Owning National Australia Bank Ltd (ASX: NAB) shares could be a compelling choice this year because of how the economic situation is developing.
The ASX bank share‘s earnings are fairly exposed to the Reserve Bank of Australia (RBA) cash rate.
Generally, a higher RBA cash rate means NAB can earn a higher net interest margin (NIM) from lending out money that it doesn’t pay much/any interest on (such as transaction accounts). However, a higher rate could mean a higher risk of loan arrears and bad debts.
It’s uncertain at this stage how high inflation and interest rates will go. But, these are latest forecasts for earnings from broker UBS on where NAB’s earnings could change, which includes analysis on the latest quarterly update from the bank.
FY26
After seeing a record quarterly result in the first quarter of FY26, broker UBS decided to increase its earnings per share (EPS) estimates for FY26 by 2.8%, for FY27 by 2.1% and for FY28 by 0.8%, largely driven by an improving NIM and reduced credit charges in FY26 and FY27.
NAB’s FY26 first quarter earnings increased 16% year-over-year to $2.02 billion, while underlying profit rose by 11% year-over-year.
UBS noted that NAB’s NIM improved by 2 basis points (0.02%) to 1.8% over the quarter, supporting strong net interest income (NII) growth on the back of loan growth. NAB’s total loans and acceptances (GLAs) rose by 6%.
Costs were largely flat compared to the second-half quarterly average, but up 5% year-over-year because of tech spending and staff inflation.
UBS also said that NAB’s business lending was progressing more profitably its than peers, excluding Commonwealth Bank of Australia (ASX: CBA).
The broker thinks investors will focus on continued cost management, as well as loan growth with how the market treats the NAB share price.
UBS currently estimates that NAB could generate net profit of $7.5 billion in FY26.
FY27
The profit is expected to continue rising in the subsequent financial years.
In the 2027 financial year, NAB is projected to generate $7.7 billion of net profit.
FY28
UBS expects that NAB could deliver further net profit growth in the 2028 financial year, with net profit rising to $8 billion.
FY29
The 2029 financial year could see further growth in net profit, with earnings rising to $8.7 billion.
FY30
In the 2030 financial year, NAB could see net profit climb again in the final year of this series of projections, with earnings potentially climbing to $9.2 billion.
The post Here’s the latest earnings forecast out to 2030 for NAB shares appeared first on The Motley Fool Australia.
Should you invest $1,000 in National Australia Bank Limited right now?
Before you buy National Australia Bank Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and National Australia Bank Limited wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 20 Feb 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- Pulse check: How are the top 10 ASX 200 shares performing amid a new war?
- How higher interest rates could send CBA shares plunging 42%
- $5,000 invested in NAB shares 12 months ago is already worthâ¦
- Should I invest $2,000 in the VAS ETF?
- If I invest $5,000 in NAB shares, how much passive income will I receive in 2027?
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.