According to the NAB Q1 2026 Pillar 3 Report, the National Australia Bank has taken steps to indicate varying regulation trends that have shown a strong capital resilience but an increase in risk-weighted assets.
CET1 capital dropped by 254m or 0.5%. The fall was after a 2.6 billion final dividend and a reduction of 253 million of the foreign currency reserve. These effects are partially compensated by the quarterly net profit of $2.2 billion.
Tier 1 capital decreased as well by 254 million or 0.4%. There was a growth of total capital by 0.2 of 184 million dollars. The lift was backed by Tier 2 issues amounting to 1.9 billion.
The increase was tamed by the maturity amounting to one point two billion dollars. These modifications underscore capital relative movements in growing exposures.
NAB head office and financial district images are in line with the quarterly update of the capital. [Bloomberg]
Risk-Weighted Assets Continue To Climb
The total RWA increased by 1.4 per cent or 6.0 billion to 446,519. There was a 0.9 per cent or 3.2 billion credit RWA increase with no counterparty risk. The change was triggered by lending growth, primarily in the areas of corporate and residential mortgages.
Operational risk RWA increased by 2.9 or 1.1billion. The floor adjustment brought up $3.0 billion following better standardised results. Some offsets emerged. There was a decrease in counterparty credit risk and valuation adjustment of -1.5 billion.
The banking book interest rate risk declined by 6.5 per cent or 903 million. There was a pre-floor RWA of 441,196 and a capital floor adjustment of 5,323. Such figures show an increase in the balance sheet activity in spite of risk controls.
How Did Capital Ratios And Leverage Perform?
The level of the CET1 ratio has reduced to 11.48 per cent as opposed to 11.70 per cent. Tier 1 ratio moved to 13.50% from 13.74%. The total capital ratio was reduced to 20.09 per cent.
Low buffers do not result in low levels that are below minimum requirements. Its leverage ratio declined by 6 basis points to 4.86. The total exposures widened by 12.0 billion or 1.0 per cent. Securities financing transactions contributed to 5.4 billion.
Exposures on-balances sheet grew by 4.4 billion. The off-balance sheet exposures increased by $3.3 billion. Tier 1 capital decreased slightly, and the leverage change was caused by this.
CET1, Tier 1, and total capital ratios declined this quarter. [Smaco]
Liquidity Buffers Strengthen Across Funding Metrics
The liquidity continued to be strong during the quarter. The average LCR rose to 136% from 135%. Liquid assets of high quality improved by 1.3 or 2.8 billion. The net cash outflows increased by 0.5 per cent or 794 million.
The asset build was supported by increased wholesale funding. The net stable funding ratio went up to 117 compared to 116. Stable funding rose by 0.8 per cent or 5.8 billion.
The necessary stable funding increased by just 0.1 or 536 million. The major drivers were retail and Small business deposits. These measures validate comfortable liquidity both in the short run and in the long run.
Where Did Credit Risk And Exposure Shift?
The total credit exposure at default consisted of 1,157,530 that is credit and counterparty risk. Total credit RWA reached 377,355. The A-IRB approach had EaD of 442209 in residential mortgages.
There were corporate exposures of 239,222. Non-performing exposures declined by 3.5 or 424million dollars. The downturn saw an improvement in business loans and mortgages. The total credit impairment provisions amounted to 6,120.
The provisions in Stage 3 contributed to 2,297. Exposure provisions performed added 3,823. Such changes imply the stabilisation of the quality of assets within portfolios.
The majority of the growth in exposure in the quarter was occasioned in the mortgage and corporate lending segments. [BFSI]
What Does This Mean For Investors And Markets?
The NAB Regulatory Capital Update is an indication of consistent buffers with gradual depreciations. Capital is high and above the regulatory provisions.
Increasing lending amounts favour earning power. Nevertheless, the increase in RWA and reduced ratios should be monitored.
Liquidity and funding ratios are comforting. This mix implies equal growth and not pressure. The quarter can be perceived by investors as a stable and moderate accumulation of risk.
The future performance will be based on the quality of credit and the cost of funding. In general, NAB Capital Strength Q1 2026 conveys strength in regulated expansion.
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FAQs
Q1: What was NAB’s CET1 ratio in Q1 2026?
A1: It declined to 11.48% from 11.70% last quarter.
Q2: How much did total RWA increase?
A2: Total RWA rose by $6.0 billion to 446,519.
Q3: What was the leverage ratio?
A3: The leverage ratio decreased to 4.86%.
Q4: Did liquidity improve?
A4: Yes, LCR increased to 136%, and NSFR rose to 117%.
