National Australia Bank (NAUBF,NABZY,NAB.AX) expects credit impairment charges of A$706 million for the first-half of 2026, following adjustments to credit provisioning and capital settings in response to risks stemming from the conflict in the Middle East.

Of this total, A$300 million relates to movements in forward-looking collective provisions. These include a A$152 million increase in the Economic Adjustment due to updates in the Base economic forecast and a higher weighting (45%) to the Australian Downside scenario, a A$201 million increase in Forward Looking Adjustments (FLAs) for sectors potentially impacted by fuel supply and cost issues, and a A$53 million release of FLAs where risks have not materialized or are now captured in underlying provisioning.

Underlying provision charges are expected to be A$406 million, comprising A$541 million in Individual Assessed provision charges, partially offset by a A$135 million write-back in underlying Collective provisions.

NAB also reaffirmed its guidance for fiscal year 2026 cash operating expense growth to remain below 4.6%. This guidance excludes Large Notable Items but incorporates the impact of changes in software capitalization policy on the second-half of 2026 operating expenses.

NAB.AX was trading at A$41.22 down A$1.33 or 3.13%.

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