Sydney, 11 December 2025 — National Australia Bank Limited (ASX:NAB) is trading near the upper end of its recent range as investors weigh a fully franked dividend, flat but solid FY25 earnings, shifting interest-rate expectations and a mixed set of valuation calls from analysts and models.
As of mid‑afternoon on 11 December 2025, NAB shares were changing hands at about A$41.28, up modestly on the previous close of A$40.96. That puts the stock towards the higher half of its 52‑week range of A$31.13 to A$45.25, with a market capitalisation of roughly A$126.5 billion, a trailing P/E ratio near 18.7 and a headline dividend yield around 4.1%. Google+1
Year to date, the bank’s share price is up about 15%, comfortably ahead of inflation and broadly in line with the wider Australian banking sector. TipRanks
NAB share price today: premium valuation for a “Big Four” franchise
At around A$41 per share, NAB is priced as one of the heavyweight constituents of the S&P/ASX 50, with a price‑to‑book ratio close to 2.0x, reflecting the market’s willingness to pay a premium over the bank’s accounting equity. Google+1
Compared with peers, NAB’s valuation sits in the middle of the Big Four pack. Commonwealth Bank of Australia continues to command a higher earnings multiple, while Westpac and ANZ typically trade on slightly lower P/E ratios, reflecting different mixes of retail, business and institutional banking risk. Google+1
Daily trading liquidity remains deep, with an average of about 4.4 million NAB shares changing hands over the past month, underlining the stock’s role as a core holding for many institutional and income‑focused investors. Google
Dividend snapshot: final FY25 payout lands this week
NAB’s role as an income stock is front and centre this week. The bank declared a fully franked final FY25 dividend of A$0.85 per share, taking total dividends for the financial year to A$1.70, one cent higher than FY24. Investor Daily+1
Key dividend details for FY25 include:
- Interim dividend: A$0.85 per share, paid in July 2025
- Final dividend: A$0.85 per share, ex‑dividend on 11 November 2025 and scheduled for payment on 12 December 2025 Investing.com+1
- Headline yield: About 4.1–4.2% based on the current share price and A$1.70 in annual dividends, before the value of franking credits. Google+1
On a cash‑earnings basis, NAB’s payout ratio is running around 70–73%, a level management and external analysts expect to be broadly maintained over the next few years. Morningstar+1
That mix — mid‑single‑digit earnings growth expectations combined with a 4%+ fully franked yield — is a big part of why the stock features so heavily in income portfolios and why recent commentary from income‑focused outlets, including a 11 December Rask Media piece valuing the NAB share price through its dividend yield lens, has concentrated on sustainability and valuation of that payout stream. Rask Media+1
FY25 results: underlying profit up, cash earnings flat
NAB’s 2025 financial year (to 30 September) was steady rather than spectacular.
Across the year, the bank reported:
- Revenue up about 1.2% to A$20.9 billion TipRanks
- Cash earnings broadly flat at around A$7.1 billion, a small decline of about 0.2–3% depending on the measure used Morningstar+2Morningstar+2
- Underlying profit up roughly 1–1.3% to A$10.9 billion NAB+2Investor Daily+2
- Net profit after tax down around 2.9% to A$6.76 billion, reflecting higher costs and impairments. TipRanks
Management and several research houses emphasised the momentum in the second half of FY25, with:
- Business loan growth accelerating to an annualised ~6.5% in the second half
- Net interest margin (NIM) expanding by roughly 8 basis points versus the first half to 1.78%, as the bank adjusted loan pricing and deposit rates after earlier rate cuts. Morningstar
However, that top‑line momentum was offset by:
- Higher loan impairment charges as credit conditions normalised from very benign levels
- Operating expenses rising about 4–5%, driven by wage inflation, technology investment and financial‑crime compliance spending. Morningstar+2TipRanks+2
In an official summary, NAB highlighted that FY25 delivered a 1% lift in underlying profit with cash earnings “broadly stable”, describing the result as evidence of “good momentum” in the first year of its refreshed strategy. NAB+2ASX Announcements+2
Strategy and structural themes: business lending, housing and efficiency
Business lending engine still central
NAB remains Australia’s largest business bank. In FY25:
- Australian business lending balances rose about 9–9.1%
- Total customer deposits increased roughly 7.4%. NAB News+1
The bank modestly increased its market‑leading share in business lending to around 22%, helped by continued investment in specialist bankers across sectors like agriculture, health, education and franchising. Morningstar
Analysts at Morningstar describe NAB as a “wide‑moat” franchise whose scale, pricing power and business‑bank focus should allow it to sustain returns on equity around 11–12% over the cycle. Morningstar+1
A A$60 billion housing ambition
Housing is both a growth engine and a key risk. NAB has committed to providing at least A$60 billion in lending over the next five years to help tackle Australia’s housing shortfall, building on A$6.9 billion in financing it has already provided over the three years to FY25 for affordable and social housing projects. NAB+1
CEO Andrew Irvine has repeatedly warned that housing is “Australia’s greatest societal challenge”, pointing to rapidly rising prices, limited new supply and planning bottlenecks. Reuters That stance positions NAB both as part of the solution — via project and construction lending — and as a bank that remains highly exposed to housing‑related credit and policy risk.
Cost control, job cuts and offshoring
In September, NAB confirmed it would cut 410 technology and enterprise operations roles in Australia, while creating 127 new positions in India and Vietnam as part of a restructuring of its technology and operations footprint. Reuters
Management frames the move as a skills‑mix and efficiency play to support ongoing digital investment. Unions have criticised the cuts as destructive to the local workforce, underscoring the social and reputational balancing act large banks must manage when pursuing cost savings at scale. Reuters
Leadership: new CFO incoming
The bank is also mid‑transition in its finance leadership. In August, NAB appointed Inder Singh, currently CFO of QBE Insurance, as its next Group Chief Financial Officer and Group Executive, Strategy, effective March 2026, subject to regulatory approval. Reuters+2NAB News+2
Singh brings more than two decades of experience across insurance and investment banking (including stints at Deutsche Bank and UBS) and is expected to have a central role in capital allocation and strategic transformation. Acting CFO Shaun Dooley will return to his Group Chief Risk Officer role once the transition is complete. Reuters+1
Macro backdrop: RBA on pause, 2026 tightening risk and business conditions
NAB’s earnings outlook is tightly tied to the Reserve Bank of Australia (RBA) and the broader economy.
Rates and inflation
At its final meeting of 2025, the RBA kept the cash rate at 3.6% but emphasised that persistent inflation could still force rate hikes rather than cuts in 2026. Headline inflation is running around 3.8%, above the 2–3% target band, with core inflation also elevated. Reuters
Markets have moved to price a meaningful chance of one or more rate increases next year, rather than the easing cycle many had anticipated earlier in 2025. Higher‑for‑longer rates tend to support banks’ margins in the short term, but also raise medium‑term risks around credit quality and housing stress.
NAB’s own markets team has highlighted this tension, noting in recent commentary that global and domestic rate moves are now finely balanced between inflation control and growth risks. FNArena.com+1
Labour market and capacity
Fresh November labour data released today showed a surprise net loss of about 23,100 jobs, the largest drop in nine months, even as the unemployment rate held steady at 4.3% thanks to a slight dip in participation. Reuters
From NAB’s vantage point, strategist Rodrigo Catril has argued that the economy is still operating close to capacity: credit growth is strong, house prices are at record highs and consumer spending remains resilient, aided by higher incomes and wealth effects. The Edge Malaysia
Business conditions survey
NAB’s own monthly business survey for November showed:
- The Business Conditions Index easing 3 points to +7, still comfortably in expansion territory
- Business confidence sliding to +1, reflecting softer sentiment but not outright pessimism. Reuters+1
For NAB, this backdrop — solid but slowing activity, lingering inflation and a labour market that is softening at the edges — suggests:
- Potential support for margins if rates drift higher,
- But rising risk that loan impairments will normalise upwards from the very low levels of recent years.
CEO’s 2026 outlook: cautiously optimistic
In a year‑end letter to customers published this week, CEO Andrew Irvine struck a cautiously upbeat tone on the year ahead. He noted that household pressures from rates and cost of living have begun to ease, consumer spending is showing signs of improvement, and business confidence and investment remain resilient, albeit with more caution. MarketScreener
Irvine portrayed 2026 as a year of “new possibilities”, emphasising that NAB wants to “back” businesses delivering innovative housing and property solutions and urged any customers facing hardship to contact the bank early for tailored support through its hardship and “We Care” programs. MarketScreener
Taken together with the bank’s A$60 billion housing commitment and business‑lending focus, the message is clear: NAB intends to lean into growth opportunities, but against a backdrop of heightened sensitivity to customer stress and regulatory scrutiny.
How analysts and models currently see NAB stock
Views on NAB’s valuation are far from unanimous.
Morningstar: quality franchise, but “materially overvalued”
Morningstar’s equity research team:
- Rates NAB as a “wide‑moat” bank with a strong competitive position in business lending
- Estimates a fair value of about A$33 per share
- Sees shares as “materially overvalued” at current levels around A$41–A$42, implying a premium of 20–25% over their intrinsic value estimate. Morningstar+1
Their base case assumes:
- Average loan growth of roughly 4.5% per year through FY2030
- Around 5% annual EPS growth over the same period
- A sustainable ROE of about 11.4%. Morningstar+1
On this view, investors are paying up for stability, oligopoly power and dividend reliability — perhaps too much.
Broker and consensus signals
TipRanks, which aggregates broker views, notes that:
- The most recent analyst rating on NAB is a “Hold”
- With a 12‑month price target around A$40, slightly below the current price
- The shares are up about 15% year‑to‑date with a technical sentiment signal flagged as “Buy”. TipRanks
Separately, narrative‑driven valuation tools tracked by Yahoo Finance suggest NAB may be trading roughly 20% above a popular model’s estimate of fair value, reinforcing the picture of a stock on a valuation premium. Yahoo Finance+1
A recent income‑focused piece from The Motley Fool Australia highlighted how broker price targets cluster in a wide band: the most optimistic target sits just over 10% above the current share price, while the most cautious is more than 20% below, implying that a sharp de‑rating could more than wipe out a year’s worth of dividends. The Motley Fool Australia
AI‑based forecasts: modest short‑term, bullish long‑term
AI‑driven forecasting platform Meyka currently shows NAB at A$40.96 and projects: Meyka
- 1‑month forecast: A$40.48 (‑1.2%)
- 12‑month forecast (2026): A$42.28 (+3.2%)
- 3‑year forecast: A$53.22 (~+30%)
- 5‑year forecast: A$64.18 (~+57%)
- 7‑year forecast: A$80.47 (~+96%)
Meyka’s models describe the short‑term outlook as bearish but the long‑term trend as bullish, essentially predicting sideways trading with a slow upward drift over several years. The platform stresses these are not investment recommendations but directional, model‑based scenarios. Meyka
NAB as an income stock in December 2025: key considerations
For income‑oriented investors looking at NAB today, a few themes dominate the discussion.
The positives
- Attractive, fully franked yield: Around 4.1% cash yield (higher on a grossed‑up basis), with a track record of steadily rising or at least stable dividends and a payout ratio that still leaves room for reinvestment. Google+2Investing.com+2
- Scale and oligopoly position: One of Australia’s “Big Four” banks with leading share in business lending, strong deposit franchise and an AA‑ credit rating. NAB News+2Wikipedia+2
- Capital strength: A solid Common Equity Tier 1 (CET1) ratio (noted in the FY25 results summary) and strong provisioning levels provide buffers against a moderate deterioration in asset quality. NAB+1
- Strategic focus: A renewed emphasis on business banking, digital capability and housing solutions, now backed by a clearly articulated A$60 billion lending ambition. NAB+2NAB News+2
The risks
- Valuation premium: Multiple valuation frameworks — from Morningstar’s DCF to narrative models — argue that the stock trades at a noticeable premium to intrinsic value estimates, leaving limited margin of safety if earnings disappoint or rates move against the banks. Morningstar+2Yahoo Finance+2
- Interest‑rate and housing sensitivity: Higher‑for‑longer rates could boost margins, but also increase arrears and impairments, especially given NAB’s exposure to mortgages and construction finance amid a strained housing market. Reuters+2Reuters+2
- Cost and execution pressure: Ongoing technology investment, restructuring costs, job cuts and offshoring all carry execution risk and potential reputational cost if not handled carefully. Reuters+2Morningstar+2
- Regulatory and conduct risk: Australian banks continue to operate under intense regulatory and public scrutiny following earlier misconduct inquiries, and NAB is no exception. Any mis‑steps in remediation, product design or lending standards could trigger fines, capital surcharges or brand damage.
Upcoming catalysts for NAB shareholders
A few near‑ and medium‑term events could shift sentiment on NAB:
- Final FY25 dividend payment on 12 December 2025, putting real cash in shareholders’ pockets and effectively resetting the yield calculation for new buyers. Investing.com+1
- NAB’s 2025 Annual General Meeting (AGM), scheduled for 12 December 2025, where governance, climate policies, housing commitments and job cuts are likely to feature in shareholder questions and proxy‑advisor recommendations. Banktrack+1
- Q1 FY26 trading update set for 18 February 2026, which will give the first detailed read on how margins, loan growth and credit quality are tracking under the new macro regime. TipRanks
- RBA decisions and macro data through early 2026 — particularly inflation prints, labour data and housing indicators — which will shape expectations for rate hikes or cuts and, by extension, NAB’s future earnings path. Reuters+2Reuters+2
Bottom line: a high‑quality bank priced for relatively few mistakes
On 11 December 2025, National Australia Bank sits in an interesting place:
- The business franchise is robust, with strong business‑lending momentum, a clear housing agenda and solid capital. NAB News+2NAB+2
- The dividend stream looks dependable in the absence of a severe downturn, offering a fully franked yield north of 4%. Google+2Investing.com+2
- But the share price already bakes in a lot of that quality, trading on a premium multiple and above many fundamental fair‑value estimates. Morningstar+2Yahoo Finance+2
For investors, the question is less whether NAB is a “good” bank — the franchise strength is widely acknowledged — and more whether today’s price adequately compensates for the uncertainties surrounding rates, housing, credit quality and regulatory risk.
