National Australia Bank (NAB) has released its third quarter FY25 trading update, reporting a 2% lift in underlying profit.
Business and private banking lending grew 4% over the quarter, with June delivering a record monthly increase of $4.6 billion. Australian home lending rose 2%, in line with system growth, supported by stronger proprietary channel drawdowns.
NAB flagged higher expenses due to a payroll remediation program, with FY25 operating expense growth now expected at around 4.5%, including $130 million in payroll review and remediation costs.
“This is disappointing and must be fixed,” Irvine said.
The payroll review, ongoing since 2019, has already cost $250 million between FY20 and FY22.
“Paying our colleagues correctly is an absolute priority. We are sorry and apologise to our colleagues that this has happened and have commenced remediating those impacted,” said Sarah White (pictured right), NAB Group executive people and culture.
A dedicated team is addressing the issues, with engagement from the Fair Work Ombudsman and Finance Sector Union.
NAB said balance sheet settings “remained prudent” with a continued focus on safety and sustainability.
It also confirmed AUSTRAC had cancelled its Enforceable Undertaking after NAB strengthened its compliance with anti-money laundering and counter-terrorism financing laws.
Despite expense pressures, Irvine said NAB remains confident about long-term growth.
“We remain optimistic about the outlook and are well placed to manage NAB for the long term and deliver sustainable growth and returns for shareholders,” he said.
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