NAB flags $504m in H1 impairment charges as Middle East conflict bites

It will apply a 1.5% discount to its dividend reinvestment plan to strengthen its capital position.

National Australia Bank will report impairment charges of about $504m (A$706m) in the H1 2026 period, of which $214.5m (A$300m) are related to market volatility arising from the Middle East conflict.

The Australian bank is increasing its economic adjustment by A$152m, citing economic forecasts and a 2.5% increase in the weighting of an Australian downside economic scenario.

It also raised its forward-looking adjustments (FLAs) to A$201m as it braces for the impact of fuel supply and cost issues on certain sectors.

NAB said that its common equity tier 1 (CET 1) ratio has been reduced by approximately 20 basis points (bps) as of 31 March 2026 due to interest rate volatility, weakening of the New Zealand Dollar (NZD) in Q2, and a $300m increase in provisions.

Its credit risk-weighted assets (RWA) were impacted by a A$4.2b overlay applied to NAB’s internally rated credit models.

To strengthen its capital position and balance sheet, NAB said that it expects to apply a 1.5% discount to the H1 2026 dividend reinvestment plan (DRP) and partially underwrite the DRP. It expects to raise $1.8b from these actions and contribute to about 40bps of its CET1 ratio in H2 2026.

(US$1 = A$1.40)