November, 2004

1
Investor Pack
November, 2004
2
Index
Overview Group Results Divisional
Contributions Credit Quality Provisioning Other
Matters Issues Actions Economics Executive
Board Profiles
Slides 3 5 6 15 16 34 35 40 41 49 50
68 69 76 77 81
3
Overview of Performance for the September 2004
half
Sep 04 HY
v Mar 04 HY
Bank Peer Average
Cash earnings growth Return on assets Return
on equity Total shareholder return 1 year 3
year 5 year
12.9 26 bps 5.7 points
9.3 0.99 18.2
?
1,611M 0.70 13.1
?
?
?
(7) 4 8
13 14 17
Before significant items Simple average
calculated on half year including results for CBA
(June 04), ANZ, SGB,WBC (Mar 04)
4
Rebuilding the National

• Progress so far
• Board and executive teams renewed
• Underlying problems identified
• Transitioning to a new operating model
• Embedding cultural change
• FX remedial actions
• Implementing Europe plans

5
Key areas impacting the Group during the second
half

• Net interest income
• Other operating income
• Expenses
• Corporate Institutional Banking
• Financial Services Australia
• Financial Services Europe
• Capital
• Significant items and balance sheet adjustments
• Business response to regulatory issues

6
Group Results
7
Group profit and loss for September 2004 half
Half year to
Change on
Change on
Sep 04
Mar 04
Mar 04 HY
Sep 03 FY
Banking net interest incomeBanking other
operating income Wealth Management income Net
operating income Banking operating
expensesWealth Management operating
expenses Charge to provide for doubtful
debts Cash earnings before tax and OEI Cash
earnings before significant items
3,5401,952 1,046 6,538 (3,115)(461) (254) 2,708
1,611
3,5192,044 933 6,496 (2,800)(436) (305) 2,955 1
,850
0.6(4.5) 12.1 0.6 (11.3)(5.7) 16.7 (8.4) (12.9)
(3.3)(6.6) 52.9 1.3 (6.6)(11.3) 11.7 (3.8) (15.
0)
Before significant items and net of
eliminations Includes net interest, net life
insurance and other operating income
8
Drivers of the Group result

• Margin compression
• FSE
• FSA
• CIB
• Other income
• Retail banking stalled across the Group
• CIB down dramatically
• Excessive cost growth across Group
• Poor culture of cost containment
• Regulatory compliance
• Protecting the Australian franchise
• Amortisation of deferred expenditure
• Specific provision down

9
September 2004 half cash earnings
Change on Mar 04 HY
Sep 04 HY
Mar 04 HY
Change onSep 03 FY
Old Divisions
Financial Services Australia
999
(12.2)
flat
877
Financial Services Europe
290
308
(5.8)
(33.3)
Financial Services New Zealand
171
158
8.2
5.8
Corporate Institutional Banking
243
375
(35.2)
(29.5)
Wealth Management
188
221
(14.9)
9.4
New Regional Structure
Australia
1,151
1,250
(7.9)
Europe
324
294
10.2
New Zealand
191
188
1.6
103
329
(68.7)
Institutional Markets Services Group Funding
Corporate Centre
(65)
(117)
44.4
Cash earnings before significant items
Regions include the Financial Services business,
Wealth Management and former Corporate and
Institutional Banking (CIB) Businesses of
Transaction Banking, Custodian Services and
Corporate Banking. The remainder of the CIB
business is within Institutional Markets
Services
10
Net interest margin September 2004 down 18bps on
the year
Group NIMContraction
Sep 04 YrNIM
NIMContraction
of Group AIEA
Sep 03 YrNIM
AIEASep 04 Yr Bn
Sep 03 Yr
Sep 04 Yr
126 53 27 134 (34) 306
2.81 4.03 2.58 0.50 (0.38) 2.35
Financial Services Australia Financial Services
Europe Financial Services New Zealand Corporate
Institutional Banking Other (inc WM Elims) Sub
Total Change in Divisional Mix Group Impact
3.14 4.30 2.71 0.62 (0.22) 2.53
(33bps) (27bps) (13bps) (12bps) (16bps)
38.2 18.5 8.2 46.5 (11.4) 100.0
41.2 17.2 8.8 43.9 (11.1) 100.0
(13bps) (4bps) (1bp) (5bps) - (23bps) 5bps (18bps)
In the Results Announcement this is allocated
across the Divisional contributions to Group NIM
contraction
11
Net interest margin September half down 11bps on
the March half
of GroupAIEA
Group NIMContraction
NIMContraction
Mar 04 HYNIM
AIEA Sep 04 HY Bn
Sep 04 HYNIM
Mar 04 HY
Sep 04 HY
Financial Services Australia Financial Services
Europe Financial Services New Zealand Corporate
Institutional Banking Other (inc WM Elims) Sub
Total Change in Divisional Mix Group Impact
2.71 3.92 2.60 0.45 (0.25) 2.29
(20bps) (24bps) 4bps (11bps) (13bps)
129 56 28 137 (36 314)
41.2 16.7 8.7 43.9 (10.5) 100.0
41.2 17.7 8.9 43.8 (11.6) 100.0
(8bps) (4bps) 0bp (5bps) 3bps (14bps) 3bps (11bps)
2.91 4.16 2.56 0.56 (0.12) 2.40
In the Results Announcement this is allocated
across the Divisional contributions to Group NIM
contraction
12
Volume growth in the September half
Retail Deposit Growth (average)
Group Lending Growth (average)
Housing
Business
Personal

-2
0
2
4
6
8
10
H1 04
H2 04
H1 04
H2 04
At constant exchange rates
13
Banking other operating income down 83M in the
September 2004 half
m
39
22
2,270
15
2
4
(74)
2,124
2,110
2,027
(9)
(82)
Sep 03 HY
Mar 04 HY
Other CIB
FSA
FSE
FSNZ
Other
Exch Rate
Sep 04 HY
Mar 03 HY
Markets
Specialised Finance
Before significant items
14
Banking expenses increased 324M in the
September 2004 half.
m
71
42
34
11
17
23
54
45
27
3,190
2,915
2,866
2,750
RegulatoryNAB
Exch. Rate
Sep 04 HY
Mar 03 HY
Mar 04 HY
UKInvest.
CIB
Other Personnel
Other Prof.Fees
Other
Sep 03 HY
Regulatory Industry
AustFranchise
Before significant items Excludes
performance-based remuneration
15
Significant drivers of banking expense growth
Increase over Mar 04 HY
1. Regulatory spend
Basel ll and IFRS
23m
Sarbanes Oxley
4m
2. Regulatory spend - NAB specific
APRA
9m
SEC auditor independence
4m
Management changes and business reviews
32m
3. Australian franchise re-investment
Branding and advertising
33m
Reversing previous front line staff cuts
13m
Docklands
8m
4. UK Investment
Strategic review and integration
14m
Growth related initiatives
4m
Regulatory and compliance
5m
5. Corporate Institutional Banking
Sale of the UK Custody business
17m
16
Divisional Contributions
17
Corporate Institutional Banking cash earnings
down 36.3 on the March half
Half year to
Change on
Sep 04 m
Mar 04 m
Mar 04 HYex FX
Sep 03 FYex FX
Net interest incomeOther operating incomeTotal
income Total expenses Underlying profit Cash
earnings
307452759 (458) 301 243
371596967 (400) 567 375
(19.4)(25.5)(23.2) (11.5) (47.6) (36.3)
(15.8)(1.0)(7.4) (18.5) (23.8) (26.5)
Revenue v expense growth
m
1100
900
Revenue
700
500
Expense
300
Mar 02 HY
Sep 02 HY
Mar 03 HY
Sep 03 HY
Mar 04 HY
Sep 04 HY
Total Income
Operating Expenses
Before significant items and after outside
equity interest At constant exchange rates
18
CIB income declined 23.2 while expense
increased 11.5 on the March half
Income down 23.2
Expenses up 11.5
m
12
9
12
8
458
17
446
400
380
375
Sale of CustodyBusiness
APRA
Basel/IFRS
Other
Sep 04 HY
Mar 04 HY
Exch Rate
Mar 03 HY
Sep 04 HY
Sep 03 HY
Before significant items At constant exchange
rates
19
Strategic issues facing CIB

• Deployment of assets in non-core markets - focus
  on capital, risk-weighted assets consumed, and
  returns generated
• Earnings decline in transaction driven business -
  relationship driven business held up
• Impact of currency options restrictions
• Clients waiting for full product suite
• External research indicates
• Corporate Banking of lead relationships down
  from 41 to 37 ¹
• Transactional Banking 1.5 improvement in market
  share but still 4th ²
• Markets Remain strong in the corporate bond
  market. However, overall league table ranking
  has slipped from top 3 position ¹

(¹source Peter Lee Associates, Large
Corporate Banking Report 2004) (²source East
Partners, Transactional Banking Report 2004)
20
Financial Services Australia cash earnings down
12.2 on the March half
Change on
Half year to
Mar 04 HY
Sep 03 FY
Sep 04 m
Mar 04 m
Net interest incomeOther Operating IncomeTotal
income Total expenses Underlying profit Cash
earnings
1,7531,0042,757 (1,401) 1,356 877
1,7999892,788 (1,254) 1,534 999
(2.6)1.5(1.1) (11.7) (11.6) (12.2)
0.92.21.4 (6.1) (2.6) 0.3
Average Volume Growth
Housing
Business
Personal Credit
Retail Deposits
-2
0
2
4
6
8
10
H2 04
H1 04
Growth including Bill acceptances
Before significant items
21
Financial Services Australia net interest margin
down 20bps on the half year
2.91
-0.09
0.03
-0.01
-0.05
-0.01
-0.06
-0.01
2.71
Mar 04HY
BasisRisk
Change inProductMix
CapitalBenefit
IRMMismatch/Other NII
Sep 04HY
Change inProductMargins
Change inProductMix
Change inProductMargins
BasisRisk
Liability Side 8 bps contraction
Asset Side 11 bps contraction
22
Financial Services Australia expenses increased
by 147M in the half
m
15
5
19
23
41
33
10
1,401
1,288
1,254
1214
Mar 04 HY
ProfFees
Occupancy
Other
Sep 04 HY
Mar 03 HY
Sep 03 HY
AcctgChange
BrandRefresh
Personnel
Basel/IFRS
Before significant items
23
Financial Services Australia current state of
the franchise
21.6 16.7 16.7 27.8 13.4
22.0 17.2 17.8 27.7 13.6
1 2 4 1 3
Sep 04
Mar 04
Rank
Market share
Business Lending (incl Bills) Housing (incl
Securitisation) Credit Cards Business
Deposits Household Deposits
FSA Customer Numbers
Customer turnover increased post FX losses
80,000
60,000
Returning to more normal levels
40,000
20,000
-20,000
Cumulative customer 's
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Lost customers
New customers
Ranking among licensed banks Includes
Corporate Institutional Banking Excludes
Bank Held Bills Source APRA Monthly Banking
Statistics / National (September 2004)
24
Financial Services Europe cash earnings down
11.6 on the half
m
Half year to
Change on
Mar 04
Sep 04
Mar 04 HY
Sep 03 FY
Net interest incomeOther operating incomeTotal
income Total expenses Underlying profit Cash
earnings
428167595 (390) 205 114
436172608 (374) 234 129
(1.8)(2.9)(2.1) (4.3) (12.4) (11.6)
(2.6)(5.0)(3.3) (16.3) (25.2) (28.5)
Average Volume Growth
Housing
Business term
Personal lending
Retail deposits
-6
-4
-2
0
2
4
6
8
H1 04 H2 04
Before significant items
25
Financial Services Europe net interest margin
down 24bps in the September 2004 half
4.16
-0.01
-0.08
-0.08
0.01
0.02
-0.08
-0.02
3.92
Mar 04HY
BasisRisk
Change inProductMix
CoreFundsBlendedrate/other
IRMMismatch
Sep 04HY
Change inProductMargins
Change inProductMix
Change inProductMargins
BasisRisk
Asset Side
Liability Side
17 bps contraction
1 bp contraction
26
Financial Services Europe expense growth
driven by projects
m
2
5
12
2
(5)
390
374
341
316
Mar 03 HY
Sep 03 HY
Mar 04 HY
Basel/ IFRS
Other
Sep 04 HY
GrowthInitiatives
UK Investment
Pensions
Before significant items
27
Financial Services Europe current state of the
franchise
Net Movement FSE - Personal Customer Numbers
0
-0.20
Quarterly change
-0.40
-0.60
-0.80
Sep 02
Mar 03
Sep 03
Mar 04
Sep 04
2,200
BFS Scotland Core Advances Volumes
2,150
2,100
m
2,050
2,000
1,950
Sep 04
Dec 02
Dec 03
Mar 04
Jun 04
Sep 03
Jun 03
Mar 03
28
Financial Services New Zealand cash earnings up
5.6 on the March half
Half year to
Change on
NZm
Sep 04
Mar 04
Mar 04 HY
Sep 03 FY
8.4-5.6 (5.5) 5.7 6.6
Net interest incomeOther operating incomeTotal
income Total expenses Underlying profit Cash
earnings
404185589 (299) 290 190
382182564 (280) 284 180
5.81.64.4 (6.8) 2.1 5.6
Average Volume Growth
Housing
Business term
Personal lending
Retail deposits
0
2
4
6
8
10
H1 04 H2 04
Before significant items
29
Financial Services New Zealand net interest
margin up 4bps in the September 2004
2.60
0.04
0.01
0.00
2.56
0.00
-0.05
0.08
-0.04
0.00
Mar 04 HY
Basis Risk
Change in Product Margins
Change in Product Mix
Basis Risk
Change in Product Margins
Change in Product Mix
Capital Benefit
IRM Mismatch / Other NII
Sep 04 HY
Asset Side
Liability Side
9 bps contraction
9 bp expansion
30
Financial Services New Zealand current state of
the franchise
Satisfaction with Main Bank - Personal Market
source RBNZ Corporate Value Associates
Represents Mar 04 data Represents Mar 03 data
How would you rate your main provider of
financial services on its overall service?
(Margin of error for BNZ /- 5)
75
70
65
60
'Excellent/Very Good'
Rating Main Provider
55
50
45
40
35
Sep-01
Mar-02
Sep-02
Mar-03
Sep-03
Mar-04
AC Neilson
ANZ
ASB
BNZ
National
Westpac
31
Wealth Management profit down 14.9 in the
September 2004 half
Operating profit after tax
Change on
Half year to
Mar 04 HY
Sep 04 m
Mar 04 m
Sep 03 FY
InvestmentsInsurancePrivate BankOther (incl.
Regulatory programs)Spend on new
platformsProfit from Operations (after
tax) Investment earnings shareholdersretained
profits capital from lifebusiness Underlying
operating profit after tax OEI Prior year
adjustments Operating profit after tax OEI
10210730(15)(23)201 27 228 (40) 188
8712132(37)(16)187 44 231 (10) 221
17.2(11.6)(6.3)59.5(43.8)7.5 (38.6) (1.3) l
arge (14.9)
33.111.810.710.3(39.3)22.8 22.4 22.7 large
9.4
Operating profit after tax and OEI and before
significant items and revaluation profit
32
Revaluation profit reflects changing industry
dynamics
Revaluation loss before tax (137)m Tax (incl.
Impact of tax consoln) 153m Revaluation
profit after tax 16m
Revaluation Loss before tax (137)m
Revaluation Loss (pre tax consoln) before tax -
(74)m
Shareholders net assets13m
Roll forward 385m
Net change in business assumptions experience
(459)m
Tax consoln Transfer of franking credits (63)m
6,633m
6,509m
Sept 03 Yr
Sept 04 Yr
Changes in Assumptions Experience

• Lower near term sales growth for Retail
  investments
• Lower margins on wholesale business
• Impact of business decisions to close products
• Continued cost containment

33
Wealth Management
Master Fund Market Share plus Flows
25
20
FUM market share
15
Annual inflowsmarket share
10
5
Attrition rate
0
Mar-02
Sep-02
Mar-03
Sep-03
Mar-04
Insurance - Retail Risk Market Share
18
15
Inforce premiummarket share
12
9
6
New sales marketshare
3
0
Mar-02
Sep-02
Mar-03
Sep-03
Mar-04
34
Wealth Management
Share of annual platform inflows
Platform Attrition Rate
20
40
18
35
16
30
14
25
12
10
20
8
15
6
10
4
5
2
0
0
Mar 02
Sep 02
Mar 03
Sep 03
Mar 04
Mar 02
Sep 02
Mar 03
Sep 03
Mar 04
Jun 04
National Australia / MLC Group
ING Australia Group
Commonwealth / Colonial Group
BT / Westpac Group
AMP Group
Industry average
35
Credit Quality Provisioning
36
Restatements
Gross Non-Accrual Loans
90 Days Past Due Loans
m
m
829
1,633
1,600
800
1,434
254
204
1,230
263
563
1,200
600
226
492
129
132
800
400
1,379
1,171
625
1,004
434
360
400
200
0
0
Sep 03
Mar 04
Sep 04
Sep 03
Mar 04
Sep 04
Restatement to exclude 1 large exposure and
includes reclassifications
Restatement to include 1 large exposure
Impact of 1 large exposure in current half
Settled Oct 04
37
Adjustment to the general provision

• Review undertaken of emerging trends in industry
  practice
• Consideration of developments in accounting
  literature
• Discount rate applied to cumulative probabilities
  of default reduced
• Increase general provisions by 292m
• Treated as a significant item

38
General provisioning coverage levels have
increased
Provision Coverage Ratios
250
200
Total Provisions / Total Impaired Assets
150
100
Specific Provisions / Total Impaired Assets
50
Sep 01
Sep 02
Sep 03
Sep 04
Sep 99
Sep 00
0
General Provisions to Risk Weighted Assets
(Excluding Housing)
1.6
1.42
1.4
1.37
ANZ
1.29
1.2
CBA
1.0
WBC
0.99
NAB
0.8
Sep 01
Mar 02
Sep 02
Mar 03
Sep 03
Mar 04
Sep 04
39
Portfolio remains sound with write off levels
down and key quality indicators improving
Total Net Write-offs to Risk-Weighted Assets
(excl Housing)
0.40
NAB
0.30
CBA
ANZ
0.20
WBC
0.10

HY
HY
HY
HY
HY
HY
HY
HY
Sep97
Sep98
Sep99
Sep00
Sep01
Sep02
Sep03
Sep04
CRS 1-6 of Total Balance
Group Fully Secured lending of Total Balance
80
45
76
42
72
39
68
36
64
33
Sep 01
Sep 03
Sep 04
Sep 01
Sep 02
Sep 02
Sep 03
Sep 04
60
30
Excludes Housing and All Personal Loans
40
Non-accrual levels down but impacted by
reclassifications
Gross Non-Accrual Loans
4,000
m

4
3,000
3
2,000
2

1,000
1
Sep 85
Sep 87
Sep 89
Sep 91
Sep 93
Sep 95
Sep 97
Sep 99
Sep 01
Sep 03
Sep04
0
0
Gross NALs
Gross NALs to Gross Loans Acceptances
Restated NAL
90 Delinquency and Gross 12 Month Rolling Write
Off Rates Total Personal Lending
0.60
90 DelinquencyRate - Old Series
0.50
90 DelinquencyRate - New Series
Series Break
0.40
Gross 12 monthrolling write-offrates
0.30
Sep 04
Mar 02
Sep 02
Mar 03
Sep 03
Mar 04
41
Other Matters
42
Review of particular balance sheet items

• Capitalised software Significant item 409m
• General loan loss provision - Significant item
  292m
• Defined benefit pension accounting
• Wealth Management internally generated goodwill
• Capitalised mortgage broker commissions

43
Capital remains within or above target ranges

12
10
Target Ranges ()
Targets
Sep 04 Actual
8
4.75 5.25
ACE/RWA
5.30
10.6
6
9.6
9.3
7.34
7.00 7.50
Tier 1
4
7.8
7.4
7.3
5.3
5.3
10.58
4.9
10.00 10.50
Total Regulatory
2
-
Sep 03
Mar 04
Sep 04
ACE Target Range
ACE
Tier 1
Tier 1 Target Range
Total Regulatory Capital
Total Regulatory Target Range
44
Movement in ACE regulatory capital
Movement in ACE Ratio

6.00
0.07
(0.18)
0.51
(0.46)
5.50
0.07
0.08
(0.07)
(0.22)
0.17
5.00
5.33
5.30
4.50
ACEMar 04
WM profitnet ofdividends
Profitbeforesignificantitems
Significantitems(after tax)
Dividendsdistributions
Changein RWAcredit
Changein marketRWA
FXimpact
Capitalisedexpenses
Other
ACESep 04
45
Dividend maintained
Dividend Growth
Centsper share
180
166
163
147
160
135
140
123
120
100
80
60
40
20
0
2000
2001
2002
2003
2004
Final dividend
Interim dividend
46
Regulation compliance update

• Wide range of regulatory reviews.
• Significant direct and indirect costs.
• Must embed effective regulatory and compliance
  behaviours.
• Response to APRA
• Have submitted 65 of 81 remedial actions
• 24 actions have been closed

47
Project / investment spend - IFRS and Basel II
IFRS Project (m)
Europe
NZ
Total
Aust
Management
Enabling Infrastructure
32
2
15
-
49
Process Automation
11
-
4
2
17
Compliance Delivery
35
12
24
3
74
Total Cash Budget
78
14
43
5
140
Operational Expense
99
Capital Budget
41
Cash spend to date
60
Sep 05
Estimated Completion
Global/
Wealth
Basel II Project (m)
Aust
Management
Europe
NZ
Total
Enabling Infrastructure
11
-
19
1
31
Process Automation
56
1
27
9
93
Compliance Delivery
52
1
2
2
57
Total Cash Budget
119
2
48
12
181
Operational Expense
125
Capital Budget
56
55
Cash spend to date
Estimated Completion
Jan 06
48
Taxation
Wealth Management Concessionally taxed life
product fees to be taxed at the corporate tax
rate from 1 July 2005. Other Issues
Received Assessment
Potential Assessment
NZ Structured Finance deals
NZ57M
NZ387M
EXCAPS
135M
307M
TrUEPrS
20M
150M
No provisions have been raised
Based on primary tax only interest and
penalties may also apply
49
March 05 half

• Restructuring Charges
• Developing detailed plans to move to the regional
  model
• Changes already underway within wealth management
• Some regions more progressed than others
• Restructuring activity ongoing through the first
  half
• Plans and charges finalised by the 04/05 half
  year result

50
Issues Actions
51
Underlying issues identified
2. Regulatory Compliance
1. Culture and People

• Business Inefficiency
• Complexity
• Bureaucratic

• 4. Stalled Revenue
• Inward looking
• Business processes not customer focused

52
Employee engagement
2.Regulatory Compliance
1. Culture People

• Business Inefficiency

• 4. Stalled Revenue

NAB Employee Engagement 36 Australian
Financial Services 54 Global High Performing
Companies 69 Australian Best Employers 77
Average TSR - 9pa
45
Average TSR gt 20pa
65
NAB
Indifferent Zone
30
Uncertain Zone
Average TSR is Negative
Best Employer Zone
CriticalZone
100
0
Benchmark Averages
53
People and behaviours

• Peter Scott
• John Hooper
• Lynne Peacock
• Elizabeth Hunter
• Ross Pinney
• Peter Thodey

• Michael Ullmer
• Ahmed Fahour
• Cameron Clyne
• Gavin Slater
• Graeme Willis
• Ian MacDonald

Not at results presentation
54
Embedding cultural change
2.Regulatory Compliance
1. Culture People

• Business Inefficiency

• 4. Stalled Revenue

• New Leadership team
• Corporate principles
• Clarity of roles and responsibilities
• Reward strategy
• Performance Management Framework
• Talent Management Strategy

55
Group compliance and risk
2.Regulatory Compliance
1. Culture People

• Business Inefficiency

• 4. Stalled Revenue

Compliance and Quality Failures
Homeside NAFiM unit repricing issues UK
investment sales review FX options trading NIB
Investigations
Cost 3,873m 110m 61m 360m 98m
56
Compliance and risk actions

• New Finance and Risk structure
• FX remedial actions
• Clarifying roles and responsibilities
• Compliance embedded in performance management
  framework

57
Indirect costs
2.Regulatory Compliance
1. Culture People

• Business Inefficiency

• 4. Stalled Revenue

Proportion of costs charged to one business unit
by another business unit
Europe Clydesdale Yorkshire National
Irish Northern Australia Business Personal Cards
Agri Business
2002 36 36 33 34 58 55 39 42
2003 36 38 32 31 55 59 41 43
2004 38 41 34 39 56 52 47 47

58
Amortisation burden
CAGR (2001-04) -16 43
m Cash Spend Amortisation Software
write-downs Year End Software Balance
2004 (489) (189) (444) 655
2003 (496) (152) (59) 955
2002 (510) (106) (147) 884
2001 (814) (65) (18) 840
59
Process Inefficiency
Purchase of John Stewarts Computer
2. Managerial IT provide specifications to
Belfast TI purchasing who creates purchase order
7. Glasgow desktop services installs software and
delivers laptop to Wood St
6. Provider send laptop to Glasgow to software
installation
1. Request purchase of computer
3. Belfast emails Order to London for approval
5. Belfast send order to Provider
4. Organise approval - faxes to Glasgow and mails
original to Belfast
Hardware Provider (location not known)
6. Provider send accessories directly to Wood St
60
Regional operating model
New Model
Old Model
One customer
One customer
Three discrete offerings
One integrated offering
Three separate businesses
One customer focused business
By
By
Three separate infrastructures
One streamlined infrastructure
With
With
61
Europe

• Integration and efficiency
• Legal entity merger
• Moving from 77 to 16 core products
• Integrating back offices
• New operating model

62
Europe

• Growth
• Brand repositioning
• New products offset mortgage
• IFS opened 8 new centres
• Third party mortgage distribution launched in
  April 04
• Customer attrition has declined by 5.8 in 2004
• Customer acquisition has grown 6 in last 6
  months after declining for the prior 2 years

63
Projects and technology

• Clear benefits tracking
• Six sigma
• Technology to support customer

64
Business Australia
2.Regulatory Compliance
1. Culture People

• Business Inefficiency

• 4. Stalled Revenue

Full Time Employees
3800
3700
3600
BFS FTE's
3500
PfG staff reductions
3400
Rebuilding capability
3300
3200
Mar-03
Mar-02
Mar-04
Sep-02
Sep-03
Sep-04
Sep-02
65
Tightening risk settings
Housing Lending - Australia
Annual Growth Rates ()
26
24
22
Annual Growth Rates ()
20
18
National
16
Financial System
14
Aug-04
Apr-04
Jun-04
Oct-03
Feb-04
Dec-03
Aug-03
Source RBA/FSA
66
Restoring risk settings

• Consumer risk settings
• More high rated approvals at front line
• Restore LVR ratios for investment properties
• Business risk settings
• Removing 24 restrictions on bankers authorities
• Simplify credit applications and processes

67
Outlook

• Poor result
• Baked in costs and slowing revenue momentum make
  our starting point for 05 difficult
• Expect earnings to bottom in current half and
  recover in following 12 months
• Expect to maintain first half dividend at current
  levels

68
Looking Forward

• Platform for change
• Relentless execution is the key
• Great franchises
• Know what needs to be done

69
Economics
70
Mild housing downturn being experienced in
Australia
Movements in housing prices and finance approvals
60
HOUSING FINANCE APPROVALS
ABS HOUSE PRICE SERIES
50

• Housing prices peaked early 2004
• Price reductions have been modest
• Volumes are slowing, primarily in investment
  housing
• Still expecting robust housing growth

40
30
Annual Change
20
10
0
-10
-20
-30
-40
Dec-79
Dec-85
Dec-91
Dec-97
Dec-03
Housing credit growth
71
Housing cycle appears to have peaked in New
Zealand
Movements in housing prices and finance approvals

• Housing prices peaked in June 2004 quarter
• House price growth is slowing
• Volumes are declining but still high by
  historical standards
• It is taking longer for houses to sell

50
40
30
20
Annual Change
10
0
-10
-20
-30
-40
Jun 88
Jun 92
Jun 96
Jun 00
Jun 04

SALES NUMBERS
HOUSE PRICES
72
Housing market is cooling in the UK
Movements in housing prices and finance approvals

• House prices easing
• Volumes are slowing
• Time taken to sell is increasing
• Discounts to asking price are increasing
• Stock levels are also increasing

Annual Change
73
Group Economic Environment

• Business conditions will remain somewhat mixed
  across the Group.
• Unemployment rates should remain at relatively
  low levels in our main regions.
• GDP growth is forecast to be 3.75 in Australia,
  2.75 in the UK and 2 in New Zealand in the
  2004/05 bank year.
• In Australia, some moderation in domestic
  activity (largely household spending) offsets a
  pick up in the tradeables sector.
• In NZ, domestic conditions are forecast to
  moderate significantly during the next year due
  to tighter financial conditions slower
  immigration.
• In the UK, business activity is expected to ease
  back to trend reflecting some moderation in
  household spending external demand.
• RoI activity is expected to consolidate as as
  strong domestic demand offsets some moderation in
  the external sector.

74
Economic EnvironmentSustained growth low
unemployment




12
12
10
10
8
8
6
6
4
4
2
2
0
0
-2
-2
1995
1997
1999
2001
2003
2005




RoI
UK
Growth
Unemployment
75
Economic EnvironmentCredit growth to moderate
somewhat
Credit Growth
Australia
New Zealand




25
25
20
20
15
15
10
10
5
5
0
0
-5
-5
Sep-89
Sep-93
Sep-97
Sep-01
Sep-05
Sep-91
Sep-95
Sep-99
Sep-03
Group - Asset Wtg



UK and RoI

25
25
25
25
20
20
20
20
Ireland
15
15
15
15
10
10
10
5
5
5
UK
0
0
0
Sep-89
Sep-93
Sep-97
Sep-01
Sep-05
Sep-91
Sep-95
Sep-99
Sep-03
System
Secured Housing
76
Macro Risks

• Geopoltics - Both political trade tensions
  overhang the outlook.
• Unbalanced global growth Much still depends on
  the US Asia. Continental Europe continues to
  lag.
• Anglo-Saxon household leverage Increased
  household gearing, low savings and expensive
  housing leaves some consumers vulnerable to
  higher interest rates sustained loss of jobs.
• Financial instability As interest rates rise to
  more normal levels, some asset valuations may
  become volatile lead to instability amongst
  investors and institutions.
• Oil prices - Sustained high prices would prove a
  headwind to the global recovery under way.

77
Executive Board profiles
78
Biography of Executive Committee members
Mr John Stewart Managing Director and Chief
Executive Officer Mr John Stewart was appointed
Managing Director and Chief Executive Officer in
February 2004. John joined National Australia
Group Europe in August 2003 as Chief Executive,
Europe and Principle Board Member.
Mr Ahmed Fahour Chief Executive Officer,
Australia Mr Ahmed Fahour joined the National on
1st September 2004. Ahmed is responsible for
bringing together the three main business units
in Australia, Corporate and Institutional
Banking, Wealth Management and Financial Services
Australia. Ahmed is also a Principle Board Member.
Mr John Hooper Executive General Manager,
Institutional Markets and Services Prior to being
appointed Executive General Manager of
Institutional Marketing Services in August,
John had been Acting Executive General Manager
since March 2004. John has been with National
Australia Bank since 1996.
Mr Ian MacDonald Chief Information Officer Ian
was appointed Chief Information Officer, in
August 2004, bringing extensive leadership and
operational experience to the role. Ian joined
the National in 1971 and has held various retail,
corporate, international and credit roles.
Mrs Lynne Peacock Chief Executive, Financial
Services Europe Lynne was appointed Chief
Executive for Europe in October 2004. Lynne
joined the Group as an Executive Director of
National Australia Group Europe in September 2003
and was appointed Executive General Manager,
People  Culture in April 2004.
Mr Ross Pinney Executive General Manager, Office
of the CEO Prior to being appointed Executive
General Manager, Office of the CEO Ross was Chief
Executive of our European operations. Ross has
held a number of senior roles within the group in
all regions.
79
Biography of Executive Committee members
Mr Peter Thodey Chief Executive Officer, Bank of
New Zealand Mr Peter Thodey is Chief Executive
Officer, Bank of New Zealand. He was appointed to
this position in March 2000, after four years as
General Manager, Business Financial Services for
the Bank of New Zealand.
Mr Michael Ullmer Group Chief Financial
Officer Mr MIchael Ullmer joined the National
Australia Bank Group on 1st September 2004.
Michael brings more than 30 years experience in
financial services to his role as Group Chief
Financial Officer. Michael is also a Principle
Board Member.
Mr Cameron Clyne Executive General Manager,
Customer Solutions Mr Cameron Clyne joined the
National in August 2004. Cameron was previously
with IBM Business Consulting Services and
PricewaterhouseCoopers. The majority of Camerons
experience is with the financial services
industry.
Mr Gavin Slater Group General Manager Mr Gavin
Slater is currently heading up the program
addressing the APRA remedial action. Gavin joined
the National in 99 and has held a number of
roles.
Note Elizabeth Hunter will become EGM People
and Culture beginning 1st Dec 04 Michael Hamer
will become EGM Risk beginning 29th Nov
04 Deputy CFO still to be announced
80
Biography of Board Members
Mr Graham J Kraehe Non-executive director since
1997 Chairman since February 2004 Mr Kraehe
brings to the Board almost 40 years experience
in international, diversified industries,
including leadership roles at Pacifica Limited
and Southcorp Limited. He has extensive Board
experience, and is also the Chairman of BlueScope
Steel Limited.
Mr Peter J B Duncan Non--executive director since
2001 Mr Duncan adds vast international experience
to the Board, having spent 36 years with Royal
Dutch/Shell Group of companies in Australia, New
Zealand, South America, Europe and South East
Asia.
Mr Danny T Gilbert Non-executive director since
September 2004 Mr Gilbert represents an important
customer group for the National small and
medium businesses having co-founded Gilbert
Tobin, a successful Australian law firm. He also
brings not-for-profit experience to the Board,
through extensive work in social justice issues.
Mr Robert Elstone Non-executive director since
September 2004 As Managing Director of SFE
Corporation Ltd, the holding company of Sydney
Futures Exchange Ltd, Mr Elstone has experience
in the oversight of derivatives trading and risk
management, public policy and regulatory issues.
Mr Paul Rizzo Non-executive director since
September 2004 Mr Rizzos broad financial
management experience and skills, together with a
background in banking, adds valuable financial
services capabilities to the Board.
Ms Jillian Segal Non-executive director since
September 2004 Ms Segal brings legal and
regulatory knowledge to the Board, as a former
Commissioner of the Australian Securities and
Investment Commission and as a current Director
of Australian Stock Exchange Limited.
81
Biography of Board Members
Mr Geoffrey A Tomlinson Non-executive director
since 2000 Mr Tomlinson spent almost 30 years
with the National Mutual Group (including six
years as Group Managing Director and Chief
Executive Officer), bringing valuable financial
services industry experience to the Board of the
National.
Mr John G Thorn Non-executive director since
October 2003 With almost 40 years experience at
PricewaterhouseCoopers (PwC), Mr Thorn brings
insights in professional services and auditing,
having been a member of PwCs Global Audit
Management Group.
Mr G Malcolm Williamson Non-executive director
since August 2004 Mr Williamson brings to the
Board extensive international experience in the
financial arena as a former Chief Executive
Officer of Visa International and having had
senior leadership positions across a number of
other financial services businesses.
Mr Michael Chaney Proposed non-executive director
from December 2004 Proposed Chairman from
September 2005 Mr Chaney is a highly respected
business leader, with substantial experience in
the finance and other industries. He is the
Managing Director and Chief Executive Officer of
Wesfarmers until his planned retirement in July
2005.
82
Disclaimer
The preceding material is a presentation of
general background information about the
Nationals activities current at the date of the
presentation, November, 2004. It is information
given in a summary form and does not purport to
be complete. It is not intended to be relied upon
as advice to investors or potential investors and
does not take into account the investment
objectives, financial situation or needs of any
particular investor. These should be considered,
with or without professional advice when deciding
if an investment is appropriate.