Published: 10 December 2025 – Information only, not financial advice.
NAB share price today: steady around A$41 after rate shock
National Australia Bank Limited (ASX:NAB) is trading near the middle of its 52‑week range as investors digest a hawkish pivot from the Reserve Bank of Australia (RBA) and a solid but unspectacular FY25 result.
NAB closed at A$41.01 on 9 December 2025, up slightly from A$40.60 the previous session, with intraday trading between A$40.54 and A$41.17. Over 2025, the stock has traded between roughly A$31.13 and A$45.25, finishing the year so far around 10–11% above where it started.
The RBA’s decision this week to hold the cash rate at 3.6% while explicitly warning that rate hikes in 2026 are now on the table initially dragged the ASX 200 lower. Yet NAB bucked the broader weakness on 9 December, rising about 1.0% on the day as investors reassessed higher‑for‑longer interest rates and their implications for bank margins.
At current levels, NAB’s market capitalisation is in the A$125 billion range, with the stock trading on roughly 18–19x trailing earnings, about 17x forward earnings, and close to 2.0x price‑to‑book, putting it on a premium multiple to many Australian and global bank peers.
FY25 results: flat profit, strong business lending, higher costs
NAB’s full‑year FY25 results, released on 6 November 2025, set the tone for today’s debate around the stock.
Key headline numbers:
- Cash profit: A$7.09 billion for the year to 30 September 2025, essentially flat on FY24’s A$7.10 billion and slightly below consensus expectations (~A$7.17 billion).
- Net interest margin (NIM): Up around 3 basis points to 1.74% at group level, though excluding treasury/markets effects the underlying margin fell by about 1 basis point as deposit and wholesale funding costs rose.
- Credit impairment charge: Up 14.4%, driven mainly by higher individually assessed charges in business lending, consistent with a “normalising” credit cycle rather than a crisis.Reuters+1
- Operating expenses: Up 4.6% to A$9.85 billion, reflecting wage inflation, heavier technology spending and about A$130 million in payroll remediation charges.
Business and Private Banking remains the engine room. Cash earnings in that division rose 1.6% to A$3.33 billion, with Australian business lending balances up around 9% and deposits up about 7% over the year, consolidating NAB’s position as the country’s leading business bank.
Independent commentary from Morningstar describes FY25 as “standing ground” in business lending but “no earnings growth,” noting that loan growth accelerated to an annualised 6.5% in the second half while half‑on‑half NIM expanded 8 basis points to 1.78%.Morningstar
The overall message: fundamentals are resilient, but growth is modest and costs are sticky.
Dividends: 4%+ franked yield remains NAB’s calling card
For many investors, NAB is primarily about dividend income rather than explosive capital gains.
Key details for FY25 and the current payout:
- Total FY25 ordinary dividend:A$1.70 per share, paid as two fully franked A$0.85 instalments, slightly higher than FY24’s A$1.69.
- Final FY25 dividend: Ex‑dividend on 11 November 2025, payable on 12 December 2025 – the same day as NAB’s 2025 AGM in Melbourne.
- Trailing yield: Around 4.0–4.2% at share prices near A$40–41, before the benefit of franking credits.
- Payout ratio: Roughly 70–76% of cash earnings, which Morningstar expects to average about 70% over the next five years.
NAB has also been returning capital through buybacks. The bank completed a A$3.0 billion on‑market buyback in March 2025 and finalised the sale of its remaining 20% stake in MLC Life in October 2025, leaving the Common Equity Tier 1 (CET1) ratio around 11.7–11.8%, comfortably above regulatory “unquestionably strong” benchmarks.TechStock²+1
For income‑focused portfolios, a fully franked 4%+ yield from a systemically important, well‑capitalised bank is still a substantial attraction – but only if investors are comfortable with limited growth and valuation risk.
Jobs, costs and the digital pivot
Behind the numbers, NAB is reshaping its cost base and technology footprint.
In September 2025, the bank announced it would cut about 410 jobs, predominantly in technology and enterprise operations, while creating more than 120 roles in India and Vietnam. The Finance Sector Union estimates more than 700 workers are affected, and has criticised the shift of work offshore.
Management argues that a global workforce will:
- extend operating hours,
- speed up processes, and
- help contain labour costs in a tight domestic market.
At the same time, NAB is lifting annual investment in digital platforms and artificial intelligence to around A$1.8 billion, according to fund manager commentary. This includes tools for business bankers, upgrades to home‑lending systems, and broader data and risk‑management infrastructure.
The trade‑off is clear: higher near‑term expenses and complex workforce changes in exchange for hoped‑for long‑term efficiency gains and improved customer experience.
Macro backdrop: RBA turns hawkish, NAB’s own survey flashes inflation risk
Two macro developments are especially important for NAB’s outlook as of 10 December 2025:
1. RBA ends its brief cutting cycle and hints at hikes
This week the RBA:
- Held the cash rate at 3.6% at its final meeting of 2025.
- Signalled that future hikes are now a real possibility if inflation stays elevated.
Headline inflation has risen for four consecutive months to 3.8% year‑on‑year in October, with core measures around 3.3%, above the 2–3% target band.Reuters Analysts now see February 2026 as a “live” meeting for a rate increase, with NAB’s own economists highlighting that the Board spent more time discussing what might trigger a rise than any further cuts.Yourmortgage.com.au+1
Higher‑for‑longer rates are a double‑edged sword for banks: they support margins but pressure borrowers and credit quality.
2. NAB Business Survey: capacity constrained, inflation risk alive
NAB’s November Business Survey shows conditions easing but still solid:
- Business conditions index: +7, down from +9 in October.
- Business confidence: down from +6 to +1.
- Capacity utilisation: up to 83.6%, the highest in 18 months.
NAB Chief Economist Sally Auld warns that firms remain capacity‑constrained and that any pick‑up in growth could quickly feed into higher prices, reinforcing the RBA’s hawkish tone.
For NAB, this macro mix suggests:
- Margins may hold up better than feared if rates stay higher for longer.
- But impairments could keep drifting up if households and businesses struggle with persistent inflation and elevated borrowing costs.
How expensive is NAB? What analysts and models say
Despite the recent pull‑back from October highs, many equity analysts now see limited upside — and in some cases downside — from current share price levels.
Broker and research house views
- Morningstar
- Lifts its fair value estimate to A$33, up 3%.
- Sees NAB shares as “materially overvalued” at around 18x forward earnings and a ~4% dividend yield, given expectations of about 5% annual EPS growth to 2030.Morningstar
- Investing.com consensus (ASX:NAB)
- Average 12‑month target: about A$38.0.
- High target: ~A$46.3; low target: ~A$29.0.
- Consensus rating:“Sell”, with 2 Buy, 5 Hold and 7 Sell calls among 14 analysts.Investing.com
- TipRanks (AU:NAB)
- Average target: about A$39.5, based on 9 analysts in the past three months.
- Implies ~3% downside from a current price around A$40.86, with a range of roughly A$31.80 to A$46.01.
- Goldman Sachs initiated coverage in October 2025 with a Sell rating and A$38 price target, citing valuation concerns.
- Morgans has a Sell on NAB with a target around A$31.46, preferring other Australian bank exposures at current prices.
On the more constructive side:
- A recent TIKR review concludes that NAB is “fairly valued” on its internal model, with a mid‑case projection of about 21.5% total return over 4.4 years – roughly 4.4% annualised, driven mainly by steady margins, modest revenue growth (~2.6% CAGR) and a robust 29% net income margin.TIKR.com
- Fund manager Montgomery Investment Management (via TechStock²) has argued for a more optimistic long‑term case, reportedly seeing potential for NAB shares to trade in the mid‑A$50s over the next 2–3 years if business banking and direct mortgage strategies continue to deliver.
In short, short‑term consensus leans cautious, but a minority of long‑horizon investors remain constructively bullish.
Technical picture and trading signals
Short‑term trading indicators echo the “not cheap, not broken” narrative:
- Technical analysis from StockInvest classifies NAB as a “hold candidate” as of 9 December 2025.
- The stock has risen in 6 of the last 10 sessions and is up ~0.9% over two weeks, with increasing volume on recent gains – a mildly positive sign.
- The 52‑week high of A$45.25 and low of A$31.13 leave the current price near the middle‑to‑upper part of the range.
Several platforms flag soft momentum after the pull‑back from October’s highs: prices sit below some short‑ and medium‑term moving averages but above the 200‑day trendline, consistent with a mature uptrend taking a breather rather than an outright breakdown.
For traders, that translates to range‑bound risk: plenty of room for swings in either direction around the A$40 mark, especially as rate expectations and macro data shift.
Key risks and upside drivers going into 2026
Looking beyond today’s price, several themes will likely drive NAB’s share performance over the next 12–18 months:
- Interest‑rate path and margins
- A rate hike in 2026 would probably support margins but further test borrowers.
- A surprise return to cuts would relieve borrowers but could compress NIM and weigh on earnings.
- Credit quality and impairments
- Impairments are rising from very low levels but remain manageable.
- A sharper‑than‑expected slowdown, especially in small‑business and unsecured lending, could push provisions higher and eat into profit.
- Housing market and competition
- NAB’s CEO has repeatedly described housing as Australia’s “biggest societal and policy challenge”, highlighting supply constraints and fast‑rising prices.Reuters
- Intense competition in home lending – including moves by major banks to bypass mortgage brokers – continues to pressure margins and acquisition costs.
- Regulation, conduct and technology costs
- NAB has paid penalties over Consumer Data Right breaches and remains under pressure to lift compliance and cyber‑security spending.
- Ongoing investment in digital and AI capabilities is essential for long‑term competitiveness, but it keeps operating expenses elevated in the short run.
- Valuation risk
- With the stock trading above many fair‑value estimates and near the upper end of historical multiples, any disappointment on earnings, margins, or credit quality could trigger sharper downside than for cheaper peers.
Bottom line: NAB looks like a premium income stock, not a bargain
As of 10 December 2025, National Australia Bank sits at the intersection of:
- Solid fundamentals: strong business‑banking franchise, healthy capital ratios, robust deposit base.
- Attractive income: fully franked dividend yield around 4%+, with a long history of payouts.
- Macro uncertainty: a central bank that is suddenly more worried about inflation than growth, and a domestic economy running close to capacity.
- Stretched valuation: a premium P/E and P/B multiple, with many analysts seeing limited upside or mild downside over the next year.
For investors, the current setup frames NAB as a relatively defensive, income‑oriented bank position rather than an obvious value opportunity. The core debate is whether a high‑quality business with stable earnings and strong capital is worth paying a premium for when the rate cycle, credit quality and competition could still surprise.
