Another of Australia’s big four banks is warning households and businesses the worst from the US-Iran war is far from over, as rapidly rising fuel prices put pressure on budgets.
National Australian Bank chief executive Andrew Irvine says household budgets will come under pressure, but points out many are starting from a “resilient” position.
“Conflict in the Middle East has created a far more volatile environment and we expect that to continue for some time to come,” he said in a media call.
His comments came after the big four bank announced statutory net profits of $2.75bn for the first half 2026, down from $3.41bn over the same period last year.
Overall NAB says its profits took a hit due to accounting policies related to software changes.
NAB – which is the country’s largest business bank – says it is talking to its customers, who are currently feeling financial pressures across multiple sectors.
Mr Irvine predicted a third interest rate hike after this week’s Reserve Bank monetary board meeting, but believes the vast majority of households will be able to survive it.
“The RBA has a devilishly difficult job ahead of them,” he said.
“Inflation is running too high and we have to get it under control. Inflation is bad for households and businesses.”
Despite cost-of-living pressures, NAB noted 80 per cent of customers did not reduce their home loan repayments in 2025.
At the same time, household offsets and redraw balances increased 9 per cent year-on-year.
“If I start with housing, buffers are very good. Eighty per cent of NAB’s customers chose not to reduce their payments when rates came down,” Mr Irvine said.
“If rates do go up, this will be the first time payments will actually be adjusted.”
According to NAB, households are not drawing down on their savings just yet.
Mr Irvine says businesses are changing their behaviour over the short-term to protect against the Middle East crisis.
“Consumers are more cautious but they have built strong buffers coming into (the crisis),” Mr Irvine said.
Mr Irvine said business or housing customers experiencing hardship should contact the bank.
In January the oil prices were about $US56 ($A80) per barrel, before temporarily touching $US120 (A$167) per barrel.
For every $10 increase in the price of oil, Australians pay an extra 10 cents at the fuel pump.
Mr Irvine’s comments were in line with those of ANZ chief executive Nuno Matos who last week said the Iran war was translating into greater economic uncertainty.
ANZ said so far its customers had been able to pay their mortgages, but Mr Matos said the war is translating into greater economic uncertainty.
