Update shared on 08 Dec 2025
Analysts have nudged their price target for National Australia Bank slightly higher to reflect a modest uptick in expected revenue growth and a marginally lower discount rate, while acknowledging a small softening in forecast profit margins and a slightly richer future price to earnings multiple.
What's in the News
- NAB is reportedly the leading contender to buy HSBC's Australian business, but is primarily interested in the retail banking operations. This creates uncertainty over how HSBC will structure any sale of the wider unit (M&A rumors and discussions).
- The HSBC Australia business on offer is understood to comprise about $40 billion of loans and $30 billion of deposits. Any transaction is expected to be valued in the billions of dollars depending on funding quality (M&A rumors and discussions).
- NAB has proposed amending its constitution at the 12 December 2025 AGM to formally allow non binding shareholder resolutions on issues of material relevance to the company, while restricting resolutions that would breach laws or pursue personal grievances (Changes in company bylaws/rules).
- Under the proposed constitutional change, shareholders would be able to express opinions, seek information, or request action on how directors exercise their powers. Any such resolutions would remain advisory and not binding on the board (Changes in company bylaws/rules).
- Within its Residential Mortgage Backed Note Issuance Programme, NAB has resigned as Issuer Account Bank and Account Bank. Clydesdale Bank PLC will remain as the sole Issuer Account Bank and Account Bank under amended account agreements (Client announcements).
Valuation Changes
- Fair Value Estimate: Unchanged at A$37.99 per share, indicating no overall shift in the analyst central valuation.
- Discount Rate: Edged down slightly from 7.80 percent to 7.80 percent (approximately 1.3 basis points lower), modestly increasing the present value of forecast cash flows.
- Revenue Growth: Ticked up marginally from 4.98 percent to 4.99 percent, reflecting a slightly more optimistic view on top line expansion.
- Net Profit Margin: Eased slightly from 33.71 percent to 33.67 percent, suggesting a minor softening in expected profitability.
- Future P/E Multiple: Increased marginally from 18.61x to 18.63x, implying a slightly richer valuation framework for future earnings.
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