash ROE Statutory net profit Mar 11 Sep 10 Change Mar 10 (%) 15.1% 2,428 13.5% 2,129 160bps 14.0% 12.9% 2,095 Change (%) Tier 1 ratio 9.19% 8.91% 28bps 9.09% 10bps Dividend (100% franked) (cps) 8,799 8,401 4.7% 8,237 6.8% 2,668 2,388 11.7% 2,193 21.7% 84 78 Half year to 7.7% 74 13.5% 220bps 15.9% Financial highlights Increased cash earnings Strong balance sheet Improving ROE Increased dividend Optimistic on outlook still room for caution Multi-speed Australian economy Developed economies on better footing Impact of natural disasters Regulatory and political landscape still uncertain NAB well positioned Reputation strengthened Solid momentum Positioned for improved economic outlook 2
Overall macro outlook improving Economic outlook Global economic recovery continuing growth rates differ across regions Australian economy solid but floods will impact near term growth UK and NZ still subdued Banking regulation Basel III requirements clearer local interpretation still to be resolved UK environment evolving Political environment Ongoing political and consumer scrutiny 3 Strong progress well positioned for the future Group Positive performance momentum Growth and share gains Strong balance sheet Efficiency improvements Stronger on leadership and culture Business Banking Consolidated market position Personal Banking Differentiated and growing Wholesale Banking Focus on core franchise MLC & NAB Wealth Investing to capture growth International Operations Managing for value/preserving optionality Increased market share Grew lending above system Added over 350 bankers since 2009 Established foundations for cross-sell Rebased and differentiated with good momentum Continuing to gain share New channels performing well Continued focus on process and service improvement Cross-sell progress Strength in Specialised Finance and Global Capital Markets Well positioned for regulatory change Attracting new advisers M&A integration continues to progress well Building nabinvest SGA managed down risk BNZ continued solid performance UK Banking positioned for market recovery, maintaining optionality GWB progressing well 4
Transforming the way we do business: 2009-2014 Customer experience improved End state Service delivery enhanced Ageing infrastructure replaced Operational risk reduced Key programmes Infrastructure & Network Transformation Replatforming Programme (NextGen) Customer Process Transformation Achievements to date IBM infrastructure and hosting partnership complete Network modernisation commenced 28% of sites upgraded Target operating state defined Platform build in progress Activated some functionality (eg, customer analytics) Customer experience and end-to-end processes defined Process transformation commenced (eg, mortgages) UBank working well CY11 priorities Contact centre voice infrastructure largely complete Continue to progress payments transformation Network modernisation completed New Australian General Ledger operational Securitisation platform additional capability deployed Foundation release of Core Banking deployed New private client platform launched Further develop UBank Mortgage transformation largely complete 5 2011 outlook Continuing to make solid progress advancing our strategic priorities Well placed to navigate economic, regulatory and political uncertainty Will continue to leverage strengths to support ongoing franchise momentum and ROE improvement 6
1H11 Financials Group financial result Half year to Mar 11 Sep 10 Mar 10 Change on Sep 10 Change on Mar 10 Net interest income 6,304 6,174 6,114 2.1% 3.1% Other operating income (incl MLC) 2,495 2,227 2,123 12.0% 17.5% Net operating income 8,799 8,401 8,237 4.7% 6.8% Operating expenses (3,991) (4,001) (3,861) 0.2% (3.4%) Underlying profit 4,808 4,400 4,376 9.3% 9.9% B&DDs (988) (1,033) (1,230) 4.4% 19.7% Cash earnings 2,668 2,388 2,193 11.7% 21.7% Cash ROE 15.1% 13.5% 12.9% 160bps 220bps NIM 2.23% 2.24% 2.26% (1bps) (3bps) Tier 1 ratio 9.19% 8.91% 9.09% 28bps 10bps Spot GLAs 459.2 448.0 434.5 2.5% 5.7% 8
Business unit contributions Home currency Half year to (m) Mar 11 Sep 10 Mar 10 Cash earnings attribution analysis by business ($m, constant currency) Change % on Sep 10 Change % on Mar 10 Underlying profit Business Banking 2,059 1,966 1,939 4.7% 6.2% Personal Banking 778 723 682 7.6% 14.1% Wholesale Banking 541 428 586 26.4% (7.7%) UK Banking 252 247 264 2.0% (4.5%) NZ Banking NZ$496 NZ$494 NZ$449 0.4% 10.5% MLC & NAB Wealth 388 360 367 7.8% 5.7% Specialised Group Assets 115 (6) (135) large large Other^ 148 117 116 26.5% 27.6% Group underlying profit 4,808 4,400 4,376 9.3% 9.9% 83 6 101 32 10 (13) 121 (27) (33) 2,388 2,668 Sep 10 Business Banking Personal Banking Wholesale Banking UK Banking NZ Banking MLC & NAB Wealth SGA Other ^ FX Mar 11 9 ^ Other comprises Group Funding, Group Business Services, other supporting units, Asia Banking and GWB Revenue momentum Revenue momentum Other operating income 8,514 8,392 171 109 704 634 1,262 1,273 695 717 1,536 1,308 8,237 8,401 266 433 645 684 1,087 1,030 908 933 1,033 895 8,799 606 658 982 949 997 2,630 539 760 2,204 529 468 2,123 748 2,227 764 2,495 146 770 1,608 1,667 1,516 1,589 1,669 302 213 348 2,538 2,684 2,782 2,837 2,938 1,410 1,417 1,263 1,255 1,231 Mar 09 Business Personal Wholesale MLC UK NZ Other* * Includes SGA, GWB, Group Funding and other (79) (210) (190) (5) Mar 09 Fees & Commissions Wholesale Markets & Treasury MLC Other 10
Net interest margin Group net interest margin attribution analysis 0.05% (0.01%) (0.02%) (0.02%) (0.01%) Business unit net interest margin Half year to (%) Mar 11 Sep 10 Mar 10 Business Banking 2.57 2.50 2.51 2.24% 2.23% Personal Banking 2.22 2.28 2.34 UK Banking 2.33 2.28 2.40 Sep 10 Lending Margin & Mix Deposit Margin & Mix Funding & Liquidity Cost Markets & Treasury Other Mar 11 NZ Banking 2.24 2.24 2.08 - Current NIMs affected primarily by asset repricing, deposit mix and skew to mortgages in current growth At business unit level, asset growth skew most pronounced in Personal Banking Future NIM likely to be affected by heightened asset competition, emphasis on high Basel III value deposits, rising wholesale funding and liquidity costs, and change in mix of asset growth 11 Jaws and investment spend a Jaws and banking CTI momentum CTI 2H09 44.5% 1.1% -2.5% -1.4% 2H09 v 1H09 Expense growth Revenue growth CTI 1H10 45.5% 1.3% -3.1% -1.8% 1H10 v 2H09 CTI 2H10 46.2% 3.6% -1.6% 2.0% 2H10 v 1H10 CTI 1H11 43.9% 4.7% -0.2% 1H11 v 2H10 +4.9% CTI Banking Cost to Income Ratio Investment spend 331 483 399 556 522 9% 4% 5% 3% 4% 27% 33% 45% 51% 58% 47% 51% 39% 35% 25% 17% 12% 11% 11% 13% Mar 09 Compliance / Operational Risk Efficiency and Sustainable Revenue Infrastructure Other 12
Group B&DD charge and asset quality B&DD charge half yearly 2,300 2,004 1.00% 1,763 1,811 1,900 0.80% 1,230 1,500 1,033 988 1,100 726 0.60% 700 400 0.40% 300 0.20% -100 Sep 07 Mar 08 Sep 08 Mar 09 0.00% Specific Provision Collective Provision Economic Cycle Adjustment ABS CDOs & Investments held to maturity B&DD Charges as % of GLAs (annualised) B&DD charge to GLAs compared to norms 0.20% 0.35% 0.57% 0.82% 0.87% 0.57% 0.51% 0.43% Sep 07 Mar 08 Sep 08 Mar 09 NAB long term average 1980-2010 (43bps) NAB benign period average 1994-2007 (24bps) B&DD charges as % of GLAs (annualised) 90+ DPD & impaired assets as a % of gross loans and acceptances by product 2.0% 1.5% 1.0% 0.5% 0.0% Sep 07 Mar 08 Sep 08 Mar 09 Mortgages Impaired Business 90+ DPD Business Impaired Mortgages 90+ DPD Retail Unsecured 90+ DPD Impaired 90+DPD Coverage ratios 2.00% 1.75% 1.50% 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% Basel II RWAs Sep 07 Mar 08 Sep 08 Mar 09 GRCL top up (pre-tax) as % of Credit Risk Weighted Assets (ex Housing) Collective Provisions as % of Credit Risk Weighted Assets (ex Housing) Total Provisions as % of Gross Loans and Acceptances 13 Tier 1 capital position (%) Business Capital Generation = 27bps 8.91 0.77 (0.32) (0.01) (0.17) (0.09) 0.07 0.06 (0.03) 9.19 2.11 2.07 6.80 Tier 1 Hybrid Core Tier 1 7.12 Sep 10 $30.7bn Cash Earnings $2.7bn Dividend (net of DRP) ($1.1bn) Net RWA Growth $0.6bn FCTR ($0.6bn) Non-Cash Earnings ($0.3bn)* UK Pensions Deficit $0.2bn DTA $0.2bn Other ($0.1bn) Mar 11 $31.7bn 14 * Non-cash earnings affect on Tier 1 after adjusting for Distributions and Treasury Shares Other consists primarily Wealth Management adjustment (3bps) and other immaterial movements
Regulatory reform status update Capital reforms Core Tier 1 7.12% Mar 11 Actual 8.32% Basel III est. (BIS Alignment) 7.0% Basel III minimum 6.73% * Basel III est. (Ignoring Upside) * Assumes current approach for Wealth Management. Counterparty credit risk estimate now included Basel III final reform package delivered APRA consultation underway. Discussion papers expected mid 2011 Well placed to manage capital impact Existing hybrid and subordinated debt expected to amortise post January 2013 Uncertainties still remain, including extent of harmonisation Funding reforms Balance sheet transition underway to ensure compliance with > Liquidity Coverage Ratio (LCR) from January 2015 > NSFR from January 2018 Engaging with APRA on new Basel standards RBA secured facility supports LCR compliance. Main challenges likely to be: > Averaging up quality of deposits and liquid assets > Continuing to term out funding > Sizing facility and clarifying RBA fee Challenge on NSFR > LCR transition is supportive > Taking covered bonds to issuance 15 Note: Supervisory confirmation required Funding and liquidity Group Stable Funding Index (SFI) Term funding tenor of issuance 78% 83% 84% 84% 19% 20% 20% 19% 5.5 59% 63% 64% 65% 4.6 4.7 4.8 Customer Funding Index Term Funding Index Weighted average maturity (years) of term funding issuance Term funding volume of new issuance Liquid asset holdings 16.7 15.8 15.2 13.1 0.3 12.8 1.6 15.1 90 86 89 93 19 18 17 21 71 68 72 72 Senior and Sub Debt Secured Funding Liquid Assets Internal Securitisation (contingent liquidity) 16
Return on equity Contribution to movement in Group return on equity (ROE) MLC & NAB Wealth return on regulatory capital* (RORC) 13.5% 0.8% 0.5% 0.3% 0.2% (0.1%) (0.1%) 15.1% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 10 SGA WB BB UK PB Other Mar 11 * Including IoRE Insurance Investments incl Private Wealth MLC & NAB Wealth Return on average RWAs* 2.27% 2.19% 2.32% 2.34% 1H10 2H10 1H11 1H11 Group (1.55%) 1.60% 1.55% 1.62% 1.82% 1.84% 1.33% 1.42% 1.44% 0.38% 0.35% 0.46% 0.80% negative negative BB PB WB NZ UK SGA * Average of spot opening and closing balances 17 Specialised Group Assets - SCDO update Post balance date, removed the sold protection on three of the six SCDOs What we have done Exited the sold protection of the three short dated SCDOs Original SCDOs and their matching hedges ( bought protection ) retained Impact Removed $629m of credit risk $2bn RWA reduction P&L loss in 2H11 of $9m post tax MTM noise will continue Regarding the remaining SCDOs Any termination of the sold protection of the remaining SCDOs will be subject to market conditions and appropriate pricing levels Estimated incremental impacts had the sold protection on the remaining three SCDOs been removed at the same time: Remaining $821m credit risk removed Further $2bn RWA reduction Acceleration of hedge premium cost not yet expensed (approx $360m pre tax one-off) and; MTM volatility eliminated Additional accounting loss on exit of the remaining SCDO assets would be applied against the existing $160m management overlay 18
Summary and outlook Solid momentum and upside potential mainly through the Australian franchises Focus on ROE at Group and Business Unit level Disciplined with costs; managing expense growth to positive jaws Balance sheet settings sound and provide flexibility Regulatory, political and economic risks have reduced but continue to present challenges 19 Questions
Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook Business Banking Business lending volumes 1 0.6 0.8 (0.8) 0.3 (0.7) 0.9 (0.2) 0.3 127.9 128.8 129.1 Mar 10 nabbusiness Corporate & Specialised Banking Sep 10 Working Capital Services Institutional Banking nabbusiness Corporate & Specialised Banking Enterprise cross-sell focus Total Customer Returns Mar 11 Working Capital Services Institutional Banking Business lending market share Sep 08 Mar 11 Business Lending inc Bill Acceptances volume growth 26% 24% 22% 20% 18% 16% 14% 12% 10% Sep 08 Mar 09 Net interest margin NAB* Bank 1 Bank 2 Bank 3 Source: APRA Monthly Banking Statistics Sep 2008 Mar 2011. Lending represents loans & advances to non-financial corporations plus bill acceptances of customers. * Represents APRA data adjusted historically to include Business Markets Flexible Rate Loans 3.24% 3.31% 1.02% 1.01% 3.60% (%) 2.45 2.51 2.50 2.57 2.22% 2.30% FY10* Mar 11 Target State TCR Lending TCR Non-Lending TCR * Figures have been adjusted to include additional products cross-sold not previously captured 22 (1) Updated to reflect transfers of customers between business units
Business Banking Business lending Customer deposits Housing lending 0.0% 0.8% 0.0% 7.2% 5.5% 1.3% 1.9% 3.8% 3.6% 128 128 129 129 73 77 78 84 52 53 55 57 S e p 0 9 M a r 10 S e p 10 M a r 11 S e p 0 9 M a r 10 S e p 10 M a r 11 Sep 09 M ar 10 Sep 10 M ar 11 Costs Cash earnings on average assets 836 843 871 879 31.1% 30.3% 30.7% 29.9% 0.86% 1.20% 1.18% 1.25% X% Cost to Income Ratio 23 Business Banking: Net interest margin Sequential margin analysis 0.07% (0.02%) (0.02%) (0.08%) 0.09% (0.02%) 0.02% 0.02% 2.51% 2.50% 2.57% Mar 10 Lending Margin Deposit Margin Funding & Liquidity Cost Other Sep 10 Lending Margin Deposit Margin Funding & Liquidity Cost Other Mar 11 March 11 v March 10 0.17% (0.03%) (0.11%) 0.03% 2.51% 2.57% Mar 10 Lending Margin Deposit Margin Funding & Liquidity Cost Other Mar 11 24
Business Banking Revenue Underlying profit 2.0% 3.7% 2,684 442 2,782 2,837 470 485 3.6% 2,938 492 OOI 4.9% 1.4% 4.7% 2,242 2,312 2,352 2,446 NII 1,848 1,939 1,966 2,059 B&DD charge Cash earnings 49.7% 41.1% 0.3% 7.6% 757 (7.6%) 6.1% 381 410 385 776 1,095 1,098 1,181 25 Business Banking: Total Diverse assets^ Housing 31% Business 69% Property & Business Services 41% Portfolio quality* Non Retail LGD Model Change in Nov 09 72% 69% 68% 67% Other 18% Agriculture Forestry and Fishing 13% Wholesale Trade 5% Construction 4% Retail Trade 7% Accommodation, Cafes, Pubs & Re staurants 5% Manufacturing 7% 28% 31% 32% 33% Sep 09 M ar 10 Sep 10 M ar 11 Investment grade equivalent Sub-Investment grade Well secured business products B&DD charge 15% 14% 13% 14% 28% 28% 27% 25% 57% 58% 60% 61% S e p 0 9 M a r 10 S e p 10 M a r 11 Fully Secured** P artially Secured Unsecured 800 600 400 200 0 0.90% 0.75% 0.60% 0.45% 0.30% 0.15% 0.00% B&DD charge B&DD / GLAs (annualised) (RHS) 26 ^ Based on product split * Based upon expected loss ** Based upon security categories in internal ratings systems
Business Banking: SME Business * Diverse assets^ Portfolio quality** Personal 36% Business 64% Property & Business Services 47% Non Retail LGD Model Change in Nov 09 67% 62% 62% 59% Other 13% Finance & Insurance 4% Wholesale Trade 6% Construction 8% Retail Trade 8% Accommodation, Cafes, Pubs & Res taurants 8% Manufacturing 6% 33% 38% 38% 41% Sep 09 M ar 10 Sep 10 M ar 11 Investment grade equivalent Sub-Investment grade Well secured business products B&DD charge 27 7% 6% 6% 6% 27% 26% 25% 24% 66% 68% 69% 70% S e p 0 9 M a r 10 S e p 10 M a r 11 Fully Secured*** P artially Secured Unsecured 300 250 200 150 100 50 0 B&DD charge ^ Based on customer split * SME business data reflects the nabbusiness segment of Business Banking which supports business customers with lending typically up to $25m, excluding the Specialised Businesses ** Based upon expected loss *** Based upon security categories in internal ratings systems 0.60% 0.45% 0.30% 0.15% 0.00% B&DD / GLAs (annualised) (RHS) Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook
Personal Banking MFI customer satisfaction 1 Sweeney research brand tracker 2 (%) 77.2 74.1 74.1 75.4 74.7 74.8 72.8 1.0% 5.1% 70.8 73.8 69.0 Mar 09 NAB Weighted average of three major bank peers Open and upfront Transparent with fees and charges Customers are at an advantage A bank for people like me A leader in making banking fairer 37% 37% 35% 38% 37% 39% 39% 36% 40% 41% 44% 42% 40% 43% 42% Sep 10 Dec 10 Mar 11 Peer Average 40% X 40% X 38% X 43% X 40% NAB vs Peers Home loan multiple of system growth Net transaction account growth ( x ) ( # ) 2.7 3.4 123,173 143,700 79,911 0.8 1.1 15,755 29 (1) Roy Morgan Research, Aust MFIs, population aged 14+, six month moving average. Customer satisfaction is based on customers who answered very/fairly satisfied. NAB compared with the weighted average of the three major banks (ANZ, CBA, WBC) (2) Sweeney Research Brand Tracker, 3 months ended Mar 2011 Personal Banking Cash earnings Revenue (32.1%) 34.4% 1.4% (9.1%) 4.8% 5.0% 467 317 426 432 1,667 1,516 1,589 1,669 Costs Net interest margin 791 834 866 891 (%) 2.64 2.34 2.28 2.22 47.5% 55.0% 54.5% 53.4% X% Cost to Income Ratio 30
Personal Banking Housing loans Customer deposits 8.0% 9.5% 10.5% 9.3% 3.4% 10.1% 88 95 104 115 54 59 61 68 Housing loan market share 1 Household deposits market share 2 12.8% 12.8% 13.3% 13.8% 13.1% 13.4% 13.6% 14.1% 31 (1) RBA Financial System, NAB as at Mar 2011 (2) APRA Banking System, NAB as at Mar 2011 Personal Banking: Asset quality B&DD charge Cards & personal loans 90+ DPD (5.0%) 49.8% (40.5%) 1.17% 1.26% 1.16% 220 231 116 163 1.09% Mortgage 90+ DPD and impaired Total 90+ DPD and impaired 0.95% 0.85% 0.67% 0.61% 998 967 836 851 32
Personal Banking: Net interest margin Sequential margin analysis 0.01% (0.01%) (0.04%) (0.02%) 0.06% (0.01%) (0.04%) (0.05%) (0.01%) (0.01%) 2.34% 2.28% 2.22% Mar 10 Lending Margin Deposit Margin Funding & Liquidity Cost Asset & Liability Mix Sep 10 Lending Margin Deposit Margin Lending Mix Deposit Mix Funding & Liquidity Cost Other Mar 11 March 11 v March 10 0.07% (0.03%) (0.04%) (0.10%) (0.02%) 2.34% 2.22% Mar 10 Lending Margin Deposit Margin Funding & Liquidity Cost Asset & Liability Mix Other Mar 11 33 Advantedge operating performance Home loans under administration - aggregator businesses Monthly settlement volumes 113 1.6x system growth 119 1.1x system growth 124 1.1x system growth 128 97% increase in activity 70% increase in activity 197 7% increase in activity 358 335 100 Oct 09 Mar 10 Sep 10 Mar 11 Oct 09 Mar 10 Sep 10 Mar 11 Home loans under management (spot) 25.4% 7.9 Home loans under administration in the aggregator businesses continue to track in line with system 4.6 6.5% 4.9 28.6% 6.3 Loans under management 61% higher than same time last year Strong pipeline remains Oct 09 Mar 10 Sep 10 Mar 11 34
Change in profile of mortgage approvals LVR breakdown of final approvals (Australian Region) Risk grade distribution of 90%+ LVR (%) 100 (%) 100 80 80 60 60 40 40 20 20 0 Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar 08 09 09 09 09 10 10 10 10 11 LVR 60% or less LVR 60.01% to 70% LVR 70.01% to 80% LVR 80.01% to 90% LVR >90% 0 Dec 08 Mar 09 Jun Sep Dec Mar Jun Sep Dec 09 09 09 10 10 10 10 Origination Period Very High High Medium Low Very Low Mar 11 LVR breakdown of Homeside final approvals (%) 100 80 60 40 20 0 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 LVR 60% or less LVR 60.01% to 70% LVR 70.01% to 80% LVR 80.01% to 90% LVR >90% Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Excludes Advantedge mortgages portfolio 35 Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook
Wholesale Banking Wholesale Banking Risk Management Solutions - partnering with bank wide franchises NAB Asset Servicing 24 22 20 18 16 14 12 10 Jan 03 Primary % Supplier Share Foreign Exchange Options Forw ard FX Contracts Interest Rate Swaps Spot FX Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Source: East & Partners Australian Corporate Banking Markets January 2011 Jan 11 Delivering synergies with the Group s Wealth and Financial Institutions Group franchises to maximise opportunities from global wealth pools Well placed to benefit from proposed changes to superannuation contributions (Cooper report) Asset under custody & administration 506 487 531 561 Sep 04 Sep 05 Sep 06 Sep 07 599 600 Sep 08 Sep 09 660 701 Sep 10 Mar 11 Targeting infrastructure and natural resources Leading debt capital solutions HS1 Limited GBP1,310m Acquisition Debt & Core Working Capital Facilities Mandated Lead Arranger November 2010 Port of Brisbane AUD1,180m Acquisition and Growth Capex Facilities Mandated Lead Arranger November 2010 Hill M2 Upgrade AUD740m Project Finance Facility Mandated Lead Arranger November 2010 Rated #2 in the Australasian Mandated Lead Arranger league tables by Dealogic, lending AUD1.5bn over 19 transactions over 10.1% of the market 1 Rated #9 in the Asia Pacific mandated Lead Arranger league tables by Thomson Reuters 2 Source: (1) Dealogic Global Project Finance Review 2010; (2) Thomson Reuters Project Finance Review 2010 Brisbane Airport A$200m 8.25 Year Senior Issue Joint Lead Manager March: 2011 SMHL Securitisation Fund A$1,000m Australian RMBS Issue Joint Lead Manager March : 2011 TRUenergy US$ 495m Two USPP Note Issues Joint Agent November : 2010 January : 2011 Origin Energy A$2,150m & US$350m Syndicated Loan Facility Mandated Lead Arranger, Underwriter & Bookrunner March: 2011 #1 ranked Australian bank in cross-border US Private Placements, ranked #5 globally 1 #1 ranked Australian bank in the Global Underwriting Rankings, ranked #2 globally 2 #1 ranked book runner of Australian syndicated loans 3 Source: (1) Thomson Reuters; (2) Dealogic; (3) Dealogic Loan Review Q1 2011. 37 Wholesale Banking Cash earnings and underlying profit Revenue by line of business 251 430 613 1,093 535 853 403 586 302 428 393 541 826 196 92 538 1,536 224 429 883 1,308 232 1,033 420 274 148 656 611 895 997 263 298 169 158 463 541 Sep 08 Mar 09 Cash Earnings Underlying Profit Sep 08 Mar 09 Markets Treasury Other Other comprises of Asset Servicing, Specialised Finance and Financial Institutions B&DD charge 234 108 111 Good momentum in revenue and cash earnings Robust cost management from reduced process complexity 29 16 Improved credit quality (12) Sep 08 Mar 09 38
Wholesale Banking: Global Markets Trading income 500 400 300 200 100 0 20 15 476 10 208 270 318 256 206 268 5 0 Mar 08 Sep 08 Mar 09 Trading income outperformed both the first and second halves in 2010 notwithstanding difficult market conditions Trading (LHS) Average VaR Usage (RHS) Sales income Sales income improved against the second half of 2010 with increased market share and despite subdued business activity, a benign interest rate environment and a strong and stable $AUD lessening demand for risk mitigation products 282 268 407 338 355 257 273 Mar 08 Sep 08 Mar 09 39 Wholesale Banking: Asset quality Gross impaired assets ratio Collective provisions 400 3.0% 300 200 100 2.5% 2.0% 1.5% 1.0% 0.5% 129 219 313 233 233 209 159 0 Mar 08 Sep 08 Mar 09 0.0% Mar 08 Sep 08 Mar 09 Gross impaired assets Gross impaired assets as % of GLAs Improving credit quality of the portfolio driving both lower levels of impaired assets and reduced collective provisions Specific provisions down against prior halves Portfolio asset quality is stable and represents greater than 90% investment grade equivalent Specific provisions to gross impaired assets 200 60% 50% 150 40% 100 30% 20% 50 10% 0 0% Mar 08 Sep 08 Mar 09 Specific provisions Specific provisions to gross impaired assets 40
Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook MLC & NAB Wealth Investments cash earnings 6 29 (6) 8 (4) 4 (5) 8 (29) (4) 7 (14) (5) 167 185 162 Mar 10 FUM Private Wealth Volumes Investments Margin Expenses Tax Other Sep 10 FUM Expenses Private Wealth B&DDs Private Wealth NII Investments Margin Tax Other Mar 11 Insurance cash earnings 12 (12) (5) (2) 10 9 12 6 (7) (2) (10) 97 100 108 Mar 10 PIF Business Mix Claims Expenses Tax Sep 10 PIF Business Mix Earnings on the Assets backing the Insurance Portfolio Claims Expenses Tax Mar 11 42
MLC & NAB Wealth Movement in FUM Movement in investments margin (%) Retail Retail Retail 74% 72% 5.8 0.5 71% 2.6 (1.2) 0.5 (0.5) (0.02%) (0.02%) (0.01%) (0.04%) 114.2 116.1 121.9 0.93% 0.91% 0.84% Mar 10 Net flows Other Investment earnings Sep 10 Net flows Other Investment earnings Mar 11 Mar 10 FUM Mix Sep 10 FUM Mix Other Navigator cash mgmt Mar 11 * Transferred into NAB * Premiums in force 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 Aviva 11%p.a 4%p.a 11%p.a Mar 08 Sep 08 Mar 09 43 MLC & NAB Wealth Movements in operating expenses 6 5 6 14 (6) 7 (12) (7) 7 541 573 561 Mar 10 Private Bank operational capability Advisers * Acquired Nov 09, 5 months expense Mar 10 half Marketing & Advisory Support JBWere* Integration Benefits Other Sep 10 Integration Benefits Seasonality & Other Other Mar 11 Expenses Movements in FTEs 600 550 500 450 400 350 300 250 200 150 Private Bank JBWere and Aviva Mar 08 Sep 08 Mar 09 (#) 5,634 5,714 5,924 674 719 758 332 440 534 4,628 4,555 4,632 Mar 10 Sep 10 Mar 11 Salaried adviser FTEs Project FTEs BAU FTEs Project FTEs largely integration activity BAU increase due to adviser support and JBWere transition 44
Channel and adviser growth Investment sales by channel Insurance sales by channel 24% 45% 44% 41% 43% 28% 29% 30% 33% 27% 27% 29% 28% 15% 57% 52% 46% 41% 13% 15% 19% 35% 39% 40% Sep 09 Mar 10* Sep 10* Mar 11 Bank Aligned IFA * IFA sales were re-stated in 2010 to include Aviva Sep 09 Mar 10* Sep 10* Mar 11 Bank Aligned IFA * IFA sales were re-stated in 2010 to include Aviva Wealth adviser movement analysis (#) 211 (142) 178 (119) 113 101 (126) 165 1,346 JBWere Exits Recruits Sep 09 1,486 1,555 Recruits Sep 10 Exits Recruits Mar 10 1,727 Mar 11 Meritum Exits 45 Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook
New Zealand Banking Cash earnings Net interest margin (NZ$m) 5.2% 5.5% 7.1% 238 255 269 283 (%) 1.96 1.96 2.08 2.08 2.24 2.24 2.24 2.24 Sep Sep 09 09 Mar 10 Sep Sep 10 10 Mar 11 Mar 11 Revenue v expense growth B&DD charge (NZ$m) 792 814 861 865 (NZ$m) 89 88 99 95 368 365 367 369 Revenue Expenses 47 New Zealand Banking Business lending Retail lending (NZ$bn) (0.4%) (2.5%) 0.4% (NZ$bn) 1.5% 1.9% 1.5% 26.6 27.0 27.5 1.5 1.4 1.4 27.9 1.5 27.7 27.6 26.9 27.0 25.2 25.6 26.0 26.4 Housing Unsecured Personal Retail deposits Costs (NZ$bn) 5.3% 4.0% 5.6% 26.3 27.7 28.8 30.4 (NZ$m) 368 365 367 369 13.1 13.6 14.2 15.2 13.2 14.1 14.6 15.2 46.5% 44.8% 42.6% 42.7% BNZ P artners BNZ Retail X% Cost to Income Ratio 48
New Zealand Banking: Net interest margin Sequential margin analysis 0.19% (0.03%) (0.06%) 0.03% 0.03% 0.09% 0.00% (0.04%) (0.02%) (0.03%) 2.08% 2.24% 2.24% Mar 10 Lending Margin Deposit Margin Funding & Liquidity Cost Early Repayment Costs Other Sep 10 Lending Margin Deposit Margin Funding & Liquidity Cost Early Repayment Costs Other Mar 11 March 11 v March 10 0.28% (0.03%) (0.10%) 0.01% 2.24% 2.08% Mar 10 Lending Margin Deposit Margin Funding & Liquidity Cost Early Repayment Costs Mar 11 49 New Zealand Banking: Asset quality Total 90+ days past due as % GLAs (NZ$m) 300 0.6% 250 0.5% 200 0.4% 150 0.3% 100 0.2% 50 0.1% 0 0.0% Mar 08 Sep 08 Mar 09 90+ Days past due Total 90+ days past due as % GLAs Gross impaired assets as % GLAs 90+ DPD have increased from the prior half primarily due to business exposures. Current levels are still below the March 10 half The rate of growth in impaired assets has tapered off in recent halves Exposures in the commercial property, business lending and agriculture sectors are the main industry hotspots Net write-offs have declined sharply Net write-offs (NZ$m) 1,000 800 600 400 200 0 Mar 08 Sep 08 Mar 09 FV impaired Gross impaired assets GIA (including FV) as % of GLAs 1.5% 1.2% 0.9% 0.6% 0.3% 0.0% 0.27% 0.24% 0.18% 0.12% 0.13% 0.07% 0.09% Mar 08 Sep 08 Mar 09 Net write-offs to GLAs (annualised) 50
Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook UK Banking Business lending Personal lending Retail deposits ( bn) (2.1%) (2.2%) (1.1%) 18.9 18.5 18.1 17.9 7.9 7.3 6.8 6.5 11.0 11.2 11.3 11.4 ( bn) ( bn) 1.4% 0.7% 0.7% 4.7% 5.3% (1.3%) 14.3 14.5 14.6 14.7 2.3 2.1 2.0 1.8 21.5 22.5 23.7 23.4 12.0 12.4 12.6 12.9 Other business Commercial property Housing Unsecured Costs Net interest margin ( m) (%) 344 353 359 363 54.2% 57.2% 59.2% 59.0% 2.36 2.40 2.28 2.33 X% Cost to Income Ratio 52
UK Banking: Net interest margin Sequential margin analysis 0.08% (0.07%) (0.07%) (0.04%) (0.02%) 0.08% 0.04% (0.05%) (0.01%) (0.01%) 2.40% 2.28% 2.33% Mar 10 Lending Margin Deposit Margin Capital Benefit Liquid Assets Other Sep 10 Lending Margin Deposit Margin Capital Benefit Liquid Assets Other Mar 11 March 11 v March 10 0.15% (0.04%) (0.12%) (0.05%) (0.01%) 2.40% 2.33% Mar 10 Lending Margin Deposit Margin Capital Benefit Liquid Assets Other Mar 11 53 Funding mix Stable funding index Funding mix 100.6% 105.5% 105.3% 93.8% 21.9% 21.8% 20.1% 11.9% 71% 73% 66% 70% 61% 62% Mar 10 Mar 11 78.7% 83.7% 85.2% 81.9% 16% 16% 3% 3% 3% 2% 5% 6% 7% 6% 6% 4% Retail deposits Securitisation Structured finance Subordinated debt Market short term Medium term notes Parent company CFI TFI Retail cover ratio Stable funding index (SFI) and funding mix charts based on spot balances 54
UK Banking: Other operating income and expenses March 11 v March 10 Other operating income March 11 v September 10 Other operating income ( m) (8) 7 4 4 ( m) (2) 7 (4) (1) 127 134 134 134 Mar 10 PPI Refunds Profit Share Fees Other Mar 11 Sep 10 PPI Refunds Profit Share Fees Other Mar 11 Operating expenses ( m) 379 360 358 361 358 359 344 353 359 363 325 Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 55 UK portfolio composition March 2011 Total portfolio composition Gross Loans & Acceptances 32.8bn Mortgages 40% Business Lending 100% Mortgages Unsecured 32.8 bn 17.8bn 54% 13.1bn 40% 1.9bn 6% Business 54% Unsecured 6% Commercial Prop 6.3bn 35% Non Property 11.5bn 65% Residential 10.4bn 79% IHL 2.7bn 21% PL 0.8bn 43% Cards 0.5bn 26% Other 0.6bn 31% 2004 Total portfolio composition Mortgages 35% Investment 5.2bn 83% Development 1.1bn 17% 14.3 bn Business 51% Unsecured 14% 56
UK Banking: Asset quality Total 90+ days past due as % GLAs Coverage ratio ( m) 350 300 250 200 150 100 50 0 Sep 04 MarSep 05 05 MarSep 06 06 Mar 07 Sep 07 MarSep 08 08 MarSep 09 09 MarSep Mar 10 10 11 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 90+ days past due 90+ days past due as % of GLAs Coverage ratio (Total Provision to GLAs) 90+ days past due as a % of GLAs by product B&DD charge 0.6% ( m) 0.4% 0.2% 253 0.0% Mortgages Business Loans Personal 183 164 151 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 57 UK Banking: Gross impaired assets Gross impaired assets Gross impaired assets and 90+ DPD to GLAs ( m) 900 800 700 600 500 400 300 200 100 0 Mar 05 Sep Mar 05 06 Sep Mar 06 07 Sep Mar 07 08 Sep Mar 08 09 Sep Mar 09 10 Sep Mar 10 11 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Gross impaired assets Gross impaired assets as % of GL&As 3.44% 2.98% 3.15% 2.61% 0.80% 0.81% 0.89% 0.85% 1.76% 2.09% 2.34% 2.64% GIAs as % of GLAs 90+ DPD as % of GLAs Increase in gross impaired asset balances reflects impact of ongoing difficult economic and market conditions Commercial property exposures continue to dominate this asset category and whilst there has been some stabilisation in property prices the market for disposing of these assets is still operating below normal levels 58
Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook Great Western Bank Cash earnings Revenue (US$m) 15.4% 23.3% 27.0% (US$m) 20.4% 42.4% 14.9% 26 30 37 47 98 118 168 193 Costs Tangible assets & customers (US$m) GWB Acquisitions GWB Core 49 5 44 54 9 45 50.0% 45.8% 83 90 33 38 50 52 49.4% 46.6% (US$m) 7,497 7,483 4,585 4,953 254,000 252,000 439,000 425,000 X% Cost to Income Ratio Customers 60
Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook Specialised Group Assets Cash earnings & underlying profit 19 (258) (217) (697) 77 115 (6) (45) (127) (135) (217) (319) Sep 08 Mar 09 Cash Earnings Underlying Profit Portfolio income 66 (165) (84) (108) 18 139 80 163 138 127 125 100 4 59 80 (83) (30) (67) (139) (4) (80) (162) (14) (14) (1) (101) (65) (160) (6) (84) Sep 08 Mar 09 SCDO Risk Mitigation MTM Mngmt Overlay for Conduit & derivative trans Markets Counterparty Credit Val Adj Non Franchise Asset Income CDS Hedging MTM volatility B&DD charge RWAs 965 26.5 25.3 24.3 19.0 20.5 18.0 189 299 173 95 21 Sep 08 Mar 09 Sep 08 Mar 09 62
Specialised Group Assets: Rate of portfolio degradation slowing Gross impaired assets as % of GLAs Gross loans & acceptances (average) 800 600 400 200 0 Sep 08 Mar 09 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 14 12 10 8 6 4 2 0 Sep 08 Mar 09 Gross impaired assets Gross impaired assets as % of GLAs Specific provisions to gross impaired assets* Collective provisions^ as a % of credit RWAs* 200 40.00% 600 3.00% 150 30.00% 500 400 2.00% 100 50 0 Sep 08 Mar 09 20.00% 10.00% 0.00% 300 200 100 0 Sep 08 Mar 09 1.00% 0.00% Specific provisions Specific provisions to gross impaired assets * Net amount written off during 1H11 is $80m, (FY10 : $193m,) not included in the above Collective provisions Collective provisions as a % of credit RWAs ^ Includes $160m overlay * Net amount written off during 1H11 is $80m, (FY10 : $193m,) not included in the above 63 SGA Structured Asset Management Portfolio Overall performance 2011 Half Year Portfolio $4.9bn at 31 March 2011 ($5.2bn September 2010) Portfolio performance in 2011 Half Year as expected Ongoing close management attention SCDOs - $1.5bn One credit event occurred during the first half of the 2011 fiscal year, however this did not cause any losses in NABs SCDOs Corporate credit spreads generally tightened over the half year, and March market valuations show improvements relative to September year-end results. These positions will continue to exhibit MTM volatility in the future In April 2011 NAB terminated the post-risk mitigation (Leg 2) portion of Deals 1-3 at an economic cost of $59m, which resulted in a 2H11 accounting loss of $17m ($9m after tax), and a reduction of RWAs of $2bn Credit Wrapped ABS - $0.6bn One portfolio policy provider (AMBAC) defaulted in March 2010. The other (MBIA) is still performing Provision increased marginally by $2m to $85m to capture further weakening in US housing markets and recent regulatory developments affecting AMBAC 64
SGA Conduit Portfolio Summary* Movements between September 2010 and March 2011 Sep 2010 Mar 2011 Asset Backed CDO A$0.2bn Corporates (SCDOs) A$1.5bn Credit Wrapped ABS A$0.6bn (A$0.2bn) Changes due to repayments and maturities or restructured facilities (A$0.3bn) Decrease in exposure due to foreign currency exchange rate movements Asset Backed CDO A$0.2bn Corporates (SCDOs) A$1.5bn CMBS A$0.6bn Credit Wrapped ABS A$0.6bn NAB CLO A$0.4bn CMBS A$0.6bn Infrastructure Bonds A$0.3bn NAB CLO A$0.4bn Credit Wrapped Bonds A$0.7bn Infrastructure Bonds A$0.2bn Credit Wrapped Bonds A$0.7bn Leveraged Loans A$1.5bn Leveraged Loans A$1.4bn Subscription loans A$0.6bn Mortgages A$0.3bn Subscription loans A$0.4bn Mortgages A$0.2bn A$6.7bn A$6.2bn 65 * Includes Group s exposures (drawn and available to be drawn) initially funded by NAB sponsored and third party sponsored asset backed commercial paper conduits and SPE purchased assets Structured Asset Management Portfolio Summary Corporates (SCDOs) $1.5bn (as at 31 March 2011) Deal 1 Deal 2 Deal 3 Deal 4 Deal 5 Deal 6 Tranche size $241.9m $193.5m $193.5m $220.9m $300m (US$250m) (US$200m) (US$200m) (NZ$300m) $300m Portfolio notional amount (A$bn) $43 $17 $15 $28 $20 $26 Remaining pre-risk mitigation (i.e. "Leg 1") number of Credit Events to loss at average concentration/in descending order of concentration (@ 20% recovery for deals 4/5/6) 4/3 -/- 1/1 4/3 -/- -/- Attachment point 31 March 2011 3.77% 4.67% 5.97% 8.85% 6.07% 8.75% Detachment point 31 March 2011 4.32% 5.77% 7.23% 9.89% 7.14% 9.88% Tranche thickness 0.56% 1.10% 1.26% 1.04% 1.07% 1.13% Recovery rate 70% 50% 40% Floating Floating Floating Maturity (years) 3.0 2.5 2.7 6.3 6.0 6.3 Number of Reference Entities 115 124 135 107 117 100 Individual Exposure Weighting Max: 1.17% Avg: 0.87% Min: 0.22% Max: 1.37% Avg: 0.81% Min: 0.27% Max: 1.37% Avg: 0.74% Min: 0.17% Max: 1.56% Avg: 0.93% Min: 0.17% Max: 1.39% Avg: 0.85% Min: 0.16% Max: 1.41% Avg: 1.00% Min: 0.28% Portfolio weighted average rating (30 Sept 09/31 March 11) BB/BB+ BB+/BBB- BBB-/BBB- BBB-/BBB- BBB-/BBB BB+/BBB- Number of CEs to loss at average concentration (@ 20% recovery for deals 4/5/6) 15 12 14 12 9 11 Number of CEs to loss in descending order of concentration (@ 20% recovery for deals 4/5/6) 13 7 9 8 6 10 Rating 30 September 09 (external/internal) BBB-*-/BBB- A*-/BBB- AA+*-/BBB AA-*-/BBB- A*-/BBB- BBB*-/BBB- Rating 30 September 10 (external/internal) BBB-/BBB- BBB+/BBB- A-/BBB BBB-/A BB/BBB- BB+/BBB- Terminated in April 2011 Rating 31 March 11 (external/internal) BBB-/BBB BBB+/BBB- A-/A BBB-/A+ BB/BBB+ BB+/BBB- In April 2011 NAB terminated the post-risk mitigation (Leg 2) portion of Deals 1-3 Fundamental performance in the first half was generally positive. The internal ratings of deals 4 and 5 were upgraded in December 2010 66
Structured Asset Management Portfolio Summary Credit Wrapped ABS $0.6bn Portfolio 1 Portfolio 2 Current NAB Exposure $332m $234m (US$344m) (US$242m) Average Portfolio Rating (excludes Portfolio Policy, includes Bond Level Policies) B2 / B+ B3 / CCC+ Portfolio Guarantor MBIA (B3 / B) AMBAC (NR / NR) % of Underlying Asset with Wrap 48.8% 31.6% Asset Breakdown Residential Mortgage Backed Security* 34.9% 48.6% Commercial Mortgage Backed Security 0.0% 5.5% Insurance 14.4% 3.2% Student Loan 6.5% 30.0% Collateralized Debt Obligation 25.8% 0.0% Transportation & Other ABS 18.4% 12.7% * Note that this includes Subprime, Prime, Alternative A, 2 nd Lien and HELOC RMBS NAB owns a pro-rata share of two RMBS/ABS portfolios with concentrations to US residential mortgage-backed securities At issue, all bonds in the portfolios were rated AAA/Aaa by S&P and Moody s either directly or as the result of an insurance policy In addition to the bond-level policies covering a portion of each portfolio, there are portfolio-wide policies from AMBAC and MBIA that serve as insurance against loss The provision held against the portfolios increased marginally to $85m due to further weakening in US housing markets and a reduction in recovery expectations of the defaulted AMBAC policies While S&P downgraded MBIA to B from BB+ in December 2010, this rating action has no impact on the provision as an eventual default of MBIA has been anticipated in provision analysis 67 Portfolio Composition as at 31 March 2011 Total (A$bn) Total Provisions (specific & collective)* (A$m) Average Contractual Tenor (years) Leveraged Finance UK 1.1 98 3.9 Property Lending UK 1.0 133 1.3 Structured Asset Finance UK 1.7 26 14.2 Corporate & NBFI Lending UK 1.5 48 2.0 Infrastructure USA 0.4 6 8.4 PE & REIF USA 0.8 0 0.6 Corporate Lending USA 0.3 0 1.8 Corporate & NBFI Lending UK 12% Structured Asset Finance UK 13% Credit Wrapped Bonds 8% Infrastructure USA 3% PE & REIF USA 6% Total Loans & Advances 6.8 311 n/a Structured Asset Management 4.9 190 12.7 Credit Wrapped Bonds 1.0 1 5.2 Total Hold to Maturity assets 5.9 191 n/a Property Lending UK 8% Leveraged Finance UK 9% Corporate Lending USA 2% Structured Asset Management 39% Total 12.7 n/a n/a Total Provisions n/a 502 n/a 68 * Provisions for Structured Asset Management include specific and collective provisions 68 booked against Hold to Maturity assets. Not included in the above is a A$160m reserve held against conduits and MTM derivative exposures
Portfolio Composition - Credit profile 65% of commitments relate to Investment Grade equivalent clients or transactions Investment Non- Non- Non- Default or (A$bn) Grade Investment Investment Investment restructure AAA/BBB- Grade Grade Grade D BB+/BB BB-/B+ B+/CCC- Leveraged Finance UK 0.0 0.2 0.5 0.3 0.1 Property Lending UK 0.0 0.3 0.1 0.4 0.2 Structured Asset Finance UK 1.3 0.3 0.0 0.0 0.1 Corporate & NBFI Lending UK 0.6 0.5 0.1 0.2 0.1 Infrastructure USA 0.3 0.0 0.0 0.1 0.0 PE & REIF USA 0.8 0.0 0.0 0.0 0.0 Corporate Lending USA 0.2 0.0 0.1 0.0 0.0 Total Loans & Advances 3.2 1.3 0.8 1.0 0.5 Structured Asset Management 4.1 0.4 0.0 0.2 0.2 Credit Wrapped Bonds 1.0 0.0 0.0 0.0 0.0 Total Hold to Maturity assets 5.1 0.4 0.0 0.2 0.2 Total 8.3 1.7 0.8 1.2 0.7 Total RWAs 8.0 2.5 1.6 4.0 1.9 Total Provisions* 0.004 0.053 0.024 0.143 0.278 69 Number of Accounts 74 30 34 29 22 Number of Close Review Accounts 0 1 4 23 22 All data as at 31 March 2011 Investment grades equivalent of external ratings * Provisions for Structured Asset Management include specific and collective provisions booked against Hold to Maturity assets. Not included in the above is a A$160m reserve held against conduits and MTM derivative exposures Portfolio Composition - Credit quality 100% 90% 80% % of commitments 2% (11 accounts) 1% (3 accounts) 11% (51 accounts) 11% (40 accounts) 5% (24 accounts) 5% (24 accounts) 13% (51 accounts) AAA/ BBB- rating BB+/BB- rating BB-/B+ rating B+/CCC- rating D rating 5% (22 accounts) 9% (29 accounts) 7% (34 accounts) 70% 75% (121 accounts) 16% (53 accounts) 14% (30 accounts) 60% 50% 61% (101 accounts) 65% (74 accounts) 40% 30% 20% 10% 0% Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 70 Investment grades equivalent of external ratings
Portfolio Composition Contractual Maturity Profile - Actual commitments have decreased from September 2009 largely due to the weakening of both USD and GBP against the AUD as well as through repayments and decreased commitments The contractual maturity profile differs to the estimated maturity profile due to potential refinancing risks for a number of clients. The weighted average contracted maturity of the portfolio is 8.2 years SGA committed lending 5 year maturity profile Total would be A$7.5bn by Sep 2014 on a contractual basis, assuming constant FX rates 71 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 SGA Portfolio Composition by Geography of Risk RWAs UK & Europe 7.3 9.7 North America 3.5 6.1 Australia & New Zealand 1.0 1.0 Other 0.9 1.2 Total 12.7 18.0 Other 7% Australia & New Zealand 8% UK & Europe 57% by Sector of Risk RWAs Collective Provisions Specific Provisions* Financial Services 0.2 0.0 0.1 0.0 NBFI 0.7 0.7 0.4 23.4 Insurance 0.3 0.7 13.8 0.0 Commercial Real Estate Funds 0.3 0.4 0.1 0.0 Mixed Funds 0.5 0.5 0.3 0.0 Industrial 0.4 0.7 20.8 0.0 Infrastructure 0.5 0.4 3.4 1.1 Retail 0.3 0.9 7.7 0.0 Utilities 0.9 0.8 0.6 0.0 Resources 0.8 0.6 8.0 0.0 Transport 1.0 1.2 36.1 14.4 Property 1.1 1.8 53.6 87.3 TMT 0.3 0.9 7.2 20.6 ABS & CDOs 4.9 7.6 86.6 102.9 Other 0.5 0.8 13.2 0.2 Total 12.7 18.0 251.9 249.9 ABS & CDOs 39% North America 28% Other 4% TMT 2% Property 9% Financial Services 2% NBFI 6% Insurance 2% Commercial Real Estate Funds 2% Mixed Funds 4% Industrial 3% Infrastructure 4% Retail 2% Utilities 7% Resources 6% Transport 8% 72 * Provisions for ABS & CDOs is on Hold to Maturity assets. All other specific provisions are on loans and advances
Leveraged Finance UK Portfolio Description: The UK leveraged finance book was mostly originated between 2005-7 to finance syndicated Leveraged Buy-Outs (LBOs). No. of Clients 35 Drawn Balance $1.1bn $1.1bn Credit RWA $2.7bn No. of Close Review Clients 14 Close Review $363m Avg* contractual maturity *weighted average by commitment 3.9 yrs Sector Analysis Collective Provisioning Specific Provisioning Retail 0.1 6.3 - Industrial 0.3 14.5 - Property 0.1 8.2 - Resources 0.1 7.2 - TMT 0.2 5.5 20.6 Transport 0.2 10.0 14.4 Other 0.1 11.2 0.1 Total 1.1 62.9 35.1 Resources 9% Property 9% Industrial 28% TMT 18% Transport 18% Other 9% Retail 9% 73 Property UK Portfolio Description: Syndicate and bilateral loans made to national and regional house builders, institutional clients and developers on a secured or unsecured basis. All assets are located within the UK. No. of Clients 19 Drawn Balance $1.0bn $0.9bn Credit RWA $1.7bn No. of Close Review Clients 14 Close Review $661m Avg* contractual maturity *weighted average by commitment 1.4yrs Sector Analysis Collective Provisioning Specific Provisioning House builder 0.4 25.0 54.3 Hotel Investment/ Development 0.1 1.1 9.9 Commercial Property Investment/ Development 0.1 5.4 18.4 Medical Property Investment 0.2 0.3 - Other 0.2 13.6 4.7 Total 1.0 45.4 87.3 Medical Property Investment 20% Other 20% Commercial Property Investment / Development 10% House builder 40% Hotel Investment / Development 10% 74
Structured Asset Finance Portfolio Description: Structured finance and operating leases involving mobile infrastructure assets (i.e. ships, trains, helicopters, etc.) or loans to such structures. No. of Clients 20 Drawn Balance $1.7bn $1.7bn Credit RWA $1.2bn No. of Close Review Clients 1 Close Review $49m Avg* contractual maturity *weighted average by commitment 14.2 yrs Sector Analysis Collective Provisioning Specific Provisioning Resources 47% Resources 0.8 0.8 - Other 6% Financial Services 0.2 0.1 - Transport 0.6 25.2 - Infrastructure 0.1 0.2 - Transport 35% Total 1.7 26.3 - Financial Services 12% 75 UK Corporate & NBFI Lending Portfolio Description: Corporate loans and funding facilities for non-bank financial institutions. Largely based in the UK, across a broad mix of industries. No. of Clients 30 Drawn Balance $1.5bn $1.3bn Credit RWA $2.4bn No. of Close Review Clients 10 Close Review $607m Avg* contractual maturity *weighted average by commitment 2.0 yrs Sector Analysis Collective Provisioning Specific Provisioning Transport 13% Retail 7% Industrial 7% Retail 0.1 1.4 - TMT 7% Industrial 0.1 6.3 - TMT 0.1 1.6 - Insurance 0.3 13.8 - NBFI 0.7 0.4 23.4 Transport 0.2 0.7 - Total 1.5 24.2 23.4 NBFI 46% Insurance 20% 76
Infrastructure USA Portfolio Description: Portfolio consists primarily of essential infrastructure assets across both the USA and Canada, in both operating and construction phases. No. of Clients: 10 Drawn Balance $0.4bn $0.3bn Credit RWA $0.5bn No. of Close Review Clients: 4 Close Review $74m Avg* contractual maturity *weighted average by commitment 8.4 yrs Sector Analysis Collective Provisioning Specific Provisioning Other 25% Infrastructure 0.3 3.4 1.1 Transport 0.1 1.6 - Total 0.4 5.0 1.1 Infrastructure 75% 77 Private Equity & Real Estate Investment Funds Portfolio Description: Bridging loans and markets facilities to pooled investment funds used for making debt and equity investments primarily in global real estate assets. No. of Clients 22 Drawn Balance $0.8bn $0.6bn Credit RWA $0.9bn No. of Close Review Clients 1 Close Review $0m Avg* contractual maturity *weighted average by commitment 0.6 yrs Sector Analysis Collective Provisioning Specific Provisioning Commercial Real Estate Funds 37% Commercial Real Estate Funds 0.3 0.1 - Mixed Funds 0.5 0.3 - Total 0.8 0.4 - Mixed Funds 63% 78
Corporate Lending USA Portfolio Description: Senior secured and unsecured credit facilities across various sectors within the US including Industrial, Infrastructure (Public Finance) and Property. No. of Clients 11 Drawn Balance $0.3bn $0.02bn Credit RWA $0.1bn No. of Close Review Clients 1 Close Review $13m Avg* contractual maturity *weighted average by commitment 1.8 yrs Sector Analysis Collective Provisioning Specific Provisioning Other 33% Infrastructure 0.2 - - Other 0.1 0.3 - Total 0.3 0.3 - Infrastructure 67% 79 Credit Wrapped Bonds Portfolio Description: Transactions where corporate bond issuers add a monoline insurance company guarantee as credit enhancement to achieve a higher external rating and better market pricing. The insurance is not factored into the internal credit rating. No. of Clients 4 Drawn Balance $1.0bn $0.9bn Credit RWA $0.9bn No. of Close Review Clients - Close Review - Avg* contractual maturity *weighted average by commitment 5.2 yrs Sector Analysis Collective Provisioning Specific Provisioning Transport 10% Transport 0.1 0.2 - Utilities 0.9 0.6 - Total 1.0 0.8 - Utilities 90% 80
Structured Asset Management Portfolio Description: CDOs, residential mortgage backed securities ( RMBS ), commercial mortgage backed securities ( CMBS ) and other asset backed securities. ABS CDOs were mostly written off in 2008. No. of Transactions 31 Drawn Balance $4.9bn $4.9bn Credit RWA $7.6bn No. of Close Review Clients 3 Close Review $450m Avg* contractual maturity *weighted average by commitment 12.7 yrs Sector Analysis Collective Provisioning* Specific Provisioning # SCDO 1.5 - - ABS CDO 4% ABS CDO 0.2-103.0 CLO 1.8 - - Other 0.1 - - SCDO 29% CLO 36% CMBS 0.6 - - RMBS 0.5 - - CMBS / CRE CDO 0.1 - - Student Loan ABS 0.1 - - Total 4.9 86.6* 103.0 # Student Loan ABS 2% CRE/CMBS CDO 2% RMBS 10% CMBS 13% Other 4% * Collective provision is applied to the entire portfolio (primarily to credit wrapped ABS) and is not assigned to individual sectors In addition to the provision is a further $160m management overlay for conduits and MTM derivative exposures # Provisions on this portfolio are booked against hold to maturity assets 81 Additional Information Business Banking Personal Banking Wholesale Banking MLC & NAB Wealth NZ Banking UK Banking Great Western Bank Specialised Group Assets Asset Quality Capital and Funding Economic Outlook