Home lending volumes suggest post-Budget fallout, although business lending enjoys strong quarter
NAB has seen a sharp slowdown in home lending demand in the three months to 30 June, even as its business banking arm posted some of its strongest growth in years.
According to NAB's ASX announcement, the value of home lending applications within its Business & Private Banking (B&PB) division was 9% lower compared to the previous quarter.
The decline was even steeper across NAB's total Australian home lending book, with applications down 15% quarter-on-quarter, suggesting softer demand is not confined to any single customer segment.
Despite the drop in new applications, B&PB's actual home lending balances still grew 2% over the quarter as loans already in the pipeline settling through to completion.
The pullback in mortgage applications comes as the industry grapples with the fallout from the controversial changes to negative gearing and capital gains tax (CGT) in the May Budget, alongside the equally controversial banning of residential SMSF lending.
Business lending offsets the slowdown
The mortgage figures stood in contrast to NAB's business lending performance.
B&PB business lending balances rose 4% over the quarter – the strongest June result since 2022 – while at-call deposit balances (excluding offset accounts) climbed 3%.
Asset quality also showed signs of improvement, with the ratio of non-performing loans to gross loans and advances (GLAs) easing from 3% in March to 2.91% in June.
However, ‘watch’ loans – accounts flagged for closer monitoring but not yet in default – rose 8% over the same period, which NAB attributed to "current and potential impacts from a challenging environment”.
Andrew Auerbach, NAB group executive for Business and Private Banking, said: "Business and Private Banking has continued to perform well in a challenging economic environment. It's pleasing to see the resilience of our business customers who continue to find opportunities to grow and innovate."
NAB said further detail on its June 2026 quarter performance will be provided alongside its third-quarter trading update, due Monday, 17 August.
