National Australia Bank : NAB Capital Notes 4 Replacement Prospectus

February 25, 2020 at 03:54 am EST

800 Bourke Street Docklands VIC 3008 AUSTRALIA

www.nab.com.au

Tuesday, 25 February 2020

ASX ANNOUNCEMENT

NAB Capital Notes 4 Offer - Replacement Prospectus

Further to the announcement made by National Australia Bank (NAB) on Monday, 24 February 2020 following completion of the Bookbuild,1attached is the replacement Prospectus in connection with the NAB Capital Notes 4 Offer.

The Offer opens today and is expected to close on Tuesday, 17 March 2020.

Media

Jessica Forrest	Sarika Thach
M: +61 (0) 457 536 958	M: +61 (0) 476 808 241

Investor Relations

Sally Mihell	Natalie Coombe
M: +61 (0) 436 857 669	M: +61 (0) 477 327 540

Further information in relation to NAB Capital Notes 4 and the Offer

Please call the NAB Information Line on 1300 367 647 Monday to Friday 8.00am - 7.30pm (Melbourne time) during the Offer Period, and for a week following.

The release of this announcement was authorised by Gary Lennon, Group Chief Financial Officer.

1Capitalised terms which are used in this announcement have the meaning given to them in the Prospectus unless the context requires otherwise.

National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686

PROSPECTUS

NAB CAPITAL NOTES 4

Prospectus for the issue of NAB Capital Notes 4 to raise $1,950 million with the ability to raise more or less.

This investment is riskier than a bank deposit. NAB Capital Notes 4 are complex and may not be suitable for all investors. They are not guaranteed or secured, are not Protected Accounts and are not deposit liabilities for the purposes of the Banking Act. You should carefully consider the risks and other information in this Prospectus in light of your investment objectives, financial situation and particular needs (including financial and taxation issues).

If you do not fully understand how NAB Capital Notes 4 work or the risks associated with them, you should seek advice from your financial adviser or other professional adviser before deciding to invest in NAB Capital Notes 4.

Issuer

National Australia Bank Limited

ABN 12 004 044 937

Arranger

National Australia Bank Limited

Joint Lead Managers

National Australia Bank Limited

Morgan Stanley Australia Securities Limited

Morgans Financial Limited

Ord Minnett Limited

UBS AG, Australia Branch

Westpac Institutional Bank

Co-Managers

Bell Potter Securities Limited

Crestone Wealth Management Limited

JBWere Limited

Shaw and Partners Limited

IMPORTANT NOTICES

About this Prospectus

This Prospectus relates to the offer by National Australia Bank Limited ABN

12 004 044 937 ("NAB") of NAB Capital Notes 4 to raise $1,950 million, with the ability to raise more or less.

This Prospectus is dated

25 February 2020 and a copy of this Prospectus was lodged with the Australian Securities and Investments Commission ("ASIC") on that date. This is a replacement Prospectus, which replaces the Prospectus dated 17 February 2020 and lodged with ASIC on that date ("Original Prospectus"). This Prospectus expires on the date which is 13 months after the date of the Original Prospectus and no NAB Capital Notes 4 will be issued on the basis of this Prospectus after that date.

Neither ASIC nor ASX Limited ("ASX") take any responsibility for the contents of this Prospectus or the Offer.

Offer

The Offer comprises the Reinvestment Offer, the Securityholder Offer, the Broker Firm Offer and the Institutional Offer. The Reinvestment Offer provides eligible holders of NAB Capital Notes issued by NAB on 23 March 2015 ("NCN") with the opportunity to reinvest the proceeds of the sale of their NCN ("NCN Resale Proceeds") into NAB Capital Notes 4 and maintain an ongoing investment in securities issued by NAB.

Exposure Period

Under the Corporations Act, NAB was prohibited from processing Applications in the seven day period after 17 February 2020, being the date on which the Original Prospectus was lodged with ASIC.

That period is referred to as the Exposure Period. The purpose of the Exposure Period was to enable the Prospectus to be examined by market participants before the raising of funds. Applications received during the Exposure Period were not processed during the Exposure Period. No preference will be conferred on Applications received during the Exposure Period.

Key risks

Investment products such as NAB Capital Notes 4 are subject to risks which could affect their performance, including a risk that the Distribution Rate decreases over the life of the NAB Capital Notes 4 and a risk of fluctuation in the market price of the NAB Capital Notes 4. These risks could result in the loss of all or some of your investment and any associated income. NAB does not warrant or guarantee the future performance of NAB or the investment performance of NAB Capital Notes 4 (including the market price).

NAB must immediately Convert all or, in some cases, some NAB Capital Notes 4 into Ordinary Shares if a Loss Absorption Event occurs. A Loss Absorption Event may occur where NAB encounters severe financial difficulty. In the event of a Conversion following a Loss Absorption Event, depending on the market price of Ordinary Shares at the relevant time, Holders are likely to receive Ordinary Shares that are worth significantly less than $101 (based on a Face Value of $100 and a 1% discount) for each NAB Capital Note 4 they hold and may lose a significant amount of the money they invested in NAB Capital Notes 4 as a consequence. Following Conversion, there is no certainty as

to the future value of the Ordinary Shares. If NAB Capital Notes 4 are not Converted at that time they will be Written Off and you will lose your money. A Conversion or Write Off following a Loss Absorption Event is not subject to any conditions and you will not be given any choice if a Loss Absorption Event occurs.

Information about the key risks of investing in NAB Capital Notes 4 is detailed in Section 1.3 "Key Risks of NAB Capital Notes 4" and in Section 7 "Key Risks of NAB Capital Notes 4".

ASX quotation

NAB has applied for NAB Capital Notes 4 to be quoted on ASX.

Financial information and forward looking statements

Section 6 sets out financial information in relation to NAB and the basis of

preparation of that information. All financial amounts contained in this Prospectus are expressed in Australian dollars and rounded to the nearest million unless otherwise stated. Any discrepancies between totals and sums of components in tables contained in this Prospectus are due to rounding.

This Prospectus contains statements that are, or may be deemed to be, forward looking statements. These forward looking statements may be identified by the use of forward looking terminology, including the terms "may", "could", "believe", "estimate", "expect", "target", "intend", "plan", "project", "anticipate", "likely", "will" or "should", or, in each case, their negative or other variations or similar expressions. They may also be identified by discussions of strategy, plans, objectives, targets, goals, future events or intentions. Indications of, and guidance on, future earnings and financial position and performance are also forward looking statements. You are cautioned not

to place any undue reliance on any forward looking statements.

Any forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, which may cause actual results, circumstances or outcomes to differ materially from the results, circumstances or outcomes expressed, implied or anticipated in these forward looking statements. There can be

no assurance that actual outcomes will not differ materially from these forward looking statements. Forward looking statements should be read in conjunction with the risk factors set out in Section 7, and other information in this Prospectus.

No representations other than in this Prospectus

No person is authorised to provide any information or to make any representation in connection with the Offer that is not contained in this Prospectus. Any information or representation not contained in this Prospectus must not be relied upon as having been authorised by NAB.

2| NAB Capital Notes 4

None of the Joint Lead Managers, Co- Managers or the Registrar has made any statement that is included in this Prospectus or any statement on which a statement made in this Prospectus is based. Each of those parties expressly disclaims all liability in respect of, makes no representations regarding, and takes no responsibility for, any statements in, or omissions from, this Prospectus.

Unless otherwise indicated, all information in this Prospectus, while subject to change from time to time, is current as at the date of this Prospectus.

Defined words and expressions

Some words and expressions used in this Prospectus have defined meanings. These words and expressions are capitalised and are defined in Appendix B "Glossary", or if not there, in Appendix A "Terms of NAB Capital Notes 4".

If there is any inconsistency between the description of the terms of NAB Capital Notes 4 in this Prospectus and in the Terms, the Terms prevail.

A reference to $ or cents in this Prospectus is a reference to Australian currency. Unless otherwise specified, a reference to time in this Prospectus is a reference to Melbourne time.

Diagrams

The diagrams used in this Prospectus are illustrative only. They may not necessarily be shown to scale. The diagrams are based on information which is current as at the date shown.

Obtaining a Prospectus and Application Form

Paper copies of this Prospectus and an Application Form can be obtained free of charge during the Offer Period by calling the NAB Information Line on 1300 367 647(within Australia) or on +61 3 9415 4299(outside Australia) (Monday to Friday 8.00am

7.30pm). This Prospectus and an Application Form can also be obtained electronically fromnab.com.au/ ncn4offer

Electronic access to the

Prospectus

The following conditions apply if this Prospectus is accessed electronically:

you must download the entire Prospectus;
your Application will only be considered where you have applied on an Application Form that was attached to or accompanied by a copy of the Prospectus; and
you may only access and download or print the Prospectus in Australia.

Restrictions on foreign jurisdictions

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

In particular, NAB Capital Notes 4 have not been and will not be registered under the U.S. Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or resold

in the United States or to, or for the account or benefit of, any U.S. person unless the NAB Capital Notes 4 are registered under the U.S. Securities Act or an exemption from the registration requirements of the U.S. Securities Act is available. Neither this Prospectus nor any Application Form or other materials relating to the Offer may be distributed in the United States or to any U.S. Persons.

Any offer, sale or resale of the NAB Capital Notes 4 within the United

States by any dealer (whether or not participating in the Offer) may violate the registration requirements of the U.S. Securities Act if made within

40 days after the Closing Date or if purchased by a dealer in the Offer.

Collecting your personal information

If you apply for NAB Capital Notes 4, NAB (or the Registrar as NAB's agent) will collect and hold your personal information. See Section 9.11 "Personal information" on how NAB (as well as its subsidiaries and third party suppliers) collect, use and disclose your personal information.

Arranger activities

The Arranger and its affiliates are involved in a wide range of financial services and businesses including some or all of securities trading and brokerage activities and providing commercial and investment banking, investment management, corporate finance, credit and derivative, trading, and research products and services, out of which conflicting interests or duties may arise. In the ordinary course of these activities, the Arranger and affiliates may at any time hold long

or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of customers, in debt, equity or hybrid securities or senior loans or financial products of any member of the Group or any third party involved in the Offer, and may finance the acquisition of those securities and/or financial products and take or enforce security over those securities and/or financial products. The Arranger and its affiliates may receive fees for, or profits and other financial benefits from, those activities.

NAB Capital Notes 4 | 3

GUIDANCE FOR RETAIL INVESTORS

1. Read this Prospectus in full

If you are considering applying for NAB Capital Notes 4 under the Offer, this Prospectus is important and should be read in its entirety.

You should have particular regard to the:

"Investment overview" in Section 1 and "About NAB Capital Notes 4" in Section 2;
"About the Reinvestment Offer" in Section 3 (if you are an Eligible NCN Holder);
"Key Risks of NAB Capital Notes 4" in Section 7; and
"Terms of NAB Capital Notes 4" in Appendix A.
In considering whether to apply for any NAB Capital Notes 4, it is important to consider all risks and other information regarding an investment in NAB Capital Notes 4 in light of your particular investment objectives and circumstances, as the information in this Prospectus does not take into account those objectives and circumstances.
NAB Capital Notes 4 are not deposit liabilities of NAB, are not Protected Accounts or any other accounts with NAB and are not insured or guaranteed by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction, by any member of the Group or by any other party. An investment in NAB Capital Notes 4 is riskier than a bank deposit.
NAB Capital Notes 4 are complex and may not be suitable for all investors. The overall complexity of NAB Capital Notes 4 may make them difficult to understand and the risks associated with them could result in the loss of all or some of your investment and associated income. If you do not fully understand how NAB Capital Notes 4 work or the risks associated with them, you should obtain professional advice.

NAB Capital Notes 4 are issued by NAB under the NAB Capital Notes 4 Deed Poll and Terms and Holders have no claim on NAB except as provided in those Terms.

2. Speak to your professional adviser

If you do not fully understand how NAB Capital Notes 4 work or the risks associated with them, you should seek professional advice from your stockbroker, solicitor, accountant or other independent and qualified professional adviser about the Offer.

ASIC has published guidance on how to choose a professional adviser on its MoneySmart website, moneysmart.gov.au

3. Consider the ASIC guidance for retail investors

ASIC has published guidance which may be relevant to your consideration of whether to invest in NAB Capital Notes 4 - namely, information for retail investors who are considering investing in bank hybrid securities. You can find this guidance by searching "hybrid securities" on ASIC's MoneySmart website at moneysmart.gov.auThe guidance includes a series of questions you should ask before you invest in bank hybrid securities, as well as a short quiz to check your understanding of how hybrids work, their features and risks.

4. Learn more about investing in bank hybrid securities

NAB has also developed a web- based Hybrid Securities Education Guide ("Guide") to help investors understand some of the typical features and risks associated with an investment in bank hybrid securities. It is available at nab.com.au/hybrideducation

The Guide may be helpful when you are considering an investment in bank hybrid securities, such as NAB Capital Notes 4.

However, the Guide is not specific to NAB Capital Notes 4, and reading the Guide is not a substitute for reading this Prospectus.

5. Obtain further information about NAB and NAB Capital Notes 4

NAB is a disclosing entity for the purposes of the Corporations Act and, as a result, is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules. NAB must notify ASX immediately (subject to certain exceptions) if it becomes aware

of information about NAB that a reasonable person would expect to have a material effect on the price or value of its securities, including NAB Capital Notes 4.

Copies of documents lodged with ASIC can be obtained from, or inspected at, an ASIC office and NAB's ASX announcements may be viewed on asx.com.au(ASX code 'NAB'). Further information about NAB, including NAB's half-yearly and annual financial reports, presentations and other investor information, can be obtained from nab.com.au/shareholder

6. Questions about the Offer

If you have any questions in relation to NAB Capital Notes 4 or the Offer, you should seek advice from your financial adviser or other professional adviser. You can also call the NAB Capital Notes 4 Information Line on

1300 367 647 (within Australia) or

+61 3 9415 4299 (outside Australia) (Monday to Friday 8.00am - 7.30pm) (with an Interactive Voice Response Facility also available 24 hours a day, 7 days a week), during the Offer Period and for a week following.

4| NAB Capital Notes 4

KEY DATES

Key dates for the Offer

Record date for determining Eligible Securityholders (7.00pm)	12 February 2020
Announcement of the Offer and lodgement of the Original Prospectus with ASIC	17 February 2020
Bookbuild	17-24 February 2020
Announcement of Margin	24 February 2020
Opening Date and lodgement of this Prospectus with ASIC	25 February 2020
Closing Date (5.00pm)	17 March 2020
Issue Date of NAB Capital Notes 4	23 March 2020
Commencement of trading of NAB Capital Notes 4 on a normal settlement basis	24 March 2020
Despatch of NAB Capital Notes 4 Holding Statements complete	27 March 2020

Key dates for NAB Capital Notes 4

Record Date for first Distribution	9 June 2020
First Distribution Payment Date1	17 June 2020
Optional Conversion / Redemption / Resale Date2	17 September 2027
Mandatory Conversion Date3	17 September 2029

Key dates for the Reinvestment Offer

Record date for determining Eligible NCN Holders (7.00pm)	12 February 2020
(NCN must also be held on the Closing Date)

Opening Date	25 February 2020
Closing Date (5.00pm)	17 March 2020
Transfer of NCN to NCN Nominated Purchaser	23 March 2020
Issue Date of NAB Capital Notes 4	23 March 2020
Payment date for final NCN distribution4	23 March 2020
Commencement of trading of NAB Capital Notes 4 on a normal settlement basis	24 March 2020
Despatch of NAB Capital Notes 4 Holding Statements complete	27 March 2020

Subject to the Directors resolving to pay the Distribution and no Payment Condition existing on 17 June 2020.
With APRA's prior written approval, NAB may elect to Convert, Redeem or Resell NAB Capital Notes 4 on 17 September 2027. Holders should not expect that APRA's approval will be given for any optional Conversion, Redemption or Resale. This date assumes the Issue Date is 23 March 2020.
NAB Capital Notes 4 will Convert into Ordinary Shares on 17 September 2029 (subject to the Mandatory Conversion Conditions being satisfied and only if, prior to that date, NAB Capital Notes 4 have not been Converted, Redeemed or Resold with APRA's prior written approval, or Written Off). This date assumes the Issue Date is 23 March 2020.
Subject to the satisfaction of the payment conditions in the NCN Terms.

NAB Capital Notes 4 | 5

KEY DATES

Key dates for the NCN Holders not participating in the Reinvestment Offer

Last day of trading in NCN	11 March 2020
Ex-date for the final NCN distribution	12 March 2020
Record date for the final NCN distribution (7.00pm)	13 March 2020
Payment date for the final NCN distribution5	23 March 2020
Transfer of NCN to NCN Nominated Purchaser	23 March 2020
Payment date for NCN resold to NCN Nominated Purchaser	23 March 2020

These dates are indicative only and may change (other than the dates that have passed, and the date for the transfer of NCN to the NCN Nominated Purchaser, which is fixed, unless NCN are required to be converted or written off before that date). NAB and the Joint Lead Managers may, in their absolute discretion, close the Offer early or extend the Offer Period without notice. NAB may also withdraw the Offer at any time before NAB Capital Notes 4 are issued. Accordingly, if you wish to apply for any NAB Capital Notes 4 you are encouraged to do so as soon as possible.

Except as otherwise specified in the Terms, if any of these dates are not Business Days and an event under the Terms is stipulated to occur on that day, then the event will occur on the next Business Day.

5Subject to the satisfaction of the payment conditions in the NCN Terms.

6| NAB Capital Notes 4

CONTENTS

Important Notices	2
Guidance for Retail Investors	4
Key Dates	5
Section One:Investment Overview	8
Section Two:About NAB Capital Notes 4	21
Section Three:About the Reinvestment Offer	54
Section Four:Applying for NAB Capital Notes 4	61
Section Five:Overview of NAB	66
Section Six:Financial Information	68
Section Seven:Key Risks of NAB Capital Notes 4	76
Section Eight:Australian Taxation Summary	98
Section Nine:Other Information	105
Appendix A:Terms of NAB Capital Notes 4	112
Appendix B: Glossary	139
Corporate Directory	155

NAB Capital Notes 4 | 7

SECTION ONE

INVESTMENT OVERVIEW

This section provides a summary of the key features and risks of NAB Capital Notes 4 and the Offer.

NAB Capital Notes 4 are complex and may not be suitable for all investors. They are not guaranteed or secured, are not Protected Accounts and are not deposit liabilities for the purposes of the Banking Act. The overall complexity of NAB Capital Notes 4 may make them difficult to understand and the risks associated with them could result in the loss of all or some of your investment and associated income. You should read this Prospectus in full before deciding to apply for NAB Capital Notes 4. If you do not fully understand how NAB Capital Notes 4 work or the risks associated with them, you should obtain professional advice.

A table comparing the features of NAB Capital Notes 4 and other investments in NAB (including Ordinary Shares) is set out in section 2.10.

8| NAB Capital Notes 4

SECTION ONE:

INVESTMENT OVERVIEW

1.1 Key features of the Offer and NAB Capital Notes 4

Topic	Summary	Further
		information

Issuer	National Australia Bank Limited ("NAB")	Section 5
	The Group is a financial services organisation with more than 34,000 people,
	operating through a network of almost 900 locations, serving approximately nine
	million customers and with over 577,000 shareholders.
	The majority of the Group's financial services businesses operate in Australia and
	New Zealand, with branches currently located in Asia, the United Kingdom ("UK")
	and the United States ("US").
Offer Size	$1,950 million, with the ability to raise more or less.
Use of proceeds	The net proceeds of the Offer will be used for general corporate purposes.
	The Australian Prudential Regulation Authority ("APRA") has provided
	confirmation that NAB Capital Notes 4, once issued, will qualify as Additional
	Tier 1 Capital for the purposes of NAB's regulatory capital requirements.
Type of security	Convertible notes.
Face Value	$100 per NAB Capital Note 4.
Distributions	NAB Capital Notes 4 are scheduled to pay quarterly, floating rate Distributions	Section 2.1
	in cash. The returns payable on NAB Capital Notes 4 are called "distributions"
	(whereas for Ordinary Shares, these returns are called "dividends").
	The Distribution Rate is calculated in accordance with the following formula:
	Distribution Rate = (Bank Bill Rate + Margin) x (1 - Tax Rate)

where:

Margin is 2.95%, as determined under the Bookbuild. The Margin will not change for the term of the NAB Capital Notes 4.
Tax Rate is the Australian corporate tax rate applicable to the franking account of NAB on the relevant Distribution Payment Date.
Bank Bill Rate is a benchmark interest rate for the Australian money market. It is based on an average of rates at which major Australian financial institutions lendshort-term cash to each other over a period of approximately 90 days as published by ASX (or its successor). It changes to reflect supply and demand in the cash and currency markets. The Bank Bill Rate for each Distribution Period is set on the first Business Day of the relevant Distribution Period. Fall-back procedures apply under the Terms if the Bank Bill Rate does not appear, if there is an obvious error in that rate or (subject to APRA's prior written approval) if that rate is otherwise subject to disruption.

It is possible for the Bank Bill Rate to be negative. If this occurs, the negative amount will be taken into account in calculating the Distribution Rate (but there is no obligation on Holders to pay NAB if the Distribution Rate becomes negative).

NAB Capital Notes 4 | 9

SECTION ONE:

INVESTMENT OVERVIEW

Topic	Summary	Further
		information

Distributions	A Distribution will be paid only if:	Section 2.1
	• The Directors resolve to pay it; and
	• A Payment Condition does not exist on the Distribution Payment Date. Broadly, a
	Payment Condition exists where NAB is prevented from paying the Distribution by
	prudential regulatory requirements, applicable law or insolvency (see Section 2.1).
	This means a Distribution may not be paid.
	The Distribution Payment Dates are scheduled to be 17 March, 17 June,
	17 September and 17 December.
	The first Distribution is expected to be paid on 17 June 2020. Distributions paid on
	NAB Capital Notes 4 are expected to be franked at the same rate as dividends paid
	on Ordinary Shares.
	However, Holders should be aware that franking is not guaranteed and that their
	ability to use franking credits will depend on their individual circumstances and
	applicable Australian tax laws. Under existing law, there is a rule that may deny
	franking benefits to investors where an issuer is entitled to foreign income tax
	deductions in respect of a security such as the NAB Capital Notes 4. There is a risk
	that this rule could apply in respect of Distributions to Holders. The Government is
	aware of this issue and has released Exposure Draft legislation which, if enacted,
	would apply retrospectively and allow NAB to take steps to ensure that this rule
	would not apply to Distributions. In addition, the ATO has released guidance
	confirming that the ATO is not planning to take any action in respect of investors'
	compliance with the current law at this time. However, NAB can give no assurance
	that the amending legislation will be passed. The terms of NAB Capital Notes 4 do
	not provide for any increase in Distributions or other compensation if Holders are
	denied the benefit of franking credits on their Distributions. Holders should refer
	to the Australian Taxation Summary in Section 8 and seek professional advice in
	relation to their tax position.
	The extent to which Distributions will be franked will depend on a number of
	factors, including the Group's capital management plan and the level of profits
	generated by the Group that will be subject to tax in Australia. The effect of
	Distributions being franked is to reduce the Distribution Rate, and therefore, the
	cash amount received by Holders on each Distribution Payment Date by an amount
	equal to the relevant level of franking. If any Distribution payment is not fully
	franked, then the Distribution will be adjusted to reflect the applicable franking rate,
	resulting in an increase in the cash amount received by Holders on that Distribution
	Payment Date. See Section 2.1 for worked examples.
	Distributions are non-cumulative, which means that unpaid Distributions do not add
	up or accumulate. Holders will not have any right to compensation if NAB does not
	pay Distributions. Failure to pay a Distribution when scheduled will not constitute
	an event of default.
	If a Distribution is not paid in full on a Distribution Payment Date, subject to certain
	exceptions, NAB cannot declare, determine to pay, or pay dividends on its Ordinary
	Shares, or buy-back or reduce capital on any of its Ordinary Shares, until the next
	Distribution Payment Date. However, if the Distribution is paid in full within 3
	Business Days of the Distribution Payment Date, this restriction will no longer apply.

10| NAB Capital Notes 4

Topic	Summary	Further
		information

Term	Perpetual. However, there are certain events that could occur while NAB Capital	Sections
	Notes 4 are on issue which may result in NAB Capital Notes 4 being Converted	2.2 - 2.7
	into Ordinary Shares, Redeemed or Resold for cash, or Written Off.
	The following diagram and table summarise these events.
	NAB Capital Notes 4 do not have a fixed maturity date for repayment and Holders
	do not have a right to request or require NAB to Convert, Redeem or Resell NAB
	Capital Notes 4. It is possible that NAB Capital Notes 4 could remain on issue
	indefinitely and the Face Value will not be repaid.

1.2 Events that may occur while NAB Capital Notes 4 are on issue

The diagram and table below summarise certain events that may occur while NAB Capital Notes 4 are on issue, and what Holders may receive if those events occur.

Figure 1: Timeline of events that may occur while NAB Capital Notes 4 are on issue

		Optional
Issue Date		Conversion/		Mandatory
	Redemption/		Conversion Date

		Resale Date

Potentially perpetual

23 March 202017 September 202717 September 2029

Approximately 7.5 Years	2 Years

If NAB chooses, and

certain conditions are met, NAB Capital Notes 4 will be Converted, Redeemed or Resold on this date.

If the Mandatory Conversion

Conditions are met,

NAB Capital Notes 4 will be Converted on this date. If the Mandatory Conversion Conditions are not met, NAB Capital Notes 4

will Convert on the next

Distribution Payment Date on which those conditions are met.

If the Mandatory Conversion Conditions are never satisfied, there is a risk that NAB Capital Notes 4 may never Convert and the NAB Capital Notes 4 could

remain on issue indefinitely.

There are certain other events that could occur at any time while NAB Capital Notes 4 are on issue which may result in NAB Capital Notes 4 being Converted, Redeemed, Resold or Written Off.

NAB Capital Notes 4 | 11

SECTION ONE:

INVESTMENT OVERVIEW

Table 1: Summary of events that may occur while NAB Capital Notes 4 are on issue

What can	When?	NAB	Is APRA	Do	What value will a	In what form	Further
happen?		Capital	approval	conditions	Holder receive for	will that value	information
		Notes 4	required?1	apply?	each NAB Capital	be provided
		impacted?			Note 4?	to Holders?

Mandatory	On 17 September	All	No	Yes	Approximately	Variable	Section 2.3
Conversion	2029 or the next				$1013, 4	number of
	Distribution					Ordinary
	Payment Date after					Shares
	that date on which
	the Mandatory
	Conversion
	Conditions are
	satisfied2
Optional	On 17 September	All or	Yes	Yes	Approximately	Variable	Section 2.4
Conversion	20272	some			$1013, 4	number of
						Ordinary
						Shares
Optional	On 17 September	All or	Yes	Yes	$100 (Face Value)	Cash	Section 2.5
Redemption	20272	some
or Resale
Conversion	If a Tax Event,	All or	Yes	Yes	Approximately	Variable	Sections
in other	Regulatory Event	some			$1013, 4, 5	number of	2.4, 2.6
circumstances	or Potential					Ordinary	and 2.7
	Acquisition Event					Shares
	occurs
	If an Acquisition	All	No	Yes	Approximately	Variable
	Event occurs				$1013, 4, 5	number of
						Ordinary
						Shares
	If a Loss	Potentially	No	No	A Loss Absorption	Variable
	Absorption Event	all6			Event may occur	number of
	occurs				where NAB	Ordinary
					encounters severe	Shares
					financial difficulty.	If, for any
					Depending on the
					reason,
					market price of
					NAB Capital
					Ordinary Shares,
					Notes 4 are
					Holders are
					not Converted
					likely to receive
					into Ordinary
					significantly
					Shares within
					less than $101
					the required
					and may lose a
					time, NAB
					significant amount
					of the money they	Capital Notes 4
					will be Written
					invested in NAB
					Off7
					Capital Notes 4 as

					a consequence

12| NAB Capital Notes 4

What can	When?	NAB	Is APRA	Do	What value will a	In what form	Further
happen?		Capital	approval	conditions	Holder receive for	will that value	information
		Notes 4	required?1	apply?	each NAB Capital	be provided
		impacted?			Note 4?	to Holders?

Redemption/	If a Tax Event or	All or	Yes	Yes	$100 (Face Value)5	Cash	Section 2.5
Resale	Regulatory Event	some
in other	occurs
circumstances

Ranking	In a winding up of NAB, NAB Capital Notes 4 rank ahead of Ordinary Shares, equally amongst themselves,
	equally with Equal Ranking Instruments and junior to Senior Creditors (including depositors and holders of
	Tier 2 Capital Instruments), as shown in Table 2. However, the amount of any return in a winding up will be
	adversely affected if a Loss Absorption Event has occurred.

Holders should not expect that APRA approval will be given.
To be eligible as Additional Tier 1 Capital, NAB cannot have the right to Redeem or Resell NAB Capital Notes 4 earlier than the fifth anniversary of the Issue Date or later than two years before the first scheduled Mandatory Conversion Date (other than for certain tax or regulatory reasons).
The Conversion conditions are designed to ensure that on a Conversion (other than following a Loss Absorption Event) Holders receive approximately $101 worth of Ordinary Shares for each NAB Capital Note 4 they hold, and that the Ordinary Shares they receive following Conversion are capable of being sold on the ASX. However, the Ordinary Shares received on Conversion may be worth more or less than $101. The number of Ordinary Shares that Holders will receive will not be greater than the Maximum Conversion Number.
Based on a Face Value of $100 and a 1% discount.
If a Conversion (other than on account of a Loss Absorption Event), Redemption or Resale occurs on a day that is not a scheduled Distribution Payment Date, Holders of NAB Capital Notes 4 which are being Converted, Redeemed or Resold will also receive a Distribution in respect of these NAB Capital Notes 4 for the period from (and including) the immediately preceding Distribution Payment Date to (but not including) the date on which the Conversion, Redemption or Resale occurs (provided the conditions to payment are met, including the Directors resolving to pay the Distribution).
The number of NAB Capital Notes 4 Converted will depend on how much Common Equity Tier 1 Capital NAB needs. However, where a Loss Absorption Event occurs on account of aNon-Viability Trigger Event and a public sector injection of funds is required, NAB must convert all NAB Capital Notes 4. See Section 2.7 for further information.
If a NAB Capital Note 4 is Written Off, all rights (including to Distributions) in respect of that NAB Capital Note 4 will be terminated, and the Holder will not have their capital repaid.

NAB Capital Notes 4 | 13

SECTION ONE:

INVESTMENT OVERVIEW

Table 2: Illustration of ranking on winding up

Higher ranking		Examples	Examples of existing NAB obligations and securities8

Senior	Liabilities preferred by	Liabilities in Australia in relation to Protected Accounts

	ranking	law and secured debt	(generally, savings accounts and term deposits) and
	obligations		other liabilities mandatorily preferred by law including
			employee entitlements, liabilities to secured creditors
			and in respect of covered bonds
		Unsubordinated	Bonds and notes, trade and general creditors
		unsecured debt

Term subordinated unsecured debt issued before 1 January 2013

Subordinated unsecured debt obligations issued before 1 January 2013

		Term subordinated	Relevant Tier 2 Capital Instruments
		unsecured debt
		issued after 1 January
		2013 and perpetual
		subordinated
		unsecured debt

	Equal	Preference shares and	NAB Capital Notes 4,9and any securities expressed to
	ranking	other equally ranked	rank equally with NAB Capital Notes 4, which include:
	obligations	instruments	• NCN

			• NAB Capital Notes 2
			• NAB Capital Notes 3
			• NAB Convertible Preference Shares II
			• The preference shares comprised in the National
			Income Securities

	Lower	Ordinary shares	Ordinary Shares
	ranking
Lower ranking	obligations

This is a very simplified capital structure of NAB and does not include every type of security or other obligation issued by NAB. NAB has the right to issue further debt, deposits or other obligations (including the incurring or guaranteeing by it of any indebtedness) or securities of any kind at any time. NAB Capital Notes 4 do not limit the amount of senior debt, deposits or other obligations or securities that may be incurred or issued by NAB at any time.
If a NAB Capital Note 4 is Converted, the Ordinary Shares a Holder receives on Conversion will rank equally with other Ordinary Shares in a winding up of NAB. If a Write Off of a NAB Capital Note 4 occurs following a Loss Absorption Event, the rights of Holders to distributions and returns of capital in respect of that NAB Capital Note 4 will be terminated, the NAB Capital Note 4 will not be Converted, Redeemed or Resold on any subsequent date and the Holder will not have their capital repaid. If NAB Capital Notes 4 are Written Off, Holders will likely be worse off than holders of NAB Convertible Preference Shares II and Ordinary Shares, as further described in Sections 2.8 and 7.1.15.

14| NAB Capital Notes 4

1.3 Key risks of NAB Capital Notes 4

You should read Section 7 "Key Risks of NAB Capital Notes 4" in full before deciding to invest. The key risks outlined in that section include risks associated with an investment in NAB Capital Notes 4 and an investment in NAB. Some of these risks are summarised below.

1.3.1 Key risks associated with an investment in NAB Capital Notes 4

Topic	Summary	Further
		information

NAB Capital	NAB Capital Notes 4 do not constitute Protected Accounts or deposit liabilities	Section 7.1.1
Notes 4 are	for the purposes of the Banking Act or any other accounts with NAB and are not
not deposit	guaranteed or insured by any person.
liabilities or
Protected
Accounts
Distributions	There is a risk that Distributions will not be paid, including where the Directors	Section 7.1.2
may not be paid	do not resolve to pay a Distribution or where a Payment Condition exists on the
	Distribution Payment Date.
	As Distributions are non-cumulative, if a Distribution is not paid then NAB has
	no liability to pay that Distribution and Holders have no claim or entitlement in
	respect of such non-payment. Failure to pay a Distribution when scheduled will
	not constitute an event of default.
The Distribution	The Distribution Rate may go up or down. There is a risk that the return on	Section 7.1.3
Rate may go up	NAB Capital Notes 4 may become less attractive compared to returns on other
or down	investments.
Market price	The market price of NAB Capital Notes 4 may go up or down and there is no	Section 7.1.4
of NAB Capital	guarantee NAB Capital Notes 4 will trade at or above their Face Value. The price
Notes 4	at which NAB Capital Notes 4 trade may, for example, be affected by how the
	Distribution Rate of NAB Capital Notes 4 compares to that of other comparable
	instruments.
Liquidity of NAB	The liquidity of NAB Capital Notes 4 may be low, which means that, at certain	Section 7.1.5
Capital Notes 4	times, you may be unable to sell your NAB Capital Notes 4 at an acceptable price,
	if at all.
Liquidity	Where NAB Capital Notes 4 are Converted, the market for Ordinary Shares may be	Sections
and price of	less liquid than that for comparable securities issued by other entities at the time	7.1.4, 7.1.5,
Ordinary Shares	of Conversion, or there may be no liquid market at that time.	7.1.6 and
	The market price of Ordinary Shares may go up or down due to various factors,	7.1.9

	including investor perceptions, domestic and worldwide economic conditions,
	NAB's financial performance and position and transactions affecting the share
	capital of NAB. As a result, the value of any Ordinary Shares received by Holders
	upon Conversion may be greater than or less than anticipated when they are
	issued or thereafter.
	The market price of Ordinary Shares is also relevant to determining whether or
	not Conversion will occur (except for Conversions on account of a Loss Absorption
	Event) and the number of Ordinary Shares you will receive.
	See page 17 under the heading "Conversion or Write Off following Loss
	Absorption Event" and Section 7 for further information on the Conversion or
	Write Off of NAB Capital Notes4 following a Loss Absorption Event.

NAB Capital Notes 4 | 15

SECTION ONE:

INVESTMENT OVERVIEW

Topic	Summary	Further
		information

Use of franking	Distributions paid on NAB Capital Notes 4 are expected to be franked at the same	Section 7.1.8
credits	rate as dividends paid on the Ordinary Shares. The effect of Distributions being
	franked is to reduce the cash amount received by Holders on each Distribution
	Payment Date by an amount equal to the relevant level of franking.
	If any Distribution payment is not fully franked, then the Distribution will be
	adjusted to reflect the applicable franking rate (see clause 2.5 of the Terms).
	Holders should be aware that franking is not guaranteed and that their ability to
	use franking credits will depend on their individual circumstances and applicable
	Australian tax laws. The extent to which Distributions will be franked will depend
	on a number of factors, including the Group's capital management plan and the
	level of profits generated by the Group that will be subject to tax in Australia.
	Under existing law, there is a rule that may deny franking benefits to investors
	where an issuer is entitled to foreign income tax deductions in respect of a
	security such as NAB Capital Notes 4. There is a risk that this rule could apply in
	respect of Distributions to Holders. The Government is aware of this issue and has
	released Exposure Draft legislation which, if enacted, would apply retrospectively
	and allow NAB to take steps to ensure that this rule would not apply to
	Distributions. In addition, the ATO has released guidance confirming that the ATO
	is not planning to take any action in respect of investors' compliance with the
	current law at this time. However, NAB can give no assurance that the amending
	legislation will be passed. The terms of NAB Capital Notes 4 do not provide for
	any increase in Distributions or other compensation if Holders are denied the
	benefit of franking credits on their Distributions.
	Holders should refer to the Australian Taxation Summary in Section 8 and seek
	professional advice in relation to their tax position.
NAB Capital	NAB Capital Notes 4 have no fixed maturity date but will Convert into Ordinary	Section 7.1.9
Notes 4 are	Shares on 17 September 2029 if they are still on issue on that date and if the
perpetual	Mandatory Conversion Conditions are satisfied. If these conditions are not met on
and may not	17 September 2029 and the NAB Capital Notes 4 remain on issue, Conversion will
Convert	occur on the next Distribution Payment Date on which they are satisfied.
	If the Mandatory Conversion Conditions are never satisfied, there is a risk that
	NAB Capital Notes 4 may never Convert.

Holders have no right to request repayment

NAB has certain early Conversion, Redemption and Resale rights

Holders have no right to request that their NAB Capital Notes 4 be repaid. Absent	Section
a Conversion, Redemption or Resale, in order to realise their investment, Holders	7.1.11
would have to sell their NAB Capital Notes 4 on the ASX at the prevailing market
price. That price may be less than the Face Value, and there may be no liquid
market in NAB Capital Notes 4 (see Sections 7.1.4 and 7.1.5).
Subject to the prior written approval of APRA and certain conditions being met,	Sections
NAB has the right to:	7.1.11 -

• Convert, Redeem or Resell NAB Capital Notes 4 on 17 September 2027, or	7.1.12

because of a Tax Event or a Regulatory Event; and
• Convert NAB Capital Notes 4 because of a Potential Acquisition Event.
Holders should not expect that APRA's approval will be given for any Conversion,
Redemption or Resale of NAB Capital Notes 4.

16| NAB Capital Notes 4

Topic	Summary	Further
		information

Conversion	If Conversion occurs following a Loss Absorption Event, depending on the market	Section
or Write Off	price of Ordinary Shares at that time Holders are likely to receive significantly	7.1.14
following Loss	less than $101 worth of Ordinary Shares per NAB Capital Note 4 and may lose
Absorption	a significant amount of the money they invested in NAB Capital Notes 4 as a
Event	consequence. In cases where NAB Capital Notes 4 are not Converted for any
	reason within 5 days after the Loss Absorption Event Conversion Date, NAB
	Capital Notes 4 will be Written Off with effect on and from the Loss Absorption
	Event Conversion Date.
	If NAB Capital Notes 4 are Written Off following a Loss Absorption Event:
	• The rights of Holders in relation to those NAB Capital Notes 4 will be
	terminated;
	• Those NAB Capital Notes 4 will not be Converted, Redeemed or Resold on any
	subsequent date; and
	• Holders will not have their capital repaid or receive any further Distributions in
	relation to those NAB Capital Notes 4.

Ranking in a	In a winding up of NAB, NAB Capital Notes 4 rank ahead of Ordinary Shares,	Sections
winding up of	equally with all Equal Ranking Instruments, but behind the claims of all Senior	7.1.14 and
NAB	Creditors (including depositors and holders of Tier 2 Capital Instruments).	7.1.15
	On a winding up of NAB, there is a risk that Holders may lose some or all of the
	money they have invested in NAB Capital Notes 4. See also the above and Section
	7.1.14 in relation to the consequences of a Write Off. If NAB Capital Notes 4 are
	Written Off, Holders will not have their capital repaid and will not be entitled to
	any return in a winding up.

NAB may	There is no limit on the amount of senior debt, deposits or other obligations or	Section
issue further	securities (whether ranking equally with, or in priority or junior to NAB Capital	7.1.16
securities or	Notes 4) that may be incurred or issued by NAB at any time or the incurring or
incur other	guaranteeing by NAB of any indebtedness, which may affect Holders' ability to be
indebtedness	repaid on a winding up of NAB.

1.3.2 Key risks associated with an investment in NAB

See Section 7.2 for a description of the risks associated with an investment in NAB and the Group.

NAB Capital Notes 4 | 17

SECTION ONE:

INVESTMENT OVERVIEW

1.4 Information about the Offer

Topic	Summary	Further
		information

Offer Structure	The Offer comprises:	Section 4
	• The Securityholder Offer;
	• The Institutional Offer;
	• The Broker Firm Offer; and
	• The Reinvestment Offer.
	Information about the different offers and how to apply is provided below and in
	Section 4 "Applying for NAB Capital Notes 4".
	If you are a current holder of NCN applying under the Reinvestment Offer, you
	must also read Section 3 "About the Reinvestment Offer".

Reinvestment	On 17 February 2020, NAB issued a resale notice in accordance with the NCN	Section 3
Offer	Terms. That notice confirms that on 23 March 2020 the NCN Nominated Purchaser
	will mandatorily purchase all NCN for $100 per NCN ("NCN Resale Proceeds").
	The Reinvestment Offer provides Eligible NCN Holders with the opportunity to
	reinvest their NCN Resale Proceeds into NAB Capital Notes 4 and maintain an
	ongoing investment in securities issued by NAB.
	You are an Eligible NCN Holder if you:
	• were registered as a holder of NCN at 7.00pm on 12 February 2020;
	• are shown on the NCN register as having an address in Australia;
	• are not an individual residing in a member state of the European Union; and
	• are not in the United States or acting as a nominee for, or for the account
	or benefit of, a U.S. Person, not otherwise prevented from receiving the
	Reinvestment Offer or NAB Capital Notes 4 under the laws of any jurisdiction.
	The options available to Eligible NCN Holders are detailed in Section 3 "About the
	Reinvestment Offer".
	Before submitting an Application under the Reinvestment Offer, Eligible NCN
	Holders should read Section 3.2 which describes the differences between NCN
	and NAB Capital Notes 4. In particular, Eligible NCN Holders should note that the
	margin applicable to NCN is 3.50%, and the Margin for NAB Capital Notes 4 is
	2.95%, as determined under the Bookbuild.

How to Apply	• To apply for NAB Capital Notes 4, you must complete an Application Form and	Sections 3
under the Offer	follow the instructions in Section 4 "Applying for NAB Capital Notes 4".	and 4
	• If you are applying under the Reinvestment Offer, you must also read Section 3
	"About the Reinvestment Offer".

18| NAB Capital Notes 4

Topic

Minimum

Application under the Offer

Key Dates for the Offer

Allocation policy

Summary	Further
	information
Securityholder Offer, Broker Firm Offer (excluding Applications to reinvest NCN	Sections 3
Resale Proceeds) and Institutional Offer	and 4
50 NAB Capital Notes 4 ($5,000) and thereafter in multiples of 10 NAB Capital
Notes 4 ($1,000).
Reinvestment Offer
There is no minimum number of NCN that you must hold to be able to participate
in the Reinvestment Offer.
If you are an Eligible NCN Holder and own less than 50 NCN, you can still apply
to participate in the Reinvestment Offer but you must apply to reinvest the NCN
Resale Proceeds relating to ALL of your NCN.
If you are an Eligible NCN Holder and you own 50 or more NCN, you must apply
to reinvest the NCN Resale Proceeds relating to at least 50 of your NCN and
thereafter in multiples of 10 NCN.
Offer Period:	Key Dates
• The Offer opened on 25 February 2020; and
• The Offer is expected to close at 5.00pm on 17 March 2020.
Issue Date:NAB Capital Notes 4 are expected to be issued on 23 March 2020.
Commencement of trading on ASX:Trading is expected to commence on
24 March 2020 on a normal settlement basis.
Despatch of Holding Statements:Holding Statements are expected to be
despatched from 27 March 2020.
Reinvestment Offer and Securityholder Offer	Section 4

Allocations to NCN Reinvestment Applicants and Securityholder Applicants will be determined by NAB in consultation with the Joint Lead Managers.
Applications from NCN Reinvestment Applicants and Securityholder Applicants may be scaled back if there is excess demand for the Offer. In the event
of excess demand, NAB's current intention is to give preference to NCN Reinvestment Applicants over Securityholder Applicants while still providing for a proportion of the available NAB Capital Notes 4 to be allocated to Securityholder Applicants. How NAB scales back applications will depend on the extent of applications from NCN Reinvestment Applicants and Securityholder Applicants.
In the event of excess demand, it is possible that the proportionate scale back applied to Securityholder Applicants will be greater than that applied to NCN Reinvestment Applicants.

Broker Firm Offer and Institutional Offer

Allocations to Syndicate Brokers were determined by NAB in consultation with the Joint Lead Managers following completion of the Bookbuild.
Allocations to Institutional Investors were determined by NAB following completion of the Bookbuild.
Allocations to Syndicate Brokers and Institutional Investors reflected expected demand under the Reinvestment Offer.
Priority will be given to Broker Firm Applicants applying to reinvest their NCN Resale Proceeds over other Broker Firm Applicants. It is possible for Applications from Broker Firm Applicants to be scaled back by a Syndicate Broker. NAB takes no responsibility for any allocation, scale back or rejection that is decided by a Syndicate Broker.

NAB Capital Notes 4 | 19

SECTION ONE:

INVESTMENT OVERVIEW

Topic	Summary	Further
		information

Tax	Information about the Australian tax consequences of investing in NAB Capital	Section 8
consequences	Notes 4 is set out in Section 8.

Fees and	NAB has incurred certain fees and expenses in connection with the Offer and the	Section 9
expenses	Prospectus which are described in Section 9. These include payments to the Joint
associated with	Lead Managers and Co-Managers.
the Offer

More	If you do not fully understand how NAB Capital Notes 4 work or the risks
information	associated with them, you should seek advice from your financial adviser or other
	professional adviser.
	You can also call the NAB Information Line on 1300 367 647(within Australia)
	or on +61 3 9415 4299(outside Australia) (Monday to Friday 8.00am - 7.30pm)
	during the Offer Period, and for a week following.

20| NAB Capital Notes 4

SECTION TWO

ABOUT

NAB CAPITAL NOTES 4

The following is an overview of the key terms of NAB Capital Notes 4. It is important that you read this Prospectus and the Terms in full before deciding to invest in NAB Capital Notes 4. If you do not fully understand how NAB Capital Notes 4 work or the risks associated with them, you should seek advice from your financial adviser or other professional adviser.

The full Terms are contained in Appendix A. Rights and liabilities attaching to NAB Capital Notes 4 may also arise under the Corporations Act, ASX Listing Rules and other applicable laws.

A table comparing the features of NAB Capital Notes 4 and other investments in NAB (including Ordinary Shares) is set out in Section 2.10.

NAB Capital Notes 4 | 21

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

2.1 Distributions

NAB Capital Notes 4 are expected to pay quarterly floating rate Distributions in cash, which are expected to be franked at the same rate as dividends paid on Ordinary Shares. The effect of Distributions being franked is to reduce the cash amount received by Holders on each Distribution Payment Date by an amount equal to the relevant level of franking.1A Distribution will be paid provided the Directors decide to pay it, and provided a Payment Condition does not exist on the Distribution Payment Date. A Payment Condition exists where NAB is prevented from paying the Distribution by prudential regulatory requirements, applicable law or insolvency.

The Distribution Rate is a floating rate (i.e. it may go up or down), and is equal to the sum of the Bank Bill Rate plus the Margin (as determined under the Bookbuild), adjusted for NAB's tax rate.

Distributions are non-cumulative.

1Under existing law, there is a risk that a rule may deny Holders of NAB Capital Notes 4 franking benefits in respect of Distributions. The Government is aware of this issue and has released Exposure Draft legislation which, if enacted, would apply retrospectively and allow NAB to take steps to ensure that this rule would not apply to Distributions. For further information, see Section 8.

Topic	Summary	Further
		information

Distribution	The Distribution Rate for each Distribution will be calculated using the following	Clause 2.4 of
Rate	formula:	the Terms
	Distribution Rate = (Bank Bill Rate + Margin) x (1 - Tax Rate)

where:

Bank Bill Rate is a benchmark interest rate for the Australian money market. It is based on an average of rates at which major Australian financial institutions lendshort-term cash to each other over a period of approximately 90 days as published by ASX (or its successor). It changes to reflect supply and demand in the cash and currency markets. The Bank Bill Rate for each Distribution Period is set on the first Business Day of the relevant Distribution Period. Fall-back procedures apply under the Terms if the Bank Bill Rate does not appear, if there is an obvious error in that rate or (subject to APRA's prior written approval) if that rate is otherwise subject to disruption;
It is possible for the Bank Bill Rate to be negative. If this occurs, the negative amount will be taken into account in calculating the Distribution Rate (but there is no obligation on Holders to pay NAB if the rate becomes negative);
Margin is 2.95%, as determined under the Bookbuild. The Margin will not change for the term of the NAB Capital Notes 4; and
Tax Rate is the Australian corporate tax rate applicable to the franking account of NAB on the relevant Distribution Payment Date.

Below are two worked examples of the Distribution Rate calculated using:

a Bank Bill Rate of 0.7500% (i.e. if the Bank Bill Rate is positive); and
a Bank Bill Rate of-1.0000% (i.e. if the Bank Bill Rate is negative).

These examples are for illustrative purposes only and do not indicate, guarantee or forecast the actual Bank Bill Rate for the first or any subsequent Distribution Period.

22| NAB Capital Notes 4

Topic	Summary	Further
		information

Using a Bank Bill Rate of 0.7500% (i.e. a positive Bank Bill Rate)

For example, if the Bank Bill Rate was 0.7500% and the Australian corporate tax rate applicable to the franking account of NAB was 30%, assuming the Distribution is fully franked the Distribution Rate for that Distribution Period would be calculated as follows:

Bank Bill Rate	0.7500% per annum
plus Margin	2.9500% per annum
	3.7000% per annum
Multiplied by (1 - Tax Rate)	x 0.70
Distribution Rate =	2.5900% per annum

Using a Bank Bill Rate of -1.0000% (i.e. a negative Bank Bill Rate)

For example, if the Bank Bill Rate was -1.0000% and the Australian corporate tax rate applicable to the franking account of NAB was 30%, assuming the Distribution is fully franked the Distribution Rate for that Distribution Period would be calculated as follows:

Bank Bill Rate	- 1.0000% per annum
plus Margin		2.9500% per annum
		1.9500% per annum
Multiplied by (1 - Tax Rate)		x 0.70
Distribution Rate =		1.3650% per annum

Holders are not required to pay Distributions to NAB in any circumstances (even if the Distribution Rate is a negative number).

The graph on the following page illustrates the movement in the Bank Bill Rate. The rate on 12 February 2020 was 0.9167%. The Australian corporate tax rate may change from time to time and that will affect the Distribution Rate.

NAB Capital Notes 4 | 23

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Movement in the Bank Bill Rate


				Year

Topic	Summary				Further
						information

Calculation of	Distributions scheduled to be paid on a Distribution Payment Date will be	Clause 2.4 of
Distribution	calculated using the following formula:		the Terms

Distribution Rate x A$100 x N

365

where:

Nis the number of days in the Distribution Period.

Using the above formula, if the Distribution Rate was 2.5900% per annum, then the Distribution on each NAB Capital Note 4 for the first Distribution Period (if the Distribution Period was 86 days) would be calculated as follows:

Indicative Distribution Rate	2.5900% per annum
Multiplied by the Face Value	X $100
Multiplied by the number of days
in the Distribution Period	X 86
Divided by 365	/ 365
Indicative cash Distribution payment for the first
Distribution Period for each NAB Capital Note 4	$0.6102

Distributions paid on NAB Capital Notes 4 are expected to be franked at the same rate as dividends paid on Ordinary Shares, and accordingly Holders are expected to receive franking credits in respect of any Distribution. However, Holders should be aware that franking is not guaranteed and that their ability to use franking credits will depend on their individual circumstances and applicable Australian tax laws. The extent to which Distributions will be franked will depend on a number of factors, including the Group's capital management plan and the level of profits generated by the Group that will be subject to tax in Australia. The effect of Distributions being franked is to reduce the cash amount received by Holders on each Distribution Payment Date by an amount equal to the relevant level of franking. If any Distribution payment is not fully franked, then the Distribution will be adjusted to reflect the applicable franking rate.

24| NAB Capital Notes 4

TopicSummary

Further information

Distribution Payment Dates

Franking credits

The example on the left is for illustrative purposes only and does not indicate, guarantee or forecast the actual Distribution payment for the first or any subsequent Distribution Period. Actual Distribution payments may be higher or lower than this example. The Distribution Rate for the first Distribution Period will be set on the Issue Date and will include the Margin.

The Distribution Payment Dates are scheduled to be:

17 March;
17 June;
17 September; and
17 December,

commencing on 17 June 2020 until the date that NAB Capital Notes 4 are Converted or Redeemed.

In addition, if Conversion, Redemption or Resale occurs on a day that is not a scheduled Distribution Payment Date, provided the conditions to payment are met, Holders of NAB Capital Notes 4 which are being Converted (other than in the case of a Loss Absorption Event), Redeemed or Resold will also receive a Distribution in respect of these NAB Capital Notes 4 for the period from the immediately preceding Distribution Payment Date to the date on which the Conversion, Redemption or Resale occurs.

If a Distribution Payment Date is a day which is not a Business Day, then the Distribution Payment Date is the next Business Day.

Distributions paid on NAB Capital Notes 4 are expected to be franked at the same rate as dividends paid on Ordinary Shares. The effect of Distributions being franked is to reduce the cash amount received by Holders on each Distribution Payment Date by an amount equal to the relevant level of franking.

If any Distribution payment is not fully franked, then the Distribution will be adjusted to reflect the applicable franking rate (see clause 2.5 of the Terms).

Holders should be aware that franking is not guaranteed and that their ability to use franking credits will depend on their individual circumstances and applicable Australian tax laws. The extent to which Distributions will be franked will depend on a number of factors, including the Group's capital management plan and the level of profits generated by the Group that will be subject to tax in Australia.

Under existing law, there is a rule that may deny franking benefits to investors where an issuer is entitled to foreign income tax deductions in respect of a security such as NAB Capital Notes 4. There is a risk that this rule could apply in respect of Distributions to Holders. The Government is aware of this issue and has released Exposure Draft legislation which, if enacted, would apply retrospectively and allow NAB to take steps to ensure that this rule would not apply to Distributions. In addition, the ATO has released guidance confirming that the ATO is not planning to take any action in respect of investors' compliance with the current law at this time. However, NAB can give no assurance that the amending legislation will be passed. The terms of NAB Capital Notes 4 do not provide for any increase in Distributions or other compensation if Holders are denied the benefit of franking credits on their Distributions.

Holders should refer to the Australian Taxation Summary in Section 8 and seek professional advice in relation to their tax position.

Clause 2.4 of the Terms

Clause 2.2 of the Terms

Clause 2.5 of the Terms

NAB Capital Notes 4 | 25

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

TopicSummary

Further information

Restrictions on Distributions

Restrictions on Ordinary Shares if Distributions are not paid

A Distribution on NAB Capital Notes 4 will only be paid if:

The Directors resolve to pay it; and
A Payment Condition does not exist on the Distribution Payment Date.

A "Payment Condition" will exist where:

The payment of the Distribution will result in NAB or the Group not complying with APRA's then current Prudential Capital Requirements;
Unless APRA otherwise approves in writing, payment of the Distribution would result in NAB or the Group exceeding any limit on distributions of earnings applicable under (and calculated in accordance with) APRA's then current capital conservation requirements as they are applied to NAB or the Group (as the case may be) at the time;4
APRA otherwise objects to the payment of the Distribution;
Payment of the Distribution would result in NAB becoming, or being likely to become, insolvent for the purposes of the Corporations Act; or
NAB is not permitted to pay the Distribution under the Corporations Act.

Distributions are non-cumulative. Failure to pay a Distribution when scheduled will not constitute an event of default. If a Distribution is not paid then NAB has no liability to pay that Distribution and Holders have no claim or entitlement in respect of such non-payment.

If for any reason a Distribution has not been paid in full on a Distribution Payment Date, NAB must not, subject to certain exceptions, unless approved by an Ordinary Resolution, until and including the next Distribution Payment Date:

Declare, determine to pay or pay a dividend on Ordinary Shares; or
Buy-backor reduce capital on Ordinary Shares.

However, if the Distribution is paid in full within 3 Business Days of the Distribution Payment Date, this restriction will no longer apply. This restriction on dividend payments where Distributions on NAB Capital Notes 4 are not paid only applies in respect of Ordinary Shares and not distributions in respect of any other securities, including those ranking equally with, or senior to, NAB Capital Notes 4.

The restriction in NAB Capital Notes 4 does not apply if the Holders approve otherwise by Ordinary Resolution. Further, the restriction only applies until the next Distribution Payment Date and is subject to certain exceptions. The dates for dividends or other distributions with respect to Ordinary Shares are determined by NAB in its discretion and do not bear a fixed relationship to the Distribution Payment Dates for NAB Capital Notes 4. Accordingly, as soon as the restriction ceases to apply (as will be the case if the next scheduled Distribution on NAB Capital Notes 4 is paid in full) NAB will not be restricted from paying a dividend or other distributions on its Ordinary Shares.

Clause 2.6 of the Terms

Clause 2.7 of the Terms

Clauses 2.8 and 2.9 of the Terms

4See Section 6.3.1 for a description of APRA's current rules requiring suspension of payments in respect of Additional Tier 1 Capital instrument (such as NAB Capital Notes 4).

26| NAB Capital Notes 4

2.2 Term

Topic	Summary	Further
		information

Term	NAB Capital Notes 4 do not have a fixed maturity date and if they are not	Sections
	Converted, Written Off, Redeemed or Resold in accordance with the Terms, they	2.3 - 2.7
	could remain on issue indefinitely. Accordingly they are perpetual securities.
	There can be no certainty that NAB Capital Notes 4 will be Converted, Redeemed	Clause 12.2
	or Resold under the Terms. Holders will have no right to request NAB to	of the Terms
	Convert, Redeem or Resell NAB Capital Notes 4. Conditions apply to any optional
	Conversion, Redemption, Resale or purchase of NAB Capital Notes 4, including a
	requirement for the prior written approval of APRA. Holders should not expect
	that APRA's approval for any optional Conversion, Redemption, Resale, or
	purchase, will be given. Information on the circumstances in which NAB Capital
	Notes 4 may be Converted, Redeemed, Resold or Written Off is set out in Sections
	2.3 to 2.7.

2.3 Mandatory Conversion

NAB must convert all (but not some) outstanding NAB Capital Notes 4 into Ordinary Shares on 17 September 2029, provided that certain conditions are met. These conditions may never be satisfied and accordingly NAB Capital Notes 4 may never Convert into Ordinary Shares. The number of Ordinary Shares that Holders will receive on a Mandatory Conversion will not be greater than the Maximum Conversion Number.

The conditions to Mandatory Conversion and the associated Conversion calculations are designed to ensure that Holders receive approximately $101 worth of Ordinary Shares for each NAB Capital Note 4 they hold, and that the Ordinary Shares they receive following the Conversion are capable of being sold on the ASX.

Topic	Summary	Further
		information

Mandatory	Outstanding NAB Capital Notes 4 are scheduled to be mandatorily Converted on	Clause 3.2 of
Conversion	17 September 2029, provided the Mandatory Conversion Conditions are satisfied	the Terms
Date	on that date.
	If any of the Mandatory Conversion Conditions are not satisfied on this date, NAB
	Capital Notes 4 will continue to be on issue and the Mandatory Conversion Date
	will be deferred to the next Distribution Payment Date on which those conditions
	are satisfied.

NAB Capital Notes 4 | 27

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary
Mandatory	If the Mandatory Conversion Conditions are satisfied on the Mandatory
Conversion and	Conversion Date, outstanding NAB Capital Notes 4 will be Converted and Holders
consequences	will receive Ordinary Shares.
	Upon Conversion on a Mandatory Conversion Date, based on a Face Value of
	$100 and with a 1% discount, Holders will receive approximately $101 worth of
	Ordinary Shares per NAB Capital Note 4. The number of Ordinary Shares that
	Holders will receive will be based on the volume weighted average price of
	Ordinary Shares ("VWAP") during a period of 20 Business Days on which trading
	in Ordinary Shares took place before the Mandatory Conversion Date, but will not
	be greater than the Maximum Conversion Number.
	As the VWAP is an average price, it may differ from the Ordinary Share price on
	or after the Mandatory Conversion Date. This means that the value of Ordinary
	Shares received may be more or less than $101 when they are issued or at any
	time after that.
	Following a Conversion of Holders will become holders of Ordinary Shares, which
	will rank equally with existing Ordinary Shares from the date of issue and which
	may be sold on the ASX at the prevailing market price (provided that trading in
	Ordinary Shares on the ASX has not been suspended at the relevant time).

Further information

Clause 3.1 of the Terms

Clause 7.1 of the Terms

Mandatory

Conversion

Conditions

There are three Mandatory Conversion Conditions, each of which must be satisfied for Mandatory Conversion to occur.

The First Mandatory Conversion Condition and the Second Mandatory Conversion Condition are intended to provide protection to Holders against receiving less than approximately $101 worth of Ordinary Shares per NAB Capital Note 4 on Conversion (based on the VWAP during the 20 Business Days before the Mandatory Conversion Date).

The percentages used in the First Mandatory Conversion Condition and the Second Mandatory Conversion Condition (see below) are derived from market precedents and the cap on the number of ordinary shares that is permitted to be issued under applicable prudential rules and ratings agency guidance. Worked examples follow.

The Third Mandatory Conversion Condition is intended to provide protection for Holders by making Conversion conditional on Holders receiving Ordinary Shares which are capable of being sold on ASX.

The Mandatory Conversion Conditions are as follows:

First Mandatory Conversion Condition:the VWAP of Ordinary Shares on the 25th Business Day immediately preceding (but not including) a possible Mandatory Conversion Date must be greater than 56% of the Issue Date VWAP;
Second Mandatory Conversion Condition:the VWAP of Ordinary Shares during the period of 20 Business Days on which trading in Ordinary Shares took place immediately preceding (but not including) a possible Mandatory Conversion Date is greater than 50.51% of the Issue Date VWAP; and
Third Mandatory Conversion Condition:no Delisting Event applies to Ordinary Shares in respect of a possible Mandatory Conversion Date. Broadly, a Delisting Event occurs when NAB is delisted, its Ordinary Shares have been suspended from trading for a certain period, or an Inability Event subsists preventing NAB from Converting NAB Capital Notes 4 generally (i.e. where NAB is prevented by applicable law or order of any court or action of any government authority or any other reason from Converting NAB Capital Notes 4).

Clause 3.3 of the Terms

28| NAB Capital Notes 4

Topic	Summary	Further
		information

Satisfaction of Mandatory Conversion Conditions

By way of example, if the Issue Date VWAP is $25.00, for the First Mandatory Conversion Condition to be satisfied the relevant VWAP would need to be greater than $14.00, and for the Second Mandatory Conversion Condition to be satisfied the relevant VWAP would need to be greater than $12.63. The Third Mandatory Conversion Condition will be satisfied where the Ordinary Shares are able to be traded on the ASX at the relevant time and no Inability Event subsists.

The following diagram illustrates the timeframes that are relevant for the Mandatory Conversion Conditions, using the date of 17 September 2029 as a potential Mandatory Conversion Date. These dates are indicative only and may change.

13 August 2029	20 August 2029 - 14 September 2029	17 September 2029
25thBusiness Day	Period from the 20thBusiness Day before	Potential Mandatory
before a potential	the potential Mandatory Conversion Date to	Conversion Date (subject to
Mandatory Conversion	the last Business Day immediately preceding	satisfaction of Mandatory
Date	(but not including) the potential Mandatory	Conversion Conditions)
	Conversion Date

20 Business Day VWAP Period

First Mandatory	Second Mandatory	Third Mandatory
Conversion Condition	Conversion Condition	Conversion Condition
The VWAP of Ordinary Shares	The VWAP of Ordinary Shares during the	Ordinary Shares have not been
on the 25th Business Day	period of 20 Business Days on which trading	delisted or suspended from
immediately preceding (but	in Ordinary Shares took place immediately	trading on ASX and there must
not including) the potential	preceding (but not including) the potential	be no Inability Event subsisting
Mandatory Conversion Date	Mandatory Conversion Date must be greater
must be greater than 56% of	than 50.51% of the Issue Date VWAP
the Issue Date VWAP

NAB Capital Notes 4 | 29

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary
Conversion	On a Mandatory Conversion Date, a Holder will receive a number of Ordinary
Number	Shares per NAB Capital Note 4 ("Conversion Number") which is the lesser of:

(a) the number (N) calculated in accordance with the following formula:

Further information

Clauses

7.1 - 7.7 of the Terms

N =

where:

$100

99% x VWAP

"VWAP" broadly is the volume weighted average price of Ordinary Shares during the VWAP Period. For a Mandatory Conversion, the VWAP Period is the 20 Business Days on which trading in Ordinary Shares took place immediately preceding (but not including) the Mandatory Conversion Date.

and:

the Maximum Conversion Number ("MCN") calculated in accordance with the following formula:

$100

MCN=Issue Date VWAP x Relevant Fraction

where:

"Issue Date VWAP" is the VWAP during the 20 Business Day period on which trading in Ordinary Shares took place immediately preceding (but not including) the date on which NAB Capital Notes 4 were issued; and
"Relevant Fraction", for Conversion on a Mandatory Conversion Date, is
0.5. This fraction reflects the ratings agency requirement that the maximum number of Ordinary Shares issued on a Conversion of this kind does not exceed the number that would be issued if the Ordinary Share price fell from the price it was at the Issue Date to 50% of that price.

Adjustments to Issue Date VWAP and Maximum Conversion Number

The Issue Date VWAP, and consequently the Maximum Conversion Number, will be adjusted to reflect a consolidation, division or reclassification of Ordinary Shares and pro rata bonus issues as set out in the Terms (but not other transactions, including rights issues, which may affect the capital of NAB).

No adjustment shall be made to the Issue Date VWAP where such adjustment (rounded if applicable) would be less than one per cent of the Issue Date VWAP then in effect.

30| NAB Capital Notes 4

Topic

Number of Ordinary Shares Holders will receive on Mandatory Conversion Date - worked example

Summary

Worked example: Scheduled Mandatory Conversion Date

Assume the VWAP from 20 August 2029 to 14 September 2029 (being the 20 Business Days on which trading in Ordinary Shares took place immediately preceding 17 September 2029) is $22.00 and the Issue Date VWAP is $25.00. Holders would be entitled to receive the Conversion Number of Ordinary Shares which is the lesser of:

	$100
N =		= 4.5914 Ordinary Shares per NAB Capital Note 4;
99% x $22.00

and:	$100

the MCN =		= 8.0000 Ordinary Shares per NAB Capital Note 4.
$25.00 x 0.5

Since N is less than the MCN (see above), the total number of Ordinary Shares to which a Holder of 100 NAB Capital Notes 4 would be entitled would be 459

(i.e. 100 x 4.5914, which number is rounded down to disregard the fraction of the Ordinary Share). Assuming a prevailing market price equal to the VWAP of $22.00, this would represent a market value of $10,098 (i.e. 459 x $22.00) which is slightly more than $10,000 (the Face Value of 100 NAB Capital Notes 4).

This example is for illustrative purposes only. The figures in it are not forward looking statements and do not indicate, guarantee or forecast the Issue Date VWAP or future VWAP or other price of Ordinary Shares.

Further information

Clause 7.1 of the Terms

NAB Capital Notes 4 | 31

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

2.4 Optional Conversion

On 17 September 2027, NAB may elect to Convert NAB Capital Notes 4 into Ordinary Shares with APRA's prior written approval. NAB may also elect to Convert NAB Capital Notes 4 into Ordinary Shares following the occurrence of certain events (related to tax, regulation and takeovers), subject to APRA's prior written approval.

As with a Mandatory Conversion, there are conditions to an optional Conversion which are designed to ensure that Holders receive approximately $101 worth of Ordinary Shares for each NAB Capital Note 4 they hold, and that Holders receive Ordinary Shares that are capable of being sold on ASX.

The number of Ordinary Shares that Holders will receive on a Conversion in these circumstances will not be greater than the Maximum Conversion Number.

The conditions to an optional Conversion may never be satisfied and accordingly, NAB Capital Notes 4 may never Convert into Ordinary Shares. Holders should not expect that APRA's approval will be given for any optional Conversion.

Topic	Summary	Further
		information

Optional	NAB may, with APRA's prior written approval, elect to Convert:	Clauses 6.1
Conversion	• All or some NAB Capital Notes 4 on 17 September 2027;	and 12.1 of
	• All or some NAB Capital Notes 4 following the occurrence of a Tax Event or a	the Terms
	Regulatory Event; or
	• All or some NAB Capital Notes 4 following the occurrence of a Potential
	Acquisition Event.
	An optional Conversion is subject to further conditions as set out below.
	Holders should not expect that APRA's approval will be given for a Conversion of
	NAB Capital Notes 4 in these circumstances.
	Holders do not have a right to request Conversion in any circumstances.

Tax Event	A Tax Event will broadly occur if, on or after the Issue Date, NAB receives legal or	Clause 24.1
	tax advice that as a result of a change in law or regulation, judicial decision or	of the Terms
	administrative position in Australia or a challenge by the Australian Taxation Office
	(which NAB did not expect as at the Issue Date), there is a more than insubstantial
	risk that a Distribution would not be frankable (or would only be frankable subject to
	requirements which the Directors determine to be unacceptable) or that NAB would be
	exposed to an increase in taxes or other costs, which is not insignificant, in relation to
	NAB Capital Notes 4.
	As discussed in Section 8, under existing law there is a rule that may deny franking
	benefits to investors where an issuer is entitled to foreign income tax deductions
	in respect of a security such as NAB Capital Notes 4. There is a risk that this rule
	could apply in respect of Distributions to Holders. The Government is aware of this
	issue and has released Exposure Draft legislation which, if enacted, would apply
	retrospectively and allow NAB to take steps to ensure that this rule would not apply to
	Distributions. A failure to pass this legislation would not trigger a Tax Event under the
	Terms and would not give rise to an Optional Conversion, Optional Redemption or
	Optional Resale.

32| NAB Capital Notes 4

Topic

Summary	Further
	information

Regulatory Event

A Regulatory Event will broadly occur if:

NAB receives legal advice that, as a result of a change of law or regulation, judicial decision, administrative position or statement of APRA on or after the Issue Date, additional requirements (which are not insignificant) would be imposed on NAB in relation to NAB Capital Notes 4 (which were not expected by NAB at the Issue Date) which the Directors determine to be unacceptable; or
The Directors determine that, as a result of a change of law or regulation, judicial decision, administrative position or statement of APRA on or after the Issue Date, NAB is not or will not be entitled to treat some or all NAB Capital Notes 4 as Additional Tier 1 Capital, except where the reason is or will be because of a limit or other restriction on the recognition of Additional Tier 1 Capital which is in effect on the Issue Date or which on the Issue Date is expected by NAB may come into effect.

Clause 24.1 of the Terms

Potential

Acquisition

Event

A Potential Acquisition Event will broadly occur if:

A takeover bid is made to acquire all or some Ordinary Shares, the offer is, or becomes, unconditional and the bidder has a relevant interest in more than 50% of the Ordinary Shares on issue or a majority of Directors recommend acceptance of the offer in the absence of a higher offer; or
A court orders the holding of meetings to approve a scheme of arrangement with respect to NAB which would result in a person having a relevant interest in more than 50% of the Ordinary Shares on issue after the scheme is implemented.

A Potential Acquisition Event will not occur where NAB is acquired by an Approved NOHC. An Approved NOHC is described in Section 2.9.

Clause 24.1 of the Terms

Optional

Conversion

Restrictions

Broadly, in addition to APRA approval, there are two categories of restrictions that may prevent an optional Conversion from occurring:

Restrictions that may prevent NAB from sending a notice to Holders advising them that NAB wishes to Convert NAB Capital Notes 4; and
Restrictions that may prevent NAB from actually Converting NAB Capital Notes 4.

Restrictions that may prevent NAB from sending a conversion notice

NAB may not elect to Convert NAB Capital Notes 4 if on the Non-Conversion Test Date (broadly, the second Business Day before the date on which NAB is to send a notice advising Holders that it wishes to Convert NAB Capital Notes 4):

The VWAP of Ordinary Shares on theNon-Conversion Test Date is less than or equal to 22.50% of the Issue Date VWAP; or
A Delisting Event applies.

Clauses 6.2,

6.4 and 6.5 of the Terms

NAB Capital Notes 4 | 33

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary	Further
		information

	Further restrictions that may prevent NAB from Converting NAB Capital Notes 4
	on a Conversion Date
	In addition, if, on the date on which Conversion is to occur ("Optional Conversion
	Date") either:
	• The Second Mandatory Conversion Condition (applied as if it referred to 20.20%
	of the Issue Date VWAP) would not be satisfied; or
	• A Delisting Event applies,
	then the proposed Conversion must be deferred until the next Distribution
	Payment Date on which the Mandatory Conversion Conditions would be satisfied
	if that Distribution Payment Date were a Mandatory Conversion Date (with those
	conditions applied as if the percentage of the Issue Date VWAP were 22.50% for
	the First Mandatory Conversion Condition and 20.20% for the Second Mandatory
	Conversion Condition).
	The percentages used in the above restrictions are derived from market
	precedents and the cap on the number of Ordinary Shares that is permitted to be
	issued under applicable prudential standards.

Conversion	If an optional Conversion proceeds, the Conversion Number of Ordinary Shares	Clause 7.1 of
Number	will be calculated in the same manner as for a Mandatory Conversion - see	the Terms
	Section 2.3. However, for the purposes of the optional Conversion calculations,
	the Relevant Fraction is 0.2 rather than 0.5, as permitted by applicable prudential
	standards for Additional Tier 1 Capital.

If Conversion	If NAB elects to Convert but cannot Convert NAB Capital Notes 4 on the Optional	Clause 6.5 of
does not occur	Conversion Date because of an applicable Conversion restriction, NAB will notify	the Terms
on Optional	Holders and the Conversion will be deferred until the next Distribution Payment
Conversion	Date on which the Mandatory Conversion Conditions would be satisfied as if
Date	that Distribution Payment Date were a possible Mandatory Conversion Date
	(with those conditions applied as if the percentage of the Issue Date VWAP were
	22.50% for the First Mandatory Conversion Condition and 20.20% for the Second
	Mandatory Conversion Condition), unless NAB Capital Notes 4 are otherwise
	Converted, Written Off, Redeemed or Resold in accordance with the Terms. For
	the purposes of the Conversion calculations in these circumstances, the Relevant
	Fraction is 0.2 rather than 0.5 to comply with applicable prudential requirements
	for Additional Tier 1 Capital.

34| NAB Capital Notes 4

2.5 Optional Redemption, optional Resale or purchase

On 17 September 2027, NAB may elect to Redeem, Resell or purchase NAB Capital Notes 4 with APRA's prior written approval. NAB may also elect to Redeem or Resell NAB Capital Notes 4 following the occurrence of certain events (related to tax and regulation), subject to APRA's prior written approval.

If a Redemption or Resale occurs, a Holder will receive an amount equal to the Face Value ($100) in cash for each NAB Capital Note 4 that it holds.

There are restrictions on NAB's ability to Redeem NAB Capital Notes 4 for cash. Most importantly, NAB may only elect to Redeem NAB Capital Notes 4 if APRA is satisfied that NAB's regulatory capital position will remain adequate following the Redemption. This is intended to protect NAB's creditors (including depositors).

Holders should not expect that APRA's approval will be given for any Redemption, Resale or purchase.

Topic

Optional Redemption

Restrictions on Redemption

Optional Resale

Summary

NAB may, with APRA's prior written approval, elect to Redeem:

All or some NAB Capital Notes 4 on 17 September 2027; or
All or some NAB Capital Notes 4 following the occurrence of a Tax Event or a Regulatory Event.

Holders should not expect that APRA's approval will be given for any Redemption of NAB Capital Notes 4 under the Terms. Holders do not have a right to request Redemption in any circumstances.

NAB may only elect to Redeem NAB Capital Notes 4 if APRA is satisfied that either:

The NAB Capital Notes 4 proposed to be Redeemed are replaced concurrently or beforehand with a capital instrument of the same or better quality and the replacement of the instrument is done under conditions that are sustainable for NAB's income capacity; or
The capital position of the NAB Level 1 Group and NAB Level 2 Group will remain adequate after NAB elects to Redeem the NAB Capital Notes 4.

NAB may also, with APRA's prior written approval, elect to Resell:

All or some NAB Capital Notes 4 on 17 September 2027; or
All or some NAB Capital Notes 4 following the occurrence of a Tax Event or a Regulatory Event.

Holders should not expect that APRA's approval will be given for any Resale of NAB Capital Notes 4 under the Terms. Holders do not have a right to request Resale.

In the event of a Resale, each Holder is bound under the Terms to sell NAB Capital Notes 4 to one or more third party purchasers at the Resale Price ($100 per NAB Capital Note 4).

Further information

Clauses 8.1 and 12.1 of the Terms

Clause 8.4 of the Terms

Clauses 10.1,

11.4 and 12.1 of the Terms

NAB Capital Notes 4 | 35

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary	Further
		information

Appointment	If NAB elects to Resell NAB Capital Notes 4, it must appoint one or more third	Clauses 11.2
of Nominated	party purchasers (each a "Nominated Purchaser") to purchase NAB Capital	and 11.3 of
Purchaser	Notes 4 offered for Resale (on such terms as may be agreed between NAB and the	the Terms
	Nominated Purchaser). The terms of appointment may include terms:
	• as to the conditions of any Resale, the procedures for settlement of such Resale
	and the circumstances in which the notice given by NAB to the Registrar, ASX
	and the Holders in connection with such Resale are amended;
	• as to the substitution of another entity as Nominated Purchaser (in accordance
	with the Terms); and
	• on which any NAB Capital Notes 4 acquired by a Nominated Purchaser may be
	Redeemed, Converted or otherwise dealt with.
	To the extent any of the terms on which a Nominated Purchaser is appointed
	causes the NAB Capital Notes 4 to cease to be Additional Tier 1 Capital, then the
	prior written approval of APRA is required before the Nominated Purchaser is
	appointed on those terms.
	If NAB appoints more than one Nominated Purchaser in respect of a Resale,
	all or any NAB Capital Notes 4 held by a Holder which are being Resold may
	be purchased by any one or any combination of the Nominated Purchasers, as
	determined by NAB for the Resale Price.
	The Nominated Purchaser must not be NAB or any Related Entity of NAB.

Failure by	If a Nominated Purchaser does not pay the Resale Price when the Resale Price	Clause 11.6
Nominated	is due, the Resale to that Nominated Purchaser will not occur and Holders	of the Terms
Purchaser to	will continue to hold NAB Capital Notes 4 in accordance with the Terms until
pay Resale Price	NAB Capital Notes 4 are otherwise Redeemed, Converted or Resold in accordance
	with the Terms.

Purchases	NAB (or any Related Entity of NAB) may at any time purchase NAB Capital Notes 4	Clause 12.3
	in the open market or otherwise, at any price (subject to the prior written	of the Terms
	approval of APRA).

2.6 Conversion following an Acquisition Event

NAB must Convert all (but not some) NAB Capital Notes 4 into Ordinary Shares where NAB is taken over by way of takeover bid or scheme of arrangement which meets certain requirements (which are described below).

As with other types of Conversion, there are conditions to Conversion in these circumstances which are designed to ensure that Holders receive no less than approximately $101 worth of Ordinary Shares for each NAB Capital Note 4 they hold, and that Holders receive Ordinary Shares that are capable of being sold on the ASX.

There is a risk that these conditions may never be satisfied. Accordingly, NAB Capital Notes 4 may never Convert into Ordinary Shares.

36| NAB Capital Notes 4

TopicSummary

Further information

Acquisition Event

In summary, an Acquisition Event means either:

A takeover bid is made to acquire all or some Ordinary Shares and the offer is, or becomes, unconditional, all necessary regulatory approvals have been obtained and either:
- The bidder has a relevant interest in more than 50% of the Ordinary Shares on issue; or
- A majority of Directors recommend acceptance of such offer (in the absence of a higher offer); or
A court orders the holding of meetings to approve a scheme of arrangement under Part 5.1 of the Corporations Act, which when implemented would result in a person having a relevant interest in more than 50% of Ordinary Shares on issue, and:
- All classes of members of NAB pass all resolutions required to approve the scheme by the majorities required under the Corporations Act; and
- All conditions to the implementation of the scheme, including any necessary regulatory approval (other than the approval of the scheme by the court) have been satisfied or waived.

An Acquisition Event will not occur where NAB is acquired by an Approved NOHC. An Approved NOHC is described in Section 2.9.

Clauses 5 and 24.1 of the Terms

Conversion	If an Acquisition Event occurs, NAB must (by giving an Acquisition Conversion
following an	Notice) Convert all (but not some) NAB Capital Notes 4 into a number of Ordinary
Acquisition	Shares with a value of approximately $101 per NAB Capital Note 4 (based on
Event	the VWAP during a period, usually 20 Business Days, before the Acquisition
	Conversion Date but a lesser period if trading in Ordinary Shares in the period
	after the Acquisition Event and before the Acquisition Conversion Date is less
	than 20 Business Days) provided that certain conditions are met. The number of
	Ordinary Shares that Holders will receive on a Conversion will not be greater than
	the Maximum Conversion Number.
	Broadly, there are two categories of restrictions that may prevent a Conversion
	following an Acquisition Event from occurring:
	• Restrictions that may prevent NAB from sending an Acquisition Conversion
	Notice to Holders; and
	• Restrictions that may prevent NAB from actually Converting NAB Capital
	Notes 4.
	Restrictions that may prevent NAB from sending a conversion notice
	NAB is not required to give an Acquisition Conversion Notice to Holders and will
	not be required to Convert NAB Capital Notes 4 if on the Non-Conversion Test
	Date (broadly, the second Business Day before the date on which NAB is to send a
	notice advising Holders that it wishes to Convert NAB Capital Notes 4 as a result of
	an Acquisition Event):
	• The VWAP of Ordinary Shares on the Non-Conversion Test Date is less than or
	equal to 22.50% of the Issue Date VWAP; or
	• A Delisting Event applies.

Clauses 5 and 7 of the Terms

NAB Capital Notes 4 | 37

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary	Further
		information

	Further restrictions that may prevent NAB from Converting NAB Capital Notes 4
	on a Conversion Date
	In addition, NAB may not proceed to Convert NAB Capital Notes 4 if, on the date on
	which Conversion is to occur ("Acquisition Conversion Date") either the Second
	Mandatory Conversion Condition (applied as if it referred to 20.20% of the Issue
	Date VWAP) or a Delisting Event applies in respect of that date.
	The percentages used in the above restrictions are derived from market precedents
	and the cap on the number of Ordinary Shares that is permitted to be issued under
	applicable prudential standards.

Conversion	If Conversion proceeds, the Conversion Number of Ordinary Shares will be	Clause 7.1 of
Number	calculated in the same manner as for a Mandatory Conversion - see Section 2.3.	the Terms
	However, for the purposes of the Conversion calculations in these circumstances
	the Relevant Fraction is 0.2 rather than 0.5, as permitted by applicable prudential
	standards for Additional Tier 1 Capital.

If Conversion	If NAB is not required to give an Acquisition Conversion Notice or the further	Clause 5.4 of
does not occur	restrictions prevent Conversion on the Acquisition Conversion Date, NAB will give	the Terms
on Acquisition	a new Acquisition Conversion Notice on or before the 25th Business Day prior to
Conversion	the immediately succeeding scheduled quarterly Distribution Payment Date, unless
Date	the restrictions to the giving of an Acquisition Conversion Notice also apply at that
	time.
	The new Acquisition Conversion Notice will give notice of a new Acquisition
	Conversion Date. Conversion will not occur on the new Acquisition Conversion
	Date if the further Conversion restrictions apply on that date.
	This process will be repeated until Conversion occurs.

2.7 Conversion following a Loss Absorption Event

NAB Capital Notes 4 have certain loss absorption features, which may be triggered where NAB encounters severe financial difficulty. These features are required to be included in the Terms of NAB Capital Notes 4 for prudential regulation purposes.

The occurrence of a "Loss Absorption Event" requires the Conversion of NAB Capital Notes 4 into Ordinary Shares. A Loss Absorption Event may occur at any time and on any day, whether or not the day is a Business Day. The Mandatory Conversion Conditions do not apply to a Conversion following a Loss Absorption Event. The number of Ordinary Shares that Holders will receive on a Conversion in these circumstances will not be greater than the Maximum Conversion Number.

As a Conversion in these circumstances is likely to occur during a time of financial difficulty for NAB, depending on the market price of Ordinary Shares at the relevant time, Holders are likely to receive significantly less than $101 worth of Ordinary Shares per NAB Capital Note 4 and a Holder may lose a significant amount of the money they invested in NAB Capital Notes 4 as a consequence. The calculations set out in this Section 2.7 are illustrative only and designed to demonstrate the potential number and value of Ordinary Shares that a Holder would receive on a Conversion where there is a Loss Absorption Event.

Where NAB Capital Notes 4 are not Converted into Ordinary Shares for any reason, those NAB Capital Notes 4 will be Written Off. In the event of a Write Off, the rights of Holders to Distributions and returns of capital will be terminated and written off, and Holders will not have their capital repaid.

38| NAB Capital Notes 4

Topic

Loss Absorption Events

Common Equity Trigger Event

Non-Viability Trigger Event

Conversion or Write Off of Relevant Tier 1 Capital Instruments (including NAB Capital Notes 4)

Summary	Further
	information
A Loss Absorption Event is each of:	Clause 4.1 of
• A Common Equity Trigger Event; and	the Terms

• A Non-Viability Trigger Event.
A Common Equity Trigger Event occurs when the ratio of NAB's Common Equity	Clause 4.2 of
Tier 1 Capital to RWA (the "Common Equity Tier 1 Ratio") as determined by NAB	the Terms
or APRA at any time is equal to or less than 5.125%, calculated on the basis of
either or both of the NAB Level 1 Group and the NAB Level 2 Group.
NAB must immediately notify APRA in writing if it makes such a determination.
If a Common Equity Trigger Event occurs, NAB must immediately convert into
Ordinary Shares or write off all Relevant Tier 1 Capital Instruments (which includes
NAB Capital Notes 4) or a proportion of Relevant Tier 1 Capital Instruments with
the result that each of the Common Equity Tier 1 Ratio in respect of the NAB Level
1 Group and the Common Equity Tier 1 Ratio in respect of the NAB Level 2 Group
is at a percentage above 5.125% determined by NAB for that ratio.
A Non-Viability Trigger Event means APRA has provided a written determination	Clause 4.3 of
to NAB that:	the Terms

The conversion into Ordinary Shares or write off of Relevant Tier 1 Capital Instruments (which includes NAB Capital Notes 4) is necessary because without the conversion or write off, APRA considers that NAB would becomenon-viable; or
Without a public sector injection of capital into, or equivalent support with respect to, NAB, APRA considers that NAB would becomenon-viable.

If a Non-Viability Trigger Event occurs, NAB must immediately convert into

Ordinary Shares or write off:

All Relevant Tier 1 Capital Instruments; or
A proportion of Relevant Tier 1 Capital Instruments where APRA is satisfied that conversion or write off of a proportion will be sufficient to ensure that NAB will not become nonviable. However, NAB must convert or write off all Relevant Tier 1 Capital Instruments if a public sector injection of funds is required.

If a Loss Absorption Event were to occur, depending on how much Common	Clauses 4.2,
Equity Tier 1 Capital NAB needs, NAB may be:	4.3 and 4.4
• Permitted by APRA to convert or write off only a proportion of NAB Capital	of the Terms

Notes 4 and other Relevant Tier 1 Capital Instruments; or
• Required to either convert or write off all Relevant Tier 1 Capital Instruments
(including NAB Capital Notes 4). All Relevant Tier 1 Capital Instruments must
be converted or written off where the Loss Absorption Event is a Non-Viability
Trigger Event involving a determination by APRA that a public sector injection
of capital would be required.

NAB Capital Notes 4 | 39

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary	Further
		information

If NAB is permitted to convert or write off only a proportion of NAB Capital

Notes 4 and other Relevant Tier 1 Capital Instruments:

NAB must endeavour to treat Holders on an approximately proportionate basis, but may make adjustments among Holders to take account of the effect on marketable parcels of NAB Capital Notes 4 and other logistical considerations; and
Where the Relevant Tier 1 Capital Instruments are not all in the same currency, NAB may treat them as if converted into a single currency of NAB's choice at such rate of exchange as NAB considers reasonable. NAB may make adjustments among Holders and holders of other Relevant Tier 1 Capital Instruments having regard to the need to effect conversion immediately.

If NAB is required to convert or write off Relevant Tier 1 Capital Instruments, Holders should be aware that all Relevant Tier 1 Capital Instruments (including NAB Capital Notes 4) will be converted or written off before any Relevant Tier2 Capital Instruments are converted or written off. NAB has no obligation to maintain any Relevant Tier 1 Capital Instruments on issue and gives no assurance that it will do so.

Conversion as	• On the date on which a Loss Absorption Event occurs (the "Loss Absorption	Clause 4.4 of
a result of a	Event Conversion Date"), NAB must immediately determine the number of	the Terms
Loss Absorption	NAB Capital Notes 4 that will Convert and the number of other Relevant Tier 1
Event	Capital Instruments which will convert into Ordinary Shares or be written off.
	• On the Loss Absorption Event Conversion Date, the relevant number of NAB
	Capital Notes 4 will then Convert immediately and irrevocably. Holders will not
	receive prior notice of Conversion or have any rights to vote or right of approval
	in respect of any Conversion.
	• The Mandatory Conversion Conditions do not apply and Conversion may occur
	automatically without the need for any further act or step by NAB. In that case,
	NAB will treat a Holder in respect of its NAB Capital Notes 4 as having been
	issued the Conversion Number of Ordinary Shares.
	• NAB expects that any ASX trades in NAB Capital Notes 4 that have not settled
	on the date a Loss Absorption Event occurs will continue to settle in accordance
	with the normal ASX T+2 settlement, although NAB expects the seller will be
	treated as having delivered, and the buyer will be treated as having acquired,
	the Conversion Number of Ordinary Shares into which NAB Capital Notes 4 have
	been Converted as a result of the occurrence of the Loss Absorption Event.
	• NAB may make such decisions with respect to the identity of Holders whose
	NAB Capital Notes 4 will Convert on the Loss Absorption Event Conversion Date
	as may be necessary or desirable to ensure Conversion occurs in an orderly
	manner, including disregarding any transfers of NAB Capital Notes 4 that have
	not been settled or registered at that time.

40| NAB Capital Notes 4

Topic

Number of Ordinary Shares Holders will receive on Loss Absorption Event Conversion Date

Summary	Further
	information
Holders will receive the lesser of the Conversion Number and the Maximum	Clause 7.1 of
Conversion Number.	the Terms
The Conversion Number is calculated in accordance with the same formula as for
a Mandatory Conversion - see Section 2.3, except that:

TheVWAP Periodused to determine the VWAP in this case is the 5 Business Days on which trading in Ordinary Shares took place immediately preceding the Loss Absorption Event Conversion Date; and
TheRelevant Fractionis 0.2rather than 0.5, as permitted by applicable prudential standards for Additional Tier 1 Capital.

The VWAP of Ordinary Shares at the time of a Loss Absorption Event may vary according to the severity of the Loss Absorption Event. This may impact the number and value of Ordinary Shares that will be received by a Holder under a Conversion following a Loss Absorption Event.

In addition, since the Mandatory Conversion Conditions do not apply to a Conversion following a Loss Absorption Event, the Ordinary Shares a Holder may receive on account of such a Conversion are likely to be worth significantly less than $101 per NAB Capital Note 4 and a Holder may lose a significant amount of the money they invested in NAB Capital Notes 4 as a consequence.

On a Conversion following a Loss Absorption Event, Holders will receive the lesser of:

The number (N) calculated according to the following formula:

N =	$100

and	99% x VWAP

The Maximum Conversion Number ("MCN"), calculated in accordance with the following formula:

MCN =	$100

	Issue Date VWAP x Relevant Fraction

NAB Capital Notes 4 | 41

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic

Worked examples of Conversion following Loss Absorption Event

Summary	Further
	information

Below are two worked examples of Conversion following a Loss Absorption Event using:

A VWAP of $1.00 (i.e. in extreme circumstances); and
A VWAP of $10.00 (i.e. in less severe circumstances).

Both examples assume an Issue Date VWAP of $25.00.

Using a VWAP of $1.00

Assume a Loss Absorption Event occurs, and that the VWAP in the VWAP Period is $1.00.

Holders would receive the lesser of: $100

N= 99% x $1.00 = 101.0101 Ordinary Shares per NAB Capital Note 4;

and

$100

the MCN= $25 x 0.2 = 20.0000 Ordinary Shares per NAB Capital Note 4.

Since the MCN is less than N, the total number of Ordinary Shares to which a holder of 100 NAB Capital Notes 4 would be entitled would be the MCN, that is 2,000 (i.e. 100 x 20.0000, rounded down to the nearest whole Ordinary Share).

The market value of the Ordinary Shares received based on the MCN and a prevailing market price equal to the VWAP of $1.00 is $2,000 (i.e. 2,000 x $1.00), which is considerably less than $10,000 (the Face Value of 100 NAB Capital Notes 4). Consequently, Holders would lose a significant amount of the money they invested in NAB Capital Notes 4.

Using a VWAP of $10.00

In this example, assume that the VWAP in the VWAP Period is $10.00.

"N" calculated according to the above formula would be 10.1010 and the MCN would again be 20.0000.

Since N is less than the MCN, the total number of Ordinary Shares to which a holder of 100 NAB Capital Notes 4 would be entitled would be N, that is 1,010 (i.e. 100 x 10.1010 rounded down to the nearest whole Ordinary Share).

The market value of the Ordinary Shares received in this case based on a prevailing market price equal to the VWAP of $10.00 would be $10,100 (i.e. 1,010 x $10.00), which is slightly more than $10,000 (the Face Value of 100 NAB Capital Notes 4).

The above examples are for illustrative purposes only. The figures in it are not forward looking statements and do not indicate, guarantee or forecast the Issue Date VWAP or future VWAP or other price of Ordinary Shares.

42| NAB Capital Notes 4

Topic

Write Off of

NAB Capital Notes 4 where NAB Capital Notes 4 are not Converted on Loss Absorption Event Conversion Date

Summary	Further
	information
If Conversion is required in respect of a NAB Capital Note 4 on account of a Loss	Clause 4.5 of
Absorption Event but has not been effected within 5 days of the Loss Absorption	the Terms
Event Conversion Date for any reason (including where NAB is prevented by
applicable law or court order or for any other reason from Converting NAB Capital
Notes 4 (broadly an "Inability Event")), those NAB Capital Notes 4 will not be
Converted but instead will be Written Off.
Broadly, Written Off means that the relevant Holders' rights (including to
payments of Distributions and Face Value) in relation to a NAB Capital Note 4 are
immediately and irrevocably terminated and written off with effect on and from
the Loss Absorption Event Conversion Date and the NAB Capital Note 4 will not be
Converted, Redeemed or Resold on any subsequent date.
The laws under which an Inability Event may arise include laws relating to the
ability of a person to acquire interests in an Australian corporation or financial
sector entity. The laws and other grounds on which an Inability Event may arise
may change and the change may be adverse to the interests of Holders.

Recent changes to the law have given statutory recognition to conversion and write off provisions in regulatory capital instruments such as NAB Capital Notes4, subject to limited exceptions.

Notice of Loss	NAB must give Holders notice as soon as practicable following the occurrence of a	Clause 4.6 of
Absorption	Loss Absorption Event, stating the Loss Absorption Conversion Date, the number	the Terms
Event and	of NAB Capital Notes 4 Converted or Written Off and the relevant number of
resulting	Relevant Tier 1 Capital Instruments converted into Ordinary Shares or written off.
Conversion or
Write Off

NAB Capital Notes 4 | 43

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

2.8 Quotation, ranking and regulatory treatment

Topic	Summary	Further
		information

Quotation	NAB has applied for NAB Capital Notes 4 to be quoted on ASX and NAB Capital	Clause 1.4 of
	Notes 4 are expected to be quoted under code 'NABPG'.	the Terms

Ranking	NAB Capital Notes 4 are unsecured.
	NAB Capital Notes 4 do not constitute Protected Accounts and are not deposit
	liabilities for the purposes of the Banking Act or any other accounts with NAB
	and are not guaranteed or insured by any government, government agency
	or compensation scheme of the Commonwealth of Australia or any other
	jurisdiction, by any member of the Group or by any other party.
	Ranking in a winding up
	In a winding up of NAB, NAB Capital Notes 4 rank in priority to Ordinary Shares,
	equally amongst themselves and Equal Ranking Instruments, and junior to Senior
	Creditors (which include depositors and holders of Tier 2 Capital Instruments).
	This means that, on a winding up, there is a risk that Holders will lose all or some
	of their investment. If NAB Capital Notes 4 have been Converted into Ordinary
	Shares prior to a winding up of NAB, the Ordinary Shares received on Conversion
	will rank equally with other Ordinary Shares and rank lower than they would have
	had they still remained NAB Capital Notes 4. If NAB Capital Notes 4 are Written
	Off, Holders will not have their capital repaid and will not be entitled to any return
	in a winding up.
	Ranking in relation to Distributions
	In respect of payment of Distributions, NAB Capital Notes 4 rank in priority to
	Ordinary Shares, equally amongst themselves and Equal Ranking Instruments, and
	junior to Senior Creditors (which includes depositors and holders of Tier 2 Capital
	Instruments). However, if NAB Capital Notes 4 have been Converted into Ordinary
	Shares, Holders will cease to be entitled to any Distributions under the Terms and
	any rights to any distributions will be as holders of Ordinary Shares. If NAB Capital
	Notes 4 are Written Off, Holders will not be entitled to any Distributions under
	the Terms or otherwise.

Holders should also understand that on the Issue Date NAB will have on issue Relevant Tier 1 Capital Instruments (such as NAB Convertible Preference Shares

that take the form of convertible preference shares. Due to the requirements of the law at the time of issue of the convertible preference shares, if convertible preference shares are written off, the rights of holders of these securities are not terminated but are instead varied so as to give a holder rights equivalent to the rights in respect of Ordinary Shares it would have received if conversion had occurred. Accordingly, if NAB Capital Notes 4 are Written Off, Holders will have lesser rights and will likely be worse off than holders of convertible preference shares such as NAB Convertible Preference Shares II, even though those securities rank equally with NAB Capital Notes 4.

Clause 16.5 of the Terms

Clause 1.6 of the Terms

Clause 16.2 of the Terms

Clause 16.1 of the Terms

44| NAB Capital Notes 4

Topic	Summary	Further
		information

Regulatory	• APRA classifies the regulatory capital of Authorised Deposit-taking Institutions
capital of ADIs	("ADIs") into two tiers for its supervisory purposes - referred to as Tier 1 Capital
	and Tier 2 Capital. From the perspective of the ADI, Tier 1 Capital generally
	has better loss-absorbing qualities than Tier 2 Capital, due to features such as
	discretionary distributions, lower ranking in a winding up than Tier 2 Capital
	and being subject to conversion and write off in broader circumstances than
	Tier 2 Capital.
	• Under the Basel III Prudential Standards, Tier 1 Capital is comprised of:
	- Common Equity Tier 1 Capital; and
	- Additional Tier 1 Capital.
	• Common Equity Tier 1 Capital is recognised as the highest quality component
	of regulatory capital for ADIs. Common Equity Tier 1 Capital for ADIs (and their
	non-operating holding companies) comprises paid-up ordinary shares, retained
	earnings, other disclosed reserves permitted for inclusion by APRA and certain
	other items permitted by APRA, adjusted for regulatory adjustments applied in
	the calculation of Common Equity Tier 1 Capital.
	• The non-common equity components of Tier 1 Capital which do not satisfy all
	of the criteria for inclusion in Common Equity Tier 1 Capital are referred to as
	Additional Tier 1 Capital. These instruments must be able to absorb losses on
	a going-concern basis, and can include both instruments that are classified as
	equity and instruments that are classified as liabilities for accounting purposes.

Regulatory	• APRA has provided confirmation that NAB Capital Notes 4, once issued, will
treatment of	qualify as Additional Tier 1 Capital for the purposes of NAB's regulatory capital
NAB Capital	requirements.
Notes 4	• NAB Capital Notes 4 and NAB's other regulatory capital help to protect NAB's
	depositors and other creditors by providing a loss absorbing capital buffer
	which supports losses that may be incurred on NAB's assets.
	• Recent changes to the law have given statutory recognition to conversion
	and write off	provisions in regulatory capital instruments such as NAB Capital

Notes 4, subject to limited exceptions.

NAB Capital Notes 4 | 45

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

2.9 Other

Topic

NAB may issue further NAB Capital Notes 4 or other instruments

Summary	Further
	information
NAB has the right to issue additional convertible notes on the same or different	Clause 20 of
terms as NAB Capital Notes 4 offered under this Prospectus.	the Terms
NAB also has the right to issue further debt, deposits or other obligations
(including the incurring or guaranteeing by it of any indebtedness) or securities
of any kind. These debt, deposits or other obligations or securities may have the
same or different terms to NAB Capital Notes 4. For example, they may rank for
payment of face value, interest or other amounts (including on an insolvency of
NAB) equally with, ahead of or behind NAB Capital Notes 4. NAB Capital Notes 4
do not limit the amount of senior debt, deposits or other obligations or securities
that may be incurred or issued by NAB at any time.
Holding NAB Capital Notes 4 does not confer any right to participate in further
issues of securities by NAB.

Voting rights

Amendment of Terms

A NAB Capital Note 4 does not entitle its Holder to vote at a general meeting of NAB.

Ordinary Shares issued on Conversion would have all the usual rights conferred by Ordinary Shares.

NAB may make certain amendments to the Terms and the NAB Capital Notes 4 Deed Poll without the approval of Holders including changes:

of a formal, minor or technical nature;
made to cure any ambiguity or correct any manifest error;
to facilitate the listing, clearing or offering for sale of the NAB Capital Notes 4;
necessary or expedient for the purposes of complying with applicable laws (including the provisions of any statute, requirements of any statutory authority or the listing or quotation requirements of securities exchanges);
necessary or appropriate to effect substitution of an Approved NOHC (as described below);
to dates or time periods stated, required or permitted in connection with any Conversion, Redemption or Resale;
to the Terms to align with the terms of any Relevant Tier 1 Capital Instruments issued after the Issue Date; and
that are not materially prejudicial to the interests of Holders as a whole.

NAB's right to make these changes is subject to NAB complying with all applicable laws, the amendment being, in NAB's opinion, not materially prejudicial to Holders as a whole, and APRA's prior written approval (where required).

NAB may also, with APRA's prior written approval (where required), amend the Terms or the NAB Capital Notes 4 Deed Poll if the amendment has been approved by a Special Resolution. An amendment that will be materially prejudicial to Holders requires approval by Special Resolution.

Clause 17.3 of the Terms

Clause 18.1 of the Terms

Clause 18.2 of the Terms

APRA's prior written approval to amend the Terms or the NAB Capital Notes 4	Clause 18.4
Deed Poll is required only where the amendment may affect the eligibility of NAB	of the Terms
Capital Notes 4 as Additional Tier 1 Capital.

46| NAB Capital Notes 4

Topic	Summary	Further
		information

Notices	While NAB Capital Notes 4 are quoted on ASX, all notices by NAB to Holders may	Clause 21 of
	be given by publication to ASX. The Terms also permit notices to be given by	the Terms
	newspaper advertisement or by post. Notices to NAB and the Registrar may be
	given by post.

Approved	An Approved NOHC is a non-operating holding company within the meaning of	Clauses 19
NOHC	the Banking Act ("NOHC"), which acquires NAB as a result of an event initiated	and 24.1 of
	by the Directors, where the ordinary shares of the NOHC are listed on an	the Terms
	internationally recognised stock exchange and the NOHC undertakes to:
	• convert NAB Capital Notes 4 into ordinary shares in the Approved NOHC
	whenever NAB would otherwise have been required to deliver Ordinary Shares
	and upon the occurrence of an Acquisition Event with respect to the Approved
	NOHC; and
	• use all reasonable endeavours to procure quotation of all ordinary shares in its
	capital issued on Conversion on the securities exchange on which its ordinary
	shares are quoted at that time.
	If a NOHC Event occurs, NAB may amend the Terms with APRA's prior written
	approval (but without the consent of Holders) to enable the substitution of the
	Approved NOHC as the issuer of ordinary shares on Conversion.
	The occurrence of a NOHC Event does not allow NAB to elect to Convert, Redeem
	or Resell NAB Capital Notes 4.
	Holders do not have any right to vote on a NOHC Event. Where a NOHC Event is
	accompanied by a transfer of assets from NAB to the Approved NOHC or another
	subsidiary of the Approved NOHC, NAB may as a result have reduced assets to
	meet the claims of its creditors (including Holders) and Shareholders.
	Following the substitution of an Approved NOHC as issuer of the ordinary shares
	on Conversion but prior to any Conversion, Holders continue to hold a note
	issued by NAB which ranks for payment of distributions and in a winding up of
	NAB as described in Section 2.8 and which is convertible into ordinary shares in
	the Approved NOHC in the same circumstances in which it would have otherwise
	been converted into Ordinary Shares in NAB.
	There is no restriction on an Approved NOHC declaring or paying a dividend
	on, or buying back or reducing capital on its ordinary shares if NAB does not
	pay a Distribution on a NAB Capital Note 4. If NAB does not pay a Distribution,
	NAB would remain subject to the restriction on it declaring or paying dividends
	on Ordinary Shares or buying back or reducing capital on its Ordinary Shares as
	described in Section 2.1.
	NAB expects that the rights attaching to the Approved NOHC shares would be
	substantially equivalent to the rights attaching to Ordinary Shares.

NAB Capital Notes 4 | 47

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary	Further
		information

Payments to	Subject to the Terms, payments will be made to the person shown as the Holder in	Clauses 14.1
bank accounts	the Register at the Relevant Time on the Record Date. In order to receive payment,	to 14.3 of the
	a Holder will need to notify the Registrar by close of business on the Record Date	Terms
	(or in any other manner NAB determines) of an Australian dollar bank account in
	Australia to which payment should be made.
	If the Holder does not so notify the Registrar, or the payment does not complete
	for any reason, NAB will send a notice to the address most recently notified by the
	Holder advising them of the uncompleted payment and the amount will be held
	as a non-interest bearing deposit until such an account is nominated, claims may
	no longer be made in respect of that amount or NAB is entitled or obliged to deal
	with the amount in accordance with the laws relating to unclaimed monies.
Time limit on	Holders should be aware that a claim against NAB for a payment in respect of a	Clause 14.4
claims	NAB Capital Note 4 is void unless made within 5 years from the date on which the	of the Terms
	payment first became due.
Determination	Except where there is fraud or a manifest error, any determination or calculation	Clause 14.5
and calculation	which NAB makes in accordance with the Terms (including with respect to the	of the Terms
final	calculation of payments under a NAB Capital Note 4) is final and binds NAB, the
	Registrar and each Holder.
No set-off	A Holder does not have any right to set-off any amounts owing to it by NAB in	Clause 14.8
	connection with the NAB Capital Notes 4 against any amount owing by it to NAB	of the Terms
	in connection with the NAB Capital Notes 4 or otherwise.
	NAB does not have any right to set-off any amounts owing to it by a Holder
	against any amount owing by it to the Holder in connection with the NAB Capital
	Notes 4.
Power of	Each Holder agrees to appoint NAB, its Authorised Officers and any External	Clause 23(a)
attorney	Administrator of NAB (each an "Attorney") severally to be the attorney of the	of the Terms
	Holder to sign all documents and transfers and do any other thing as may in the
	Attorney's opinion be necessary or desirable to be done in order for the Holder
	to observe or perform the Holder's obligations under the Terms including, but
	not limited to, effecting any transfers of NAB Capital Notes 4, making any entry in
	the Register or the register of any Ordinary Shares or exercising any voting power
	in relation to any consent or approval required for Conversion, Redemption or
	Resale.

48| NAB Capital Notes 4

Topic	Summary	Further
		information

Issues to	In certain circumstances NAB will issue the Ordinary Shares which a Holder is	Clause 7.12
an Eligible	obliged to accept on Conversion to an Eligible Nominee.	of the Terms
Nominee	Ordinary Shares will be issued to an Eligible Nominee:

	• where the Holder does not wish to receive Ordinary Shares as a result of a
	Conversion and notifies NAB of this at any time on or after the Issue Date and
	no less than 15 Business Days prior to the Conversion Date;
	• where the Holder is a Foreign Holder, unless NAB is satisfied that the laws of the
	Foreign Holder's country of residence permit the issue of Ordinary Shares to the
	Foreign Holder, subject to certain conditions; or
	• to the extent that a FATCA Withholding is required to be made in respect of
	Ordinary Shares.
	At the first reasonable opportunity to sell the Ordinary Shares, the Eligible
	Nominee will arrange for their sale and pay to the relevant Holder a cash amount
	equal to the proceeds of the sale (less brokerage and other costs). No guarantee is
	given in relation to the timing or price at which any sale will occur.
	Neither NAB nor the Eligible Nominee has any duty to Holders in relation to the
	price at which Ordinary Shares are sold, nor any liability for any loss suffered
	by a Holder as a result of the sale of Ordinary Shares where required in the
	circumstances described above. NAB will treat you as a Foreign Holder if your
	address in the Register is a place outside of Australia or NAB otherwise believes
	you may not be a resident of Australia.

What is the NAB Capital Notes 4 Deed Poll?

A trustee has not been appointed for NAB Capital Notes 4. Instead, NAB has made	NAB Capital
the NAB Capital Notes 4 Deed Poll in favour of each person who is from time	Notes 4
to time a Holder. The NAB Capital Notes 4 Deed Poll gives legal effect to NAB's	Deed Poll
obligations in the Terms.
Under the NAB Capital Notes 4 Deed Poll, NAB also undertakes to appoint the
Registrar and procure the Registrar to establish and maintain a principal Register.
The NAB Capital Notes 4 Deed Poll also includes provisions for meetings of
Holders.
Holders will be bound by the terms of the NAB Capital Notes 4 Deed Poll, the
Terms and this Prospectus when NAB Capital Notes 4 are issued or transferred to
them or they purchase NAB Capital Notes 4.
The Registrar will hold the original executed NAB Capital Notes 4 Deed Poll on
behalf of Holders. Each Holder can enforce NAB's obligations under the NAB
Capital Notes 4 Deed Poll, including the Terms and the provisions for meetings,
independently of the Registrar and each other.
A copy of the NAB Capital Notes 4 Deed Poll can be obtained from
nab.com.au/ncn4offer

Tax implications	Information about the Australian tax consequences of investing in NAB Capital	Section 8
	Notes 4 is set out in Section 8.
	The taxation implications of investing in NAB Capital Notes 4 will depend on an
	investor's individual circumstances. Prospective investors should obtain their own
	taxation advice.

NAB Capital Notes 4 | 49

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

Topic	Summary	Further
		information

Brokerage,	No brokerage or commission is, and no stamp duty should be, payable on
commission and	Applications for NAB Capital Notes 4. Holders may have to pay subsequent
stamp duty	brokerage on any subsequent transfer of NAB Capital Notes 4 on ASX after
	quotation.

2.10 Comparison of NAB Capital Notes 4 to other NAB instruments

Differences between term deposits, NAB Capital Notes 4 and other NAB instruments.

There are differences between NAB Capital Notes 4 and other investments in NAB, such as NAB's term deposits, NAB Subordinated Notes 2, National Income Securities, NCN, NAB Capital Notes 2, NAB Capital Notes 3 and Ordinary Shares. You should consider these differences in light of your investment objectives, financial situation and particular needs (including financial and taxation issues) before deciding to apply for NAB Capital Notes 4. The key differences are summarised in the table below. This summary is not intended to be exhaustive.

	Term deposit	NAB	National	NCN,	Ordinary
		Subordinated	Income	NAB Capital Notes 2,	Shares
		Notes 2	Securities	NAB Capital Notes 3 and
				NAB Capital Notes 4

Protection	Yes	No	No	No	No
under the
Financial
Claims Scheme 1

Term	Often between	11½ years 2	Perpetual 2	Perpetual 3	Perpetual
	1 month and 5				(no maturity
	years				date)

Margin	Varies from	2.20%	1.25%	NCN: 3.50%	N/A
	product to			NAB Capital Notes 2:
	product
			4.95%

				NAB Capital Notes 3:
				4.00%
				NAB Capital Notes 4:
				2.95%

50| NAB Capital Notes 4

	Term deposit	NAB	National	NCN,	Ordinary
		Subordinated	Income	NAB Capital Notes 2,	Shares
		Notes 2	Securities	NAB Capital Notes 3 and
				NAB Capital Notes 4

Interest /	Fixed	Floating	Floating	Floating	Variable
distribution /					dividends as
dividend rate					determined
					by Directors
Interest /	Often at the	Quarterly	Quarterly	Quarterly	Typically
distribution /	end of term or				twice yearly 4
dividend	per annum
payment dates
Rights if	N/A - interest	N/A - interest	N/A -	Distribution adjusted	None
interest /	payments are	payments are	distributions	to reflect applicable
distributions /	not franked	not franked	are not	franking rate6
dividends not			currently
fully franked			franked 5
Conditions	None, subject	Subject to	Subject to	Subject to the discretion	Subject to the
to payment	to applicable	the "solvency	conditions	of the Directors, and also	discretion
of interest /	laws and	condition" 7	including the	only payable if a payment	of the
distributions /	any specific		availability of	condition does not	Directors and
dividends	conditions		distributable	exist on the distribution	applicable
			profits	payment date	laws and
			and other	Non-cumulative	regulations
			prudential

			regulatory
			tests
			Non-
			cumulative

Dividend	N/A	No	Yes - applies	Yes - applies to Ordinary	N/A
restriction			to Ordinary	Shares only, until
if interest /			Shares and	the next distribution
dividend /			equally	payment date - see
distribution			ranking	Section 2.1 for NAB
not paid			securities	Capital Notes 4 8
			until a year's
			distribution
			is paid

NAB Capital Notes 4 | 51

SECTION TWO:

ABOUT NAB CAPITAL NOTES 4

	Term deposit	NAB	National	NCN,	Ordinary
		Subordinated	Income	NAB Capital Notes 2,	Shares
		Notes 2	Securities	NAB Capital Notes 3 and
				NAB Capital Notes 4

Transferable	No	Yes - quoted	Yes - quoted	Yes - NCN are quoted	Yes - quoted
		on ASX under	on ASX under	on ASX under the code	on ASX under
		the code	the code	'NABPC'.	the code
		'NABPE'	'NABHA'	Yes - NAB Capital Notes 2	'NAB'

				are quoted on ASX under
				the code 'NABPD'
				Yes - NAB Capital Notes 3
				are quoted on ASX under
				the code 'NABPF'
				Yes - NAB Capital Notes 4
				are expected to be
				quoted on ASX under the
				code 'NABPG'
Mandatory	No	No	No	Yes 3	N/A
Conversion into
Ordinary Shares
Issuer's early	No	No	No	Yes - with the prior	N/A
conversion				approval of APRA - see
option				Section 2.4 for NAB
				Capital Notes 4
Issuer's early	No	Yes - with	Yes - with the	Yes - with the prior	No
redemption		the prior	prior written	written approval of APRA
option		written	approval of	- see Section 2.5 for NAB
		approval of	APRA, at any	Capital Notes 4
		APRA	time on 30
			days' notice
Loss absorption	No	Yes	No	Yes - see Section 2.7 for	No
event 9				NAB Capital Notes 4
Capital	None	Tier 2	Additional Tier	Additional Tier 1 Capital	Common
classification		Capital 10	1 Capital 10		Equity Tier 1
					Capital
Voting rights	N/A	No right	No right	No right to vote at	Right to vote
		to vote at	to vote at	general meetings of	at general
		general	general	holders of Ordinary	meetings
		meetings	meetings	Shares	of holders
		of holders	of holders		of Ordinary
		of Ordinary	of Ordinary		Shares
		Shares	Shares, except
			in certain
			limited
			circumstances
Ranking	See Table 2: Illustration of ranking on winding up on page 14

52| NAB Capital Notes 4

In a winding up of NAB, NAB Capital Notes 4 rank ahead of Ordinary Shares, equally with Equal Ranking Instruments (which include National Income Securities, NAB Convertible Preference Shares II, NCN, NAB Capital Notes 2 and NAB Capital Notes 3) and junior to Senior Creditors (which includes depositors and holders of Tier 2 Capital Instruments). However, if a Loss Absorption Event occurs, NAB Capital Notes 4 are liable to be Converted into Ordinary Shares or, if Conversion does not occur for any reason within the required time, Written Off, with the effect that the rights of Holders to Distributions and returns of capital will be terminated. If NAB Capital Notes 4 are Written Off, Holders will likely be worse off than holders of NAB Convertible Preference Shares II and Ordinary Shares, as further described in Sections 2.8 and 7.1.15.

This is subject to a limit, currently fixed at $250,000 for the aggregate of the customer's accounts with an ADI that is declared under the Financial Claims Scheme.
Subject to early redemption by NAB with the prior written approval of APRA.
NCN, NAB Capital Notes 2, NAB Capital Notes 3 and NAB Capital Notes 4 are scheduled to convert into Ordinary Shares on 23 March 2022, 8 July 2024,
19 June 2028 and 17 September 2029 respectively, or on the occurrence of certain acquisition events. NAB may also be required to convert NCN, NAB Capital Notes 2, NAB Capital Notes 3 and NAB Capital Notes 4 as a result of a loss absorption event. In addition, NCN, NAB Capital Notes 2, NAB Capital Notes 3 and NAB Capital Notes 4 may be converted, redeemed or resold with the prior written approval of APRA. NCN, NAB Capital Notes 2, NAB Capital Notes 3 and NAB Capital Notes 4 may also be written off in certain circumstances.
There are no fixed dates for payment of ordinary dividends.
The distributions on the National Income Securities are currently not able to be franked due to a provision in the tax law which applies specifically to instruments that qualify as Tier 1 capital for prudential purposes. When the National Income Securities no longer qualify as Tier 1 capital from
31 December 2021, it is expected that any subsequent distributions will be franked to the same extent as dividends on Ordinary Shares are franked.
Under existing law, there is a risk that a rule may deny Holders of NAB Capital Notes 4 franking benefits in respect of Distributions. The Government is aware of this issue and has released Exposure Draft legislation which, if enacted, would apply retrospectively and allow NAB to take steps to ensure that this rule would not apply to Distributions. For further information see Section 8.
The "solvency condition" is set out in clause 2.2 of the terms and conditions of the NAB Subordinated Notes 2 and provides that NAB's obligations to make payments in respect of the NAB Subordinated Notes 2 (including to pay interest and to repay the face value on maturity) are conditional on (1) NAB being able to pay its debts as they become due and payable, and (2) NAB's assets exceeding its liabilities. Any amount not paid under this condition remains a debt payable by NAB to the holder of a NAB Subordinated Note 2 and will be payable on the first date on which that condition is satisfied.
No equivalent restriction applies if an Approved NOHC is substituted as issuer of ordinary shares on Conversion - see Section 2.9.
If NAB is required to convert or write off Relevant Tier 1 Capital Instruments, Holders should be aware that all Relevant Tier 1 Capital Instruments such as NAB Capital Notes 4 will be converted or written off before any Tier 2 Capital Instruments are converted or written off - see Section 2.7.
The NAB Subordinated Notes 2 have been classified as Tier 2 Capital under the Basel III Prudential Standards. The National Income Securities have been classified as Additional Tier 1 Capital under the Basel III Prudential Standards on a transitional basis until 31 December 2021.

NAB Capital Notes 4 | 53

SECTION THREE

ABOUT THE REINVESTMENT OFFER

54| NAB Capital Notes 4

SECTION THREE:

ABOUT THE REINVESTMENT OFFER

3.1 Overview of the Reinvestment Offer

Topic	Summary
What are NCN?	NCN are fully paid convertible notes issued by NAB in 2015. NCN trade on the ASX under the
	code 'NABPC'.
What is happening to	On 17 February 2020, NAB issued a resale notice in accordance with the NCN Terms. That
NCN?	notice confirms that on 23 March 2020 the NCN Nominated Purchaser will mandatorily
	purchase all NCN for $100 per NCN ("NCN Resale Proceeds").
	The resale notice is irrevocable, except as provided by the NCN Terms. The NCN Resale may
	not occur for a number of reasons, including if a loss absorption event occurs under the NCN
	Terms, the NCN Nominated Purchaser does not for any reason pay the NCN Resale Proceeds
	in full on 23 March 2020, APRA revokes its approval of the NCN Resale or the NCN cannot be
	transferred for any reason. If the NCN Resale does not occur, except where a loss absorption
	event occurs in respect of NCN, NCN Holders will continue to hold NCN.
	A final NCN distribution is also scheduled to be paid by NAB on 23 March 2020, subject to
	the satisfaction of the distribution payment conditions in the NCN Terms. If those conditions
	are satisfied, NCN Holders on the record date for the final distribution (including Eligible
	NCN Holders who participate in the Reinvestment Offer) will receive a cash payment of
	$0.7718 per NCN on 23 March 2020.
What is the	The Reinvestment Offer is an invitation to Eligible NCN Holders to:
Reinvestment Offer?	• apply to NAB to have the NCN Resale Proceeds relating to all or some of their NCN

	reinvested in NAB Capital Notes 4; and
	• direct the NCN Nominated Purchaser to pay the relevant NCN Resale Proceeds to NAB as
	Application Monies for that number of NAB Capital Notes 4.
	There are important differences between NCN and NAB Capital Notes 4 that Eligible
	NCN Holders should consider before deciding whether to apply to participate in the
	Reinvestment Offer. See Section 3.2 for more information.
Am I eligible to	You are eligible to participate in the Reinvestment Offer if you:
participate in the	• were registered as a holder of NCN at 7.00pm on 12 February 2020;
Reinvestment Offer?	• are shown on the NCN register as having an address in Australia;

	• are not an individual residing in a member state of the European Union; and
	• are not in the United States or acting as a nominee for, or for the account or benefit of,
	a U.S. Person or not otherwise prevented from receiving the Reinvestment Offer or NAB
	Capital Notes 4 under the laws of any jurisdiction.
Who is the NCN	UBS AG, Australia Branch (or a permitted successor).
Nominated Purchaser?
What is the purpose	The purpose of the Reinvestment Offer is to give Eligible NCN Holders the opportunity
of the Reinvestment	to reinvest their NCN Resale Proceeds in NAB Capital Notes 4 and maintain an ongoing
Offer?	investment in securities issued by NAB.
	The funds raised through the Reinvestment Offer will be used for general corporate
	purposes.

How do I apply to participate?

See Section 3.3 and Section 4 for information on how to apply to participate in the Reinvestment Offer.

NAB Capital Notes 4 | 55

SECTION THREE:

ABOUT THE REINVESTMENT OFFER

Topic

Do I need to apply for a minimum number of NAB Capital Notes 4?

Can I sell my NCN after I have completed and returned my Application Form?

Can I apply for additional NAB Capital Notes 4?

Can the Offer be scaled back?

When will the NCN cease trading on ASX?

What will happen to the NCN once acquired by the NCN Nominated Purchaser?

What are the tax implications of participating in the Reinvestment Offer and will any brokerage or stamp duty be payable?

Summary

There is no minimum number of NCN that you must hold to be able to participate in the Reinvestment Offer.

However, if you are an Eligible NCN Holder and hold 50 NCN or fewer, you must apply to reinvest the NCN Resale Proceeds relating to all of your NCN in NAB Capital Notes 4 if you wish to participate in the Reinvestment Offer.

If you are an Eligible NCN Holder and own more than 50 NCN, you can:

reinvest the NCN Resale Proceeds relating to all of your NCN; or
apply for a minimum number of 50 NAB Capital Notes 4 ($5,000) and increments of 10 NAB Capital Notes 4 ($1,000) thereafter.

No - once your Application has been received, a holding lock will be placed on the NCN the subject of your Application and you will not be able to deal with those NCN.

If on 23 March 2020 you are entitled to less NCN Resale Proceeds than the amount you have elected to reinvest because you sold some of your NCN, you will be taken to have applied for the number of NAB Capital Notes 4 that you can pay for using the NCN Resale Proceeds you received.

An Application to participate in the Reinvestment Offer is irrevocable once submitted but will only be effective so long as it is accepted and the Offer proceeds.

Eligible NCN Holders may apply for more NAB Capital Notes 4 than the number of NCN registered in their name at 7.00pm on 12 February 2020.

The minimum number of additional NAB Capital Notes 4 you can apply for is 50 NAB Capital Notes 4 ($5,000) and thereafter your Application must be in increments of 10 NAB Capital Notes 4 ($1,000).

If there is excess demand for the Offer, Applications from NCN Reinvestment Applicants and Securityholder Applicants may be scaled back. If this occurs, NAB's current intention is to give preference to NCN Reinvestment Applicants over Securityholder Applicants, while still providing for a proportion of the available NAB Capital Notes 4 to be allocated to Securityholder Applicants.

See Section 4.5 for further information.

The last day of trading of NCN on ASX will be 11 March 2020. If you hold NCN on 23 March 2020 those NCN will be mandatorily purchased by the NCN Nominated Purchaser on that date and you will receive $100 per NCN unless you participate in the Reinvestment Offer.

Once acquired by the NCN Nominated Purchaser, NAB intends to convert up to $750 million of NCN into Ordinary Shares and redeem the balance. The issue price of any Ordinary Shares issued on conversion of the NCN will be based on the volume weighted average price

of Ordinary Shares over certain days between 17 February 2020 and 20 March 2020. The number of NCN converted into Ordinary Shares may be reduced in certain circumstances (or the conversion may not proceed at all). If the number of NCN is reduced (or the conversion does not proceed at all), there will be a corresponding increase to the number of NCN redeemed.

A general outline of the taxation implications for certain Australian investors participating in the Offer (including through the Reinvestment Offer) can be found in the Australian taxation summary in Section 8.

No brokerage is, and no stamp duty should be, payable on the sale of your NCN to the NCN Nominated Purchaser, or your application for NAB Capital Notes 4.

NCN Holders who choose to sell their NCN on market through their broker may be required to pay applicable brokerage.

56| NAB Capital Notes 4

3.2 What are the key differences between NAB Capital Notes 4 and NCN?

There are certain differences between NAB Capital Notes 4 and NCN which you should be aware of before deciding to apply to participate in the Reinvestment Offer. The following table describes the key features of the NAB Capital Notes 4 and NCN and highlights the main differences between them. You should consider these differences in light of your investment objectives, financial situation and particular needs (including financial and taxation issues) before deciding to apply for NAB Capital Notes 4.

Topic	NCN
Protected under	No
the Financial Claims
Scheme
Term	Perpetual 1
Margin	3.50%
Distribution rate	Floating
Distribution payment	Quarterly
dates
Rights if distributions	Distribution adjusted to reflect applicable
not fully franked	franking rate
Conditions to payment	Subject to the discretion of the Directors,
of distribution	and also only payable if a Payment
	Condition (as defined in the NCN Terms)
	does not exist on the distribution payment
	date. Distributions are not cumulative
Dividend restriction if	Yes - applies to Ordinary Shares only, until
distribution not paid	the next distribution payment date
Transferable	Yes - quoted on ASX under the code
	'NABPC'
Mandatory conversion	Yes 1
into ordinary shares
NAB's early conversion	Yes - with the prior approval of APRA
option
NAB's early	Yes - with the prior approval of APRA
redemption option

NAB Capital Notes 4

Perpetual 1

2.95%

Floating

Quarterly

Distribution adjusted to reflect applicable franking rate2

Subject to the discretion of the Directors, and also only payable if a Payment Condition does not exist on the Distribution Payment Date. Distributions are not cumulative

Yes - applies to Ordinary Shares only, until the next Distribution Payment Date - see Section 2.13

Expected to be quoted on ASX under the code 'NABPG'

Yes 1

Yes - with the prior approval of APRA - see Section 2.4

Yes - with the prior written approval of APRA - see Section 2.5

NAB Capital Notes 4 | 57

SECTION THREE:

ABOUT THE REINVESTMENT OFFER

Topic	NCN	NAB Capital Notes 4

Loss absorption event	Yes	Yes - see Section 2.74

Capital classification	Additional Tier 1 Capital	Additional Tier 1 Capital

Voting rights	No right to vote at general meetings of
	holders of Ordinary Shares

No right to vote at general meetings of holders of Ordinary Shares

On 17 February 2020, NAB issued a resale notice in accordance with the NCN Terms. That notice confirms that on 23 March 2020, the NCN Nominated Purchaser will mandatorily purchase all NCN for $100 per NAB Capital Note. Therefore, NAB will now only be required to convert NCN if a loss absorption event occurs in respect of the NCN. NAB Capital Notes 4 are scheduled to Convert into Ordinary Shares on 17 September 2029, or on the occurrence
of certain Acquisition Events. NAB may also be required to convert NAB Capital Notes 4 as a result of a Loss Absorption Event. In addition, NAB Capital Notes 4 may be Converted, Redeemed or Resold with the prior written approval of APRA. NAB Capital Notes 4 may also be Written Off in certain circumstances.
Under existing law, there is a risk that a rule may deny Holders of NAB Capital Notes 4 franking benefits in respect of Distributions. The Government is aware of this issue and has released Exposure Draft legislation which, if enacted, would apply retrospectively and allow NAB to take steps to ensure that this rule would not apply to Distributions. For further information, see Section 8.
No equivalent restriction applies if an Approved NOHC is substituted as issuer of ordinary shares on Conversion - see Section 2.9.
If NAB Capital Notes 4 are not Converted when required following a Loss Absorption Event, those NAB Capital Notes 4 are Written Off and all obligations are terminated.

3.3 What are the options available for Eligible NCN Holders?

Option	Summary
Option 1 - Apply	• If you are an Eligible NCN Holder, you may apply to participate in the Reinvestment Offer
directly to NAB	by completing an Application Form and choosing Alternative A or B below.
	• The Application Form must be received online or by the Registry by 5.00pm on the Closing
	Date which is expected to be 17 March 2020. See Section 4 for further information on how
	to make an Application.
	• If you make an Application under the Reinvestment Offer, your NCN Resale Proceeds will
	be used as the Application Monies and you will not be required to pay any additional
	amount in respect of your Application.
	• If you participate in the Reinvestment Offer, you will receive a final NCN distribution
	that is scheduled to be paid by NAB on 23 March 2020, subject to the satisfaction of the
	distribution payment conditions in the NCN Terms. That final distribution cannot be
	reinvested.

Alternative A. Reinvest all of your NCN Resale Proceeds in NAB Capital Notes 4

You may apply to reinvest the NCN Resale Proceeds relating to ALL of the NCN registered in your name at 7.00pm on 12 February 2020 in NAB Capital Notes 4.
To choose this alternative, you must indicate "Reinvest all my NCN in NAB Capital Notes 4" on your Reinvestment Offer Application Form.
If you wish to participate in the Reinvestment Offer and own 50 NCN or fewer you must choose this alternative, and not alternative B.

Alternative B. Reinvest some NCN Resale Proceeds in NAB Capital Notes 4

You may reinvest the NCN Resale Proceeds relating to only some of the NCN registered in your name at 7.00pm on 12 February 2020 in NAB Capital Notes 4.
To choose this alternative, you must specify the amount of your NCN Resale Proceeds which you wish to reinvest on your Reinvestment Offer Application Form.
You must apply to reinvest at least $5,000 (being your NCN Resale Proceeds relating to at least 50 NCN).

58| NAB Capital Notes 4

Option

Option 1 - Apply directly to NAB

Option 2 - Apply through your Syndicate Broker

Option 3 - sell your NCN on market through your broker

Option 4 - take no action - Your NCN will be compulsorily purchased for $100 per NCN on 23 March 2020

Summary

Alternative C. Apply for additional NAB Capital Notes 4

You may also apply for more NAB Capital Notes 4 than the number of NCN registered in your name at 7.00pm on 12 February 2020. The application for additional NAB Capital Notes 4 will be made under the Securityholder Offer.
The minimum number of additional NAB Capital Notes 4 you can apply for is 50 NAB Capital Notes 4 ($5,000).
To choose this alternative, you must specify the number of additional NAB Capital
Notes 4 you wish to apply for under the Securityholder Offer on your Reinvestment Offer Application Form.
You are required to enclose the Application Monies for the additional NAB Capital Notes 4 applied for under the Securityholder Offer. Application Monies must be paid by cheque, money order or BPAY®5- see Section 4 for further details.
If you are an Eligible NCN Holder and you are an Australian resident client of a Syndicate Broker, you may apply to participate in the Reinvestment Offer through your Syndicate Broker.
You may apply to reinvest the NCN Resale Proceeds relating to all or some of the NCN registered in your name at 7.00pm on 12 February 2020 in NAB Capital Notes 4. If you do this, your NCN Resale Proceeds will be used as the Application Monies for your Application, and you will not be required to pay any additional amount in respect of your Application. You may also choose to apply for more NAB Capital Notes 4.
You should contact your Syndicate Broker for instructions on how to submit an Application Form and, if applicable, the Application Monies.
If you participate in the Reinvestment Offer, you will receive a final NCN distribution that is scheduled to be paid by NAB on 23 March 2020, subject to the satisfaction of the distribution payment conditions in the NCN Terms. That final distribution cannot be reinvested.
You may choose to sell your NCN on market through your broker or otherwise at the prevailing market price in the usual course.
The market price of NCN is subject to change from time to time.Up-to-date information about the market price of NCN can be obtained from asx.com.au(ASX code 'NABPC').
If selling through your broker, you should contact your broker before the last trading day for NCN.
If you sell your NCN on market, you may have to pay brokerage and may receive a price greater or less than the face value of $100 per NCN.
Eligible NCN Holders are not required to participate in the Reinvestment Offer and as such are not required to take any action.
On 17 February 2020, NAB issued a resale notice in accordance with the NCN Terms. That notice confirms that the NCN Nominated Purchaser will mandatorily purchase all NCN on 23 March 2020 and you will receive $100 per NCN from the NCN Nominated Purchaser (unless a circumstance arises which results in the NCN Resale not occurring). You will also receive a final NCN distribution that is scheduled to be paid by NAB on that date, subject to the satisfaction of the distribution payment conditions in the NCN Terms.

5Registered to BPAY Pty Limited ABN 69 079 137 518.

NAB Capital Notes 4 | 59

SECTION THREE:

ABOUT THE REINVESTMENT OFFER

3.4 What are the risks associated with participating in the Reinvestment Offer?

If you are an Eligible NCN Holder and you apply under the Reinvestment Offer, you may receive an allocation of NAB Capital Notes 4. As such, you will be subject to the risks associated with an investment in NAB Capital Notes 4 and in NAB, many of which are outside the control of NAB and its Directors. These risks are outlined in Section 7 and should be considered before you apply under the Reinvestment Offer.

The Reinvestment Offer is not a simple rollover into a similar investment. NAB Capital Notes 4 and NCN have different benefits and risks, which must be evaluated separately (see Section 3.2).

Additionally, instead of participating in the Reinvestment Offer, Eligible NCN Holders may obtain a better financial outcome by selling their NCN on market or receiving the NCN Resale Proceeds in cash, and subsequently acquiring NAB Capital Notes 4 on market.

60| NAB Capital Notes 4

SECTION FOUR

APPLYING FOR NAB CAPITAL NOTES 4

NAB Capital Notes 4 | 61

SECTION FOUR:

APPLYING FOR NAB CAPITAL NOTES 4

4.1 Who can apply for NAB Capital Notes 4?

Type of Offer Who is eligible to participate?

ReinvestmentYou are eligible to

Offerapply under the Reinvestment Offer if you are an Eligible NCN Holder.

You are an Eligible NCN Holder if you:

were registered as a holder of NCN at 7.00pm on 12 February 2020;
are shown on the NCN register as having an address in Australia;
are not an individual residing in a member state of the European Union; and
are not in the United States or acting as a nominee for, or for the account or benefit of, a U.S. Person or not otherwise prevented from receiving the Reinvestment Offer or NAB Capital Notes 4 under
the laws of any jurisdiction.
NAB has sent a pre-registration brochure to each Eligible NCN Holder to inform them of the Offer.

When to apply

Applications will only be accepted during the Offer Period, which opened on

25 February 2020.

Applications will not be accepted after the Closing Date, which is expected to be 5.00pm on 17 March 2020.

However, NAB and the JLMs may, in their absolute discretion, close the Offer early without notice, so

if you wish to apply you are encouraged to do so as soon as possible.

How to apply online

Eligible NCN Holders applying directly to NAB may apply online by following the instructions at

nab.com.au/

ncn4offer

Eligible NCN Holders who are Australian resident clients of a Syndicate Broker should contact their Syndicate Broker for instructions on how to apply.

If you are only applying under the Reinvestment Offer, your NCN Resale Proceeds will be used as the Application Monies and you will not be required to pay any additional amount in respect of your Application.

However, if you also apply for additional NAB Capital Notes 4 under the Securityholder Offer you will be required to pay Application Monies for those additional NAB Capital Notes 4.

How to apply using a paper Application Form

Eligible NCN Holders applying directly to NAB may apply by completing the Reinvestment Offer Application Form accompanying

this Prospectus, and lodging that Application Form with the Registry in accordance with the instructions in Section 4.2.

Eligible NCN Holders who are Australian resident clients of a Syndicate Broker should contact their Syndicate Broker for instructions on how to apply.

However, if you also apply for additional NAB Capital Notes 4 under the Securityholder Offer you will be required to pay Application Monies for those additional NAB Capital Notes 4.

62| NAB Capital Notes 4

Type of Offer	Who is eligible to
	participate?

When to apply

How to apply online

How to apply using a paper Application Form

Securityholder	You are eligible to
Offer	apply under the
	Securityholder Offer
	if you are an Eligible
	Securityholder.
	You are an Eligible
	Securityholder if you
	were a registered
	holder of Ordinary
	Shares, National
	Income Securities, NAB
	Subordinated Notes 2,
	NAB Convertible
	Preference Shares II,
	NCN, NAB Capital
	Notes 2 or NAB Capital
	Notes 3 as at 7.00pm
	on 12 February 2020,
	with a registered
	address in Australia.
	NAB has sent a
	pre-registration
	brochure to each
	Eligible Securityholder
	to inform them of the
	Offer.

Applications will only be accepted during the Offer Period, which opened on

25 February 2020.

Applications will not be accepted after the Closing Date, which is expected to be 5.00pm on 17 March 2020.

However, NAB and the JLMs may, in their absolute discretion, close the Offer early without notice, so if you wish to apply you are encouraged to do so as soon as possible.

Eligible Securityholders may apply online by following the instructions at nab.com.au/ncn4offerand completing a BPAY® payment. Follow the instructions in Section 4.3 to complete your BPAY® payment.

If you do not make a BPAY® payment, your Application will be incomplete and will not be accepted.

Your online Application Form and BPAY® payment must be completed and received by the Registry before the Closing Date, which is expected to be 5.00pm on 17 March 2020.

Eligible Securityholders may apply by completing the Application Form accompanying

this Prospectus, and lodging that Application Form and accompanying cheque or money order with the Registry. Follow the instructions in Section

4.2 to complete your payment by cheque or money order.

Institutional	If you are an
Offer	Institutional Investor,
	you must apply
	to participate by
	contacting the
	Arranger.

Applications will only be accepted during the Offer Period, which opened on

25 February 2020.

Applications will not be accepted after the Closing Date, which is expected to be 5.00pm on 17 March 2020.

If you are an Institutional Investor, you must apply to participate in the Institutional Offer by contacting the Arranger. NAB reserves the right not to accept Applications from Institutional Investors where they have not been received through the Arranger.

Broker FirmThe Broker Firm Offer

Offeris available to clients of a Syndicate Broker, including Eligible Securityholders and Eligible NCN Holders, who are Australian resident retail investors.

Applications will only be accepted during the Offer Period, which opened on

25 February 2020.

Applications will not be accepted after the Closing Date, which is expected to be 5.00pm on 17 March 2020.

If you are applying under the Broker Firm Offer (including to reinvest your NCN Resale Proceeds), you should contact the Syndicate Broker who has offered you an allocation in the Broker Firm Offer for information about how and when to lodge your Application and accompanying cheque(s) and/or money order(s) (if required).

Generally, your Application will be lodged with the Syndicate Broker.

NAB Capital Notes 4 | 63

SECTION FOUR:

APPLYING FOR NAB CAPITAL NOTES 4

4.2 How to pay by cheque or money order

Cheques and money orders must be in Australian dollars and drawn on an Australian branch of a financial institution. They should be made payable to "NAB Capital Notes 4 Offer" and be crossed "not negotiable".

Completed Application Forms and accompanying cheques and/or money orders can be lodged with the Registry by either:

mailing them using thereply-paid envelope to:
National Australia Bank Limited C/- Computershare Investor Services Pty Limited
Reply Paid 52 Melbourne VIC 8060
mailing them using any other envelope to:
NAB Capital Notes 4 Offer C/- Computershare Investor Services Pty Limited
GPO Box 52 Melbourne VIC 3001
lodging them by hand at the following address:
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street Abbotsford VIC 3067

Application Forms and Application Monies will not be accepted at any other address or office (including NAB's registered office or any other NAB office or branch, or other branches or offices of the Registrar).

Application Forms and accompanying cheques / money orders must be received at the above addresses

by no later than the Closing Date, which is expected to be 5pm on 17 March 2020.

4.3 How to pay by BPAY®

If you are an Applicant under the Securityholder Offer and you apply by using an online Application Form, you will be given a BPAY® biller code and unique customer reference number for your Application once you have completed your online Application Form.

Using these BPAY® details, you must:

access your participating BPAY® financial institution either through telephone or internet banking;
select to use BPAY® and follow the prompts;
enter the supplied biller code and unique customer reference number;
enter the total amount to be paid which corresponds to how many NAB Capital Notes 4 you wish to apply for under each Application;
select which account you would like your payment to come from;
schedule your payment to occur on the same day that you complete your online Application Form. Applications without payment will not be accepted; and
record and retain the BPAY® receipt number and date paid.

Please note that your bank, credit union or building society may impose a limit on the amount which you can transact on BPAY® and payment cutoff times may vary between different financial institutions.

You must check with your financial institution about their BPAY® closing time, to ensure that your payment will be received together with your Application Form prior to the Closing Date.

4.4 Application Monies and Refunds

All Application Monies received before NAB Capital Notes 4 are issued will be held by NAB on trust in an account established solely for the purposes of depositing Application Monies received. Any interest that accrues in that account will be retained by NAB. After NAB Capital Notes 4 are issued to successful Applicants, the Application Payments held on trust will be payable to NAB.

Where the number of NAB Capital Notes 4 allocated is less than the number applied for, or where no allocation is made, surplus Application Monies will be refunded (without interest) as soon as practicable following finalisation of the Offer.

If the Offer does not proceed for any reason, all Applicants will have their Application Monies refunded (without interest) as soon as practicable.

4.5 Allocation policy

4.5.1 Reinvestment Offer and Securityholder Offer

Allocations to NCN Reinvestment Applicants and Securityholder Applicants will be determined by NAB in consultation with the Joint Lead Managers.

Applications from NCN Reinvestment Applicants and Securityholder Applicants may be scaled back if there is excess demand for the Offer. In the event of excess demand, NAB's current intention is to give preference to NCN Reinvestment Applicants over the Securityholder Applicants while still providing for a proportion of the available NAB Capital Notes 4 to be allocated to Securityholder Applicants. How NAB scales back Applications will depend on the extent of Applications from NCN Reinvestment Applicants and Securityholder Applicants. In the event of excess demand, it is possible that the proportionate scale back applied to Securityholder Applicants will be greater than that applied to NCN Reinvestment Applicants.

64| NAB Capital Notes 4

Any scale back and the basis of Allocation will be announced on 23 March 2020 on ASX.

NAB, at its discretion and in consultation with the Joint Lead Managers, reserves the right to:

allocate to any NCN Reinvestment Applicant or Securityholder Applicant all NAB Capital Notes 4 for which they have applied;
reject any Application by a NCN Reinvestment Applicant or a Securityholder Applicant; or
allocate to any NCN Reinvestment Applicant or Securityholder Applicant a lesser number of NAB Capital Notes 4 than that applied for, including less than the minimum Application of NAB Capital Notes 4 or none at all.

No assurance is given that any NCN Reinvestment Applicant or Securityholder Applicant will receive an Allocation.

4.5.2 Broker Firm Offer

Allocations to Syndicate Brokers and Institutional Investors were determined by NAB following completion of the Bookbuild and reflected expected demand under the Reinvestment Offer.

Allocations to Broker Firm Applicants by a Syndicate Broker are at the discretion of that Syndicate Broker, and it is possible for Applications from Broker Firm Applicants to be scaled back by a Syndicate Broker. Priority will be given to Broker Firm Applicants who apply to reinvest their NCN Resale Proceeds over other Broker Firm Applicants. NAB takes no responsibility for any allocation, scale back or rejection that is decided by a Syndicate Broker.

4.6 ASX quotation and Holding Statements

NAB has applied for NAB Capital Notes 4 to be quoted on ASX. Quotation of NAB Capital Notes 4 is not guaranteed.

Trading of NAB Capital Notes 4 on a normal settlement basis is expected to commence on 24 March 2020.

NAB has applied for NAB Capital Notes 4 to participate in CHESS, and if accepted, no certificates will be issued. NAB expects that Holding Statements for issuer sponsored holders and confirmations for CHESS holders will be despatched to successful Applicants by 27 March 2020.

A Holder must determine their allocation before trading NAB Capital Notes 4 to avoid the risk of selling NAB Capital Notes 4 the Holder does not own.

4.7 Provision of bank account details for Distribution payments

Under the Terms, payments in respect of each NAB Capital Note 4 will be made on the due date for payment (or if that day is not a Business Day, then the following Business Day).

To receive payments, Holders must notify the Registrar of an Australian dollar bank account maintained in Australia with a financial institution to which payments in respect of NAB Capital Notes 4 may be credited. On the relevant payment date, NAB will directly credit the payment amount to the Australian financial institution account specified by the Holder.

If you have not notified an appropriate account by close of business on the Record Date, or the transfer of any amount for payment to the credit

of the nominated account does not complete for any reason, then NAB will send a notice to the address most recently notified by you advising of the uncompleted payment. In that case, the amount of the uncompleted payment will be held as a deposit in a non-interest bearing, special purpose account maintained by NAB or the Registry until the first to occur of the following:

you nominate a suitable Australian dollar account maintained in Australia with a financial institution to which the payment may be credited;
claims may no longer be made in respect of that amount, in which case the monies shall be paid to and be the property of NAB; or
NAB is entitled or obliged to deal with the amount in accordance with the law relating to unclaimed monies.

No additional interest is payable in respect of any delay in payment.

NAB Capital Notes 4 | 65

SECTION FIVE

OVERVIEW OF NAB

66| NAB Capital Notes 4

SECTION FIVE: OVERVIEW OF NAB

5.1 Overview

NAB is a public limited company, incorporated on June 23, 1893 in Australia, which is its main domicile. Its registered office address is Level 1, 800 Bourke Street, Docklands Victoria 3008, Australia.

The Group is a financial services organisation with more than 34,000 people, operating through a network of almost 900 locations, serving approximately nine million customers and with over 577,000 shareholders.

The majority of the Group's financial services businesses operate in Australia and New Zealand, with branches currently located in Asia, the UK and the US.

Critical to the Group's ability to achieve its objectives is the maintenance of strong foundations with respect to its balance sheet (including capital, funding and liquidity), risk (including credit and operational risk) and technology.

5.2 Our services

The Group operates the following divisions:

Business & Private Banking, which focuses on serving the needs of three of the Group's priority customer segments - small businesses, medium businesses and investors. Customers are served through an integrated banking model locally led by managing partners through business banking centres and through small business customer hubs. This includes specialists in Health, Agribusiness, Government, Education, Community and Franchising, Professional Services and Commercial Real Estate. The division also serves high net worth customers through the Private Bank and JBWere.
Consumer Banking and Wealth, which provides customers with products and services through proprietary networks in NAB and UBank, as well as third party and mortgage brokers. Customers are served through the Consumer

Banking network to secure home loans or manage personal finances through deposit, credit or personal loan facilities. The network also provides servicing support to individuals and business customers. Wealth, including Wealth Advice, Asset Management and Superannuation, provides customers with access to advisers and a financial planning network of self-employed and employed advisers in Australia.

Corporate and Institutional Banking, which provides a range of lending and transactional products and services related to financial and debt capital markets, specialised capital, custody and alternative investments. The division serves its customers in Australia and globally, including branches in the US, UK and Asia with specialised industry relationships and product teams.
It includes Bank of New Zealand's Markets Trading operations.
NZ Banking, which comprises the Consumer Banking, Wealth Business, Agribusiness, Corporate and Insurance franchises and Markets Sales operations in New Zealand, operating under the "Bank of New Zealand" brand. It excludes Bank
of New Zealand's Markets Trading operations.

5.3 Recent Developments

Group CEO and Chairman

On 2 December 2019, Mr Ross McEwan commenced as Group Chief Executive Officer ("CEO").

On 15 November 2019, Mr Philip Chronican commenced as Chairman of the Board of Directors.

First Quarter Trading Update

On 13 February 2020, NAB released its 2020 first quarter trading update. A copy of that update can be obtained from asx.com.auand nab.com.au/ shareholder

Wealth Management Update

In May 2018, NAB announced an intention to reshape its wealth offering, consistent with its plan to become

simpler and faster. A detailed review, determined the Group could best serve the needs of its customers and deliver long term value for shareholders by retaining and investing in a more focussed wealth offering. This involves retaining JBWere, part of the Group's leading Business and Private Banking franchise, to help high net worth customers manage their personal wealth alongside their business interests, combined with nabtrade, the Group's fast growing online investing platform, supporting self-directed customers.

The Group intends to exit its Advice, Superannuation & Investment Platforms and Asset Management businesses, currently operating under MLC and other brands ("MLC Wealth"). Separate ownership will allow this business to determine its own strategy and investment priorities to better deliver for customers and enhance its competitive position. It is expected there will be ongoing arrangements between NAB and MLC, to offer NAB customers continued access to advice and products to meet their wealth management needs.

The Group continues to make progress towards a separation of MLC Wealth. The Group is targeting a public market exit but will also explore alternative transaction structures and options. To assist this exit, the Group's focus includes client remediation, operational separation and enhancing long term business sustainability.

The Group will take a disciplined approach to the exit of MLC Wealth and will execute a transaction at the appropriate time having regard for the interests of all stakeholders. Work on operational separation has progressed well but the business environment remains challenging. This may defer exit beyond FY20. Any transaction remains subject to market conditions, regulatory and other approvals.

NAB Capital Notes 4 | 67

SECTION SIX

FINANCIAL INFORMATION

The summary financial information presented in this section has been extracted from the Group's Annual Financial Report 2019.

The financial information presented in this section has been prepared in accordance with the measurement and recognition requirements of Australian Accounting Standards.

It is presented in abbreviated form and does not contain all of the disclosures usually provided in an annual financial report prepared in accordance with the Corporations Act.

Copies of NAB's Annual Financial Reports, half-yearly reports, presentations and other documents lodged with ASX can be obtained from the Shareholder Centre at nab.com.au/shareholder and from asx.com.au

68| NAB Capital Notes 4

SECTION SIX:

FINANCIAL INFORMATION

6.1 Consolidated Income Statement

The following table sets out the Group's consolidated income statement for the years ended 30 September 2018 and 30 September 2019.

	For the year ended 30 September	2019	2018
		$m	$m

	Interest income	29,203	28,543
	Interest expense	(15,645)	(15,038)

	Net interest income	13,558	13,505
	Other income	4,373	5,596
Operating expenses	(9,827)	(9,910)
Credit impairment charge	(927)	(791)

	Profit before income tax	7,177	8,400
	Income tax expense	(2,087)	(2,455)

	Net profit for the year from continuing operations	5,090	5,945
	Net (loss) after tax for the year from discontinued operations	(289)	(388)

	Net profit for the year	4,801	5,557
Proft attributable to non-controlling interests	3	3

	Net profit attributable to owners of NAB	4,798	5,554

	Earnings per share	cents	cents

	Basic	168.6	201.3
	Diluted	164.4	194.0

	Basic from continuing operations	178.9	215.6
Diluted from continuing operations	173.9	207.2

6.2 Pro-forma Consolidated Balance Sheet

The following table sets out the Group's consolidated balance sheet as at 30 September 2019 (in the column headed 'Reported Group 30 September 2019'), and the pro-forma consolidated balance sheet assuming the Offer was completed at this date.

The column headed 'Group Pro-forma 30 September 2019' outlines the impact of:

$1,950 million of NAB Capital Notes 4 being issued and external issue costs of $19 million being incurred; and
the conversion of $750 million of the $1,343 million outstanding NCN, and the redemption of the balance once the NCN have been acquired by the NCN Nominated Purchaser under the NCN Resale.1

The pro-forma consolidated balance sheet is unaudited and has been prepared in accordance with the basis of preparation outlined on page 68.

1The issue price of any Ordinary Shares issued on conversion of the NCN will be based on the volume weighted average price of Ordinary Shares over certain days between 17 February 2020 and 20 March 2020. The number of NCN converted into Ordinary Shares may be reduced in certain circumstances (or the conversion may not proceed at all). If the number of NCN converted is reduced (or the conversion does not proceed at all) there will be a corresponding increase in the number of NCN redeemed and a corresponding reduction in contributed equity and cash assets.

NAB Capital Notes 4 | 69

SECTION SIX:

FINANCIAL INFORMATION

As at 30 September	Reported Group	Pro-forma	Group Pro-forma
	30 September 2019	adjustment related	30 September 2019
		to the Offer	$m
	$m	$m
Assets
Cash and liquid assets	55,457	1,338	56,795
Due from other banks	32,130		32,130
Trading instruments	96,828		96,828
Debt instruments	40,205		40,205
Other financial assets	7,110		7,110
Hedging derivatives	4,689		4,689
Loans and advances	587,749		587,749
Due from customers on acceptances	2,490		2,490
Property, plant and equipment	1,117		1,117
Goodwill and other intangible assets	5,576		5,576
Deferred tax assets	2,670		2,670
Other assets	11,103		11,103

Total assets	847,124	1,338	848,462

Liabilities
Due to other banks	34,273		34,273
Trading instruments	34,318		34,318
Other financial liabilities	33,283		33,283
Hedging derivatives	4,037		4,037
Deposits and other borrowings	522,085		522,085
Current tax liabilities	468		468
Provisions	3,507		3,507
Bonds, notes and subordinated debt	143,258		143,258
Other debt issues	6,482	588	7,070
Other liabilities	9,809		9,809

Total liabilities	791,520	588	792,108

Net assets	55,604	750	56,354

Equity
Contributed equity	38,707	750	39,457
Reserves	306		306
Retained profits	16,583		16,583

Total equity (parent entity interest)	55,596	750	56,346
Non-controlling interest in controlled entities	8		8

Total equity	55,604	750	56,354

70| NAB Capital Notes 4

6.3 Capital Management

6.3.1 Capital Adequacy Framework

APRA is the prudential regulator of the Australian financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurance, friendly societies, and most members of the superannuation industry.

The Prudential Standards aim to ensure that ADIs maintain adequate capital levels commensurate with the risks associated with their activities, with appropriate buffers to absorb unexpected losses.

To ensure that ADIs are adequately capitalised on both a standalone and group basis, APRA adopts a tiered approach to the measurement of an ADI's capital adequacy by assessing the ADI's financial strength at two levels:

Level 1 basis: the NAB Level 1 Group is NAB and a limited number of APRA approved subsidiaries; and
Level 2 basis: the NAB Level 2 Group is the consolidated banking group (i.e. the consolidated financial group less certain subsidiaries and associates excluded under APRA's Prudential Standards, principally the superannuation and funds managements entities, insurance subsidiaries and certain securitisation special purpose vehicles).

APRA advises the Group of its prudential capital requirements which represent the minimum ratios of regulatory capital to total RWA.

"Common Equity Tier 1 Capital" comprises paid-up ordinary share capital, retained earnings plus certain other items recognised as capital. The ratio of such capital to RWA is called the "Common Equity Tier 1 Capital Ratio". "Additional Tier 1 Capital" comprises certain securities (such as NAB Capital Notes 4) with required loss absorbing characteristics. Together, Common Equity Tier 1 Capital and Additional Tier 1 Capital make up "Tier 1 Capital" and the ratio of such

capital to RWA is called the "Tier 1 Capital Ratio".

Common Equity Tier 1 Capital comprises the highest quality and most loss absorbent components of capital, followed by Additional Tier 1 Capital and then followed by Tier 2 Capital. Tier 2 Capital is of a lesser quality than Tier 1 Capital and mainly comprises subordinated instruments (such as NAB Subordinated Notes 2).

The sum of Tier 1 Capital and Tier 2 Capital is called "Total Capital". The ratio of Total Capital to RWA is called the "Total Capital Ratio".

APRA has provided confirmation that NAB Capital Notes 4, once issued, will qualify as Additional Tier 1 Capital for the purposes of the regulatory capital requirements that apply to NAB.

On 1 January 2013, APRA's Basel III Prudential Standards came into effect. The Basel III Prudential Standards give effect to the capital reform package released by the Basel Committee on Banking Supervision ("BCBS") aimed at raising the quality and quantity of capital in the global banking system.

Broadly, the key features of this framework include:

A minimum Common Equity Tier 1 Capital of at least 4.5% of RWA and Tier 1 Capital of at least 6.0% of RWA;
A capital conservation buffer ("CCB") of 2.5% of RWA required to be made up of Common Equity Tier 1 Capital that places restrictions on capital distributions if an ADI's capital level falls within the buffer range; and
A countercyclical capital buffer of between 0 and 2.5% of total RWA, which is calculated as the weighted average of the countercyclical capital buffers that are applied by the regulatory authorities in jurisdictions in which the ADI has private sector credit exposures. APRA determines the countercyclical capital buffer for the Australian jurisdiction at the appropriate level when excessive credit growth and other indicators point to asystem-widebuild-up
of risk.

APRA may determine higher prudential capital requirements for an ADI and may change an ADI's prudential capital requirements at any time.

In December 2013, APRA released its framework in relation to domestic systemically important banks ("D-SIBs") in Australia. NAB has been identified as a D-SIB and as a result is subject

to a higher loss absorbency ("HLA") requirement of 1% of RWA.

As at the date of this Prospectus, APRA has set the countercyclical capital buffer for the Australian exposures of locally incorporated ADIs at 0%. However, APRA has flagged the likelihood of a non-zero countercyclical capital buffer in the future. The weighted average of the jurisdictional countercyclical capital buffers that are applied by the regulatory authorities in jurisdictions to which NAB has private sector credit exposures as at

30 September 2019 is 6 basis points, leading to an approximately 0% overall countercyclical capital buffer as at

30 September 2019.

The D-SIB HLA requirement and countercyclical capital buffer have been implemented through an extension of the capital conservation buffer, effective 1 January 2016. As at 30 September 2019, the capital conservation buffer inclusive of

the D-SIB HLA requirement and countercyclical capital buffer, was approximately 3.5% of RWA, resulting in a Common Equity Tier 1 Capital requirement inclusive of buffers of at least 8% of RWA.

Restrictions on the distribution of earnings, including payment of dividends, discretionary bonuses and Additional Tier 1 Capital distributions apply when capital ratios fall below at least 8% of RWA and into the capital conservation buffer as illustrated in the graph on the next page.

APRA may determine higher prudential capital requirements for an ADI and may change an ADI's prudential capital requirements at any time.

NAB Capital Notes 4 | 71

SECTION SIX:

FINANCIAL INFORMATION

					Maximum
	Minimum 8.0%		distribution of
					earnings

	Quartile 4		< PCR	60%
		+3.5%



	Quartile 3		<PCR		40%	Distribution of
		+2.625%		earnings are
3.5% Capital
					increasingly restricted

Conservation Buffer			<PCR			further into the capital

	Quartile 2			20%	conservation buffer
	+1.75%



	Quartile 1		<PCR	0%
		+0.875%

Prudential Capital

Requirement (PCR)

4.5% minimum Common Equity Tier 1 Capital Ratio plus any additional amount required by APRA

6.3.2 Regulatory Capital Developments

'Unquestionably Strong' and Basel III Revisions

In December 2017, the BCBS finalised the Basel III capital framework. APRA subsequently commenced consultation on revisions to the domestic capital framework in February 2018 and reaffirmed its intention to strengthen capital requirements for major Australian banks by around 150 basis points, such that they are considered 'unquestionably strong'.

APRA's consultation on revisions to the capital framework includes consideration of 'benchmarks for capital strength', 'risk sensitivity of the capital framework' and 'transparency, comparability and flexibility of the capital framework'. Final revised

prudential standards in relation to the risk-weighting framework and other capital requirements are expected to be released in 2020, for proposed implementation by 1 January 2022.

In October 2019, APRA proposed changes to the treatment of equity investments in subsidiaries for calculating Level 1 regulatory capital. APRA intends to finalise these changes in early 2020, for implementation by 1 January 2021.

RBNZ revisions to capital framework

In December 2019, the Reserve Bank of New Zealand ("RBNZ") announced its decision to require banks deemed systemically important in NZ (including BNZ) to hold Tier 1 Capital amounting to 16% of RWA.

Increased Loss-absorbing

Capacity for ADIs

In July 2019, APRA released its framework for the implementation of an Australian loss-absorbing capacity regime, requiring an increase in Total Capital of 3% of RWA for D-SIBs by 1 January 2024. APRA has maintained its overall target calibration of 4% to 5% of RWA, and will consult on alternative methods for raising the additional loss- absorbing capacity equal to 1% to 2% of RWA over the next four years.

For more information regarding the risks associated with regulatory change, see Section 7.2.8.1.

72| NAB Capital Notes 4

6.3.3 The Group's Capital Management Strategy

The Group's capital management strategy is focused on adequacy, efficiency and flexibility. The capital adequacy objective ensures sufficient capital is held in excess of internal risk-based required capital assessments and regulatory requirements, and is maintained in line with the Group's balance sheet risk appetite and investor expectations. This approach is consistent across the Group's subsidiaries.

6.3.4 NAB's Tier 1 Capital position

Figure 2 illustrates NAB's historical Tier 1 Capital position under APRA's Basel III Prudential Standards. The column labelled "Dec-19pro-forma unaudited" illustrates the impact of the Offer and the NCN Resale, showing NAB's pro-forma Tier 1 Capital position as at 31 December 2019 assuming:

$1,950 million of NAB Capital Notes 4 were issued and external issue costs of $19 million were incurred; and
the conversion of $750 million of the $1,343 million outstanding NCN into Ordinary Shares and the redemption of the balance following the acquisition of the NCN by the NCN Nominated Purchaser under the NCN Resale.2

Figure 2: NAB Level 2 Tier 1 Capital Ratio

.% -	.%	.%	.%	.%	.%	.%

.% - .% - .% - .% - .% - .% - .% - .% - .% -

Sep-	Sep-	Sep-	Sep-	Dec-	Dec-pro-forma
				unaudited	unaudited

2The issue price of any Ordinary Shares issued on conversion of the NCN will be based on the volume weighted average price of Ordinary Shares over certain days between 17 February 2020 and 20 March 2020. The number of NCN converted into Ordinary Shares may be reduced in certain circumstances (or the conversion may not proceed at all). If the number of NCN converted is reduced (or the conversion does not proceed at all) there will be a corresponding increase in the number of NCN redeemed.

NAB Capital Notes 4 | 73

SECTION SIX:

FINANCIAL INFORMATION

6.3.5 NAB's Common Equity Tier 1 Ratio

The Terms contain a Common Equity Trigger Event as required under APRA's Basel III Prudential Standards for NAB Capital Notes 4 to be eligible for inclusion as Additional Tier 1 Capital.

A Common Equity Trigger Event occurs when the Common Equity Tier 1 Ratio of either or both of the NAB Level 1 Group or the NAB Level 2 Group is equal to or less than 5.125% (see clause 24.1 of the Terms). Upon the occurrence of a Common Equity Trigger Event, some or all NAB Capital Notes 4 will immediately Convert into a number of Ordinary Shares (or if they are not Converted at that time, they will be Written Off).

The differences between NAB's Level 1 and Level 2 Common Equity Tier 1 Capital Ratios relate principally to the level of capital held by, and RWA of, BNZ and Wealth subsidiaries (excluding superannuation and funds management entities, insurance subsidiaries and certain securitisation special purpose vehicles).

NAB gives no assurance as to what its Common Equity Tier 1 Capital Ratio on a Level 1 or Level 2 basis will be at any time as it may be significantly impacted by unexpected events affecting its business, operations and financial condition.

The NAB Level 2 Group Common Equity Tier 1 Ratio was 10.6% as at 31 December 2019, and is approximately $23 billion3in excess of the Common Equity Tier 1 Ratio that would result in a Common Equity Trigger Event, being 5.125%.

NAB met APRA's 'unquestionably strong' target Common Equity Tier 1 Capital Ratio of at least 10.5% by January 2020 and is targeting a minimum of 10.5% CET1 at March and September 2020.

Figure 3 illustrates NAB's historical Common Equity Tier 1 ratio based on APRA's Basel III Prudential Standards.

The column labelled "Dec-19pro-forma unaudited" illustrates the impact of the Offer and NCN Resale, showing NAB's pro-forma Common Equity Tier 1 Ratio as at 31 December 2019 assuming the matters outlined in Section 6.3.4.

Figure 3: NAB Level 2 Common Equity Tier 1 Capital Ratio

.% -

Surplus common equity

.% -above common equity trigger

•• billion

.% -

Common Equity Tier

.% -trigger (.%)

.% - .% -

Sep-	Sep--	Sep-	Sep-€	Dec-€	Dec-€pro-forma
				unaudited	unaudited

3This dollar amount and the dollar amounts shown in Figure 3 are unaudited and indicative only as at 31 December 2019 and will vary with movements in NAB's earnings, NAB's RWA and other movements in NAB's capital. The restrictions in the prudential standards and in the Common Equity Trigger Event are expressed in terms of ratios and not fixed amounts of capital.

6.3.6 Potential impacts on NAB Capital Notes 4

If NAB's Level 2 Tier 1 Capital Ratio or Level 2 Common Equity Tier 1 Capital Ratio are too low, it may indicate that NAB may not be able to elect to Redeem NAB Capital Notes 4 or pay Distributions.

74| NAB Capital Notes 4

6.4 Funding and liquidity

The Group maintains a strong capital, funding and liquidity position in line with its ongoing commitment to balance sheet strength.

Funding

The Group monitors the composition and stability of funding and liquidity through the Board approved risk appetite which includes compliance with regulatory requirements of APRA's Liquidity Coverage Ratio ("LCR") and Net Stable Funding Ratio ("NSFR").

LCR and NSFR are relevant measures in assessing balance sheet strength and if either of them is too low, it may indicate that NAB may not be able to elect to Redeem NAB Capital Notes 4 or pay Distributions. The Group continues to pursue opportunities to further enhance and diversify its liquid asset holdings and funding sources.

Compliance with the NSFR became effective on 1 January 2018 and establishes a minimum acceptable amount of stable funding based on the liquidity characteristics of an ADI's assets and activities over a one-year horizon. At 30 September 2019 the Group's NSFR was 113%, above the regulatory minimum of 100%. This position was supported by term wholesale funding issuance being executed in excess of term wholesale funding maturities and an increase in the proportion of stable customer deposits over the September 2019 full year.

Liquidity

The Group maintains well diversified and high quality liquid asset portfolios to support regulatory and internal requirements in the various regions in which it operates. The market value of total on balance sheet marketable securities held at 30 September 2019 was $130 billion which excludes self- securitised assets. This represents

an increase of $4 billion from 30 September 2018.

Prudential Liquid assets averaged $143 billion over the September 2019 quarter (consisting of both High Quality

Liquid Assets ("HQLA") and Committed Liquidity Facility ("CLF") assets). The CLF is a facility provided by the Reserve Bank of Australia to commercial banks to assist them in meeting

the Basel III liquidity requirements. The Group had an approved CLF of $55.9 billion during the period 1 January 2019 to 31 December 2019. The Group holds internal Residential Mortgage Backed Securities ("RMBS") along with external central bank repo-eligible securities as sources of contingent liquidity and to support the CLF. Unencumbered internal RMBS held at 30 September 2019 was $50 billion (post applicable central bank deduction).

The average Group LCR was 126% for the quarter ending 30 September 2019, above the regulatory minimum

of 100%.

6.5 Impact of the Offer

The proceeds of the Offer will be used by NAB for general corporate purposes. The Offer will not have a material impact on NAB's cash flow.

6.6 Further Information

NAB is a disclosing entity for the purposes of the Corporations Act and so is subject to periodic reporting obligations under the Corporations Act and the ASX Listing Rules, including an obligation to lodge half-yearly and annual financial reports with ASIC and ASX. The Corporations Act and the ASX Listing Rules also require NAB to disclose to the market matters which could be expected to have a material effect on the price or value of NAB's securities.

Copies of:

the Annual Financial Report 2019; and
all documents lodged with the ASX since the date of the Annual Financial Report 2019,

can be obtained from the Shareholder Centre at nab.com.au/shareholderand from asx.com.au

NAB Capital Notes 4 | 75

SECTION SEVEN

KEY RISKS OF NAB CAPITAL NOTES 4

This section describes key potential risks that you should consider in deciding whether to invest in NAB Capital Notes 4, including risks that may affect NAB's business and financial performance.

The selection of risks has been based on an assessment of a combination of the probability of the risk occurring and the impact of the risk if it did occur. There is no guarantee or assurance that the importance of different risks will not change or that other risks will not emerge.

Before applying for NAB Capital Notes 4, you should consider whether NAB Capital Notes 4 are a suitable investment for you. There are risks associated with an investment in NAB Capital Notes 4 and in NAB, many of which are outside the control of NAB and its Directors. These risks include those referred to in this section and other matters referred to in this Prospectus.

76| NAB Capital Notes 4

SECTION SEVEN:

KEY RISKS OF NAB CAPITAL NOTES 4

7.1 Risks associated with investing in NAB Capital Notes 4

7.1.1 Investments in NAB Capital Notes 4 are not Protected Accounts under the Banking Act or any other accounts or deposit liabilities of NAB

NAB Capital Notes 4 are not deposit liabilities of NAB, are not Protected Accounts or any other accounts with NAB and are not insured or guaranteed by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction, by any member of the Group or by any other party.

7.1.2 Distributions may not be paid

There is a risk that Distributions will not be paid. The Terms do not oblige NAB to pay Distributions.

The payment of Distributions on NAB Capital Notes 4 is subject to the discretion of the Directors, which means they may not be paid. Failure to pay a Distribution when scheduled will not constitute an event of default.

Distributions are also only payable if a Payment Condition does not exist on the Distribution Payment Date.

The circumstances in which a Payment Condition will exist are described in Section 2.1. They include the cases where the payment of a Distribution will result in a breach of APRA's regulatory capital requirements as they apply to NAB, or will result in NAB becoming, or being likely to become, insolvent for the purposes of the Corporations Act, where APRA otherwise objects to the payment of a Distribution, or where NAB is not permitted to pay the Distribution under the Corporations Act.

The Terms contain no events of default and non-payment of a Distribution is not an event of default. A Holder:

has no right to apply for NAB to be wound up or placed in administration, or to cause a receiver or a receiver and manager to be

appointed in respect of NAB merely on the grounds that NAB does not or is or may become unable to pay a Distribution; and

has no right toset-off any amount owing to it by NAB in connection with NAB Capital Notes 4 against any amount owing by it to NAB or otherwise.

Distributions are non-cumulative, and therefore if a Distribution is not paid then NAB has no liability to pay that Distribution and Holders have no claim or entitlement in respect of such non- payment.

If a Distribution is not paid in full on a Distribution Payment Date, subject to certain exceptions, NAB cannot declare, determine to pay, or pay dividends on its Ordinary Shares or return capital (unless Holders approve the payment by Ordinary Resolution) until the next Distribution Payment Date. However, if the Distribution is paid in full within 3 Business Days of the Distribution Payment Date, this restriction will no longer apply.

Changes in regulations applicable to NAB may impose additional requirements which prevent NAB from paying Distributions in additional circumstances.

7.1.3 Changes in Distribution Rate

The Distribution Rate is calculated for each Distribution Period by reference to the Bank Bill Rate, which is influenced by a number of factors and varies over time. The Distribution Rate will go up or down over time as a result of movements in the Bank Bill Rate - see Section 2.1. As the Distribution Rate goes up or down, there is a risk that an investment in NAB Capital Notes 4 may become less attractive when compared to other investments issued by NAB or other entities. It is possible for the Bank Bill Rate to be negative. If this occurs, the negative amount will be taken into account in calculating the Distribution Rate (but there is no obligation on Holders to pay NAB if the Distribution Rate becomes negative).

NAB does not guarantee any particular rate of return on NAB Capital Notes 4. Changes in the corporate tax rate will also affect the Distribution Rate. If the corporate tax rate were to change, the cash amount of Distributions and the amount of any franking credits will change.

7.1.4 Market price of NAB Capital Notes 4 and Ordinary Shares

The market price of NAB Capital Notes 4 may go up or down due to various factors, including investor perceptions, Australian and worldwide economic conditions, interest rates, movements in foreign exchange rates, impacts of regulatory change (including intervention by ASIC in the market for NAB Capital Notes 4 or similar securities), changes in the laws relating to the availability of franking, movements in the market price of Ordinary Shares or senior or subordinated debt, the availability

of better rates of return on other securities and factors that may affect NAB's financial performance and position. NAB Capital Notes 4 may trade at a market price below the Face Value.

In recent years, markets have become more volatile. Volatility risk is the potential for fluctuations in the price of securities, sometimes markedly and over a short period. Investing in volatile conditions implies a greater level of volatility risk for investors than an investment in a more stable market.

You should carefully consider this additional volatility risk before deciding whether to make an investment in NAB Capital Notes 4.

The Ordinary Shares held as a result of any Conversion will, following Conversion, rank equally with existing Ordinary Shares. Accordingly, the ongoing value of any Ordinary Shares received upon Conversion will depend upon the market price of Ordinary Shares after the date on which NAB Capital Notes 4 are Converted. The market price of Ordinary Shares is also subject to the factors outlined above and may also be volatile.

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The market price of NAB Capital

Notes 4 (as well as the Ordinary Shares) may go up or down as a result of the information disclosed to the market by NAB in order to comply with its continuous disclosure requirements.

7.1.5 Liquidity

There may be no liquid market for NAB Capital Notes 4. Additionally, the market for NAB Capital Notes 4 may be less liquid than the market for Ordinary Shares or comparable securities issued by NAB or other entities.

The liquidity of the market for NAB Capital Notes 4 may be negatively impacted by a number of factors, including changes in law, including law relating to franking credits or other laws, or if pursuant to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 ("DDOPIP Legislation"), ASIC exercises its product intervention powers in relation to the NAB Capital Notes 4 or comparable securities issued by NAB or other entities.

The DDOPIP Legislation imposes design and distribution obligations on the issuers, providers and distributors of financial products and provide ASIC with a product intervention power (see Section 7.1.27 for further detail). The impact of these new obligations remains untested, however there is a risk that they may adversely impact the issue, distribution and reinvestment of financial products in the future, including instruments like NAB Capital Notes 4. These changes may also affect the liquidity of funding instruments (including hybrids such as NAB Capital Notes 4), if they lead to a material reduction in future issuance volumes or secondary trading activity by investors.

Holders who wish to sell their NAB Capital Notes 4 may be unable to do so at an acceptable price, or at all, if insufficient liquidity exists in the market for NAB Capital Notes 4. NAB Capital Notes 4 are expected to Convert into Ordinary Shares on 17 September 2029 (subject to certain conditions being satisfied) unless NAB Capital Notes 4

are otherwise Converted, Written Off, Redeemed or Resold on or before that date. Where NAB Capital Notes 4 are Converted, there may be no liquid market for Ordinary Shares at the time of Conversion or the market for Ordinary Shares may be less liquid than that for comparable securities issued by other entities at the time of Conversion.

In addition, there is no guarantee that NAB Capital Notes 4 will remain continuously quoted on ASX. Trading of ASX listed securities may be suspended in certain circumstances.

7.1.6 The Ordinary Share price used to calculate the Conversion Number of Ordinary Shares may be different to the market price at the time of Conversion

Upon Conversion, Holders will receive approximately $101 worth of Ordinary Shares per NAB Capital Note 4 (based on the VWAP during a period, usually 20 Business Days, before the Mandatory Conversion Date or other date on which NAB Capital Notes 4 are Converted). The market price of Ordinary Shares may go up or down due to various factors.

For a Conversion following a Loss Absorption Event, depending on the market price of Ordinary Shares at the relevant time, Holders are likely to receive significantly less than $101 worth of Ordinary Shares per NAB Capital Note 4 and may lose a significant amount of the money they invested in NAB Capital Notes 4 as a consequence - see Sections 2.7 and 7.1.14.

The VWAP during the relevant period before the date of Conversion that is used to calculate the number

of Ordinary Shares that Holders receive may differ from the Ordinary Share price on or after the date of Conversion. As a result, the market value of Ordinary Shares received upon Conversion may be greater than or less than $101 per NAB Capital Note 4 when they are issued or at any time after that, and could be less than the Face Value.

Holders receiving Ordinary Shares on Conversion may not be able to sell those Ordinary Shares at the price on which the Conversion calculation was based, or at all.

7.1.7 Franking of Distributions

NAB expects Distributions to be franked at the same rate as dividends paid on Ordinary Shares. The effect of Distributions being franked is to reduce the cash amount received by Holders on each Distribution Payment Date by an amount equal to the relevant level of franking.

If a Distribution payment is not fully franked, then the Distribution will be adjusted to reflect the applicable franking rate (see clause 2.5 of the Terms).

7.1.8 Use of franking credits by Holders

The value and availability of franking credits to a Holder will differ depending on the Holder's particular tax circumstances and applicable Australian tax laws. Holders should be aware that the potential value of any franking credits does not accrue at the same time as the receipt of any cash Distribution. Holders should also be aware that the ability to use the franking credits, either as an offset to a tax liability or by claiming a refund after the end of the income year, will depend on the individual tax position of each Holder and applicable Australian tax laws.

As set out in the Australian Taxation Summary in Section 8, there is a provision of current Australian tax law which would operate to deny Holders the benefit of franking credits on their Distributions if those Distributions give rise to a tax deduction for NAB in a foreign jurisdiction. The Government is aware of this issue and Exposure Draft legislation was released in December 2019 proposing to amend this provision retrospectively so that it will not apply to deny the benefit of franking credits on a distribution where the issuer of the instrument provides a notification to the Commissioner

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of Taxation ("Commissioner") that it will not claim any such foreign income tax deduction. Assuming that the amending legislation is enacted, NAB will provide such a notification to the Commissioner. In addition, the ATO has released guidance confirming that the ATO is not planning to take any action in respect of investors' compliance with the current law at this time.

Holders should be aware that they will not receive any compensation or "gross up" if they are denied the benefit of franking credits on their Distributions for any reason, and should refer to the Australian Taxation Summary in Section 8 and the ATO class ruling (when published). There is no certainty that the legislative amendments referred to above will be enacted. If enacted, the amendments would apply to distributions from 1 January 2019.

Investors should seek professional advice in relation to their tax position and monitor any such potential changes on an ongoing basis.

Holders should also refer to the Australian Taxation Summary in Section 8 and seek professional advice in relation to their tax position.

7.1.9 NAB Capital Notes 4 are perpetual and Mandatory Conversion may not occur on the scheduled Mandatory Conversion Date or at all

NAB Capital Notes 4 are expected to Convert into Ordinary Shares on 17 September 2029 (subject to the NAB Capital Notes 4 being on issue at that date and certain conditions being satisfied).

However, there is a risk that Conversion will not occur because the Mandatory Conversion Conditions are not satisfied due to a large fall in the Ordinary Share price relative to the Issue Date VWAP, or where a Delisting Event applies. Depending on the market price of Ordinary Shares at the relevant time, Conversion may not occur. The Ordinary Share price may be affected by transactions affecting the share capital of NAB, such as rights issues,

placements, returns of capital, certain buy-backs and other corporate actions. The Issue Date VWAP is adjusted only for transactions by way of a reorganisation and pro rata bonus issues of Ordinary Shares as described in clauses 7.5 and 7.6 of the Terms and not for other transactions, including rights issues, placements, returns of capital, buy-backs or special dividends. The Terms do not limit the transactions which NAB may undertake with respect to its share capital and any such action may affect whether Conversion will occur and may adversely affect the position of Holders.

If Mandatory Conversion does not occur on the Scheduled Mandatory Conversion Date, Mandatory Conversion would then occur on the next Distribution Payment Date on which all of the Mandatory Conversion Conditions are satisfied (unless

NAB Capital Notes 4 are otherwise Converted, Written Off, Redeemed or Resold on or before that date). If Mandatory Conversion does not occur on a possible Mandatory Conversion Date and NAB Capital Notes 4 are not otherwise Converted, Written Off, Redeemed or Resold, Distributions may continue to be paid on NAB Capital Notes 4 (subject to the Directors resolving to pay a Distribution and no Payment Condition existing on the relevant Distribution Payment Date(s)).

NAB Capital Notes 4 are a perpetual instrument. If the Ordinary Share price deteriorates significantly and never recovers, it is possible that the Mandatory Conversion Conditions will never be satisfied. If this occurs, and unless NAB Capital Notes 4 are otherwise Converted, Redeemed or Resold (see further Sections 7.1.10 to

7.1.14 below), NAB Capital Notes 4 may remain on issue indefinitely.

7.1.10 Conversion on an Acquisition Event

NAB Capital Notes 4 are issued by NAB, which, as an ASX-listed company, may be affected by merger and acquisition activity, including the possibility

of being acquired by, or merged

with, another company or group of companies, potentially resulting in a change of control.

Where this corporate activity constitutes an Acquisition Event, as defined in the Terms, subject to certain conditions, NAB must Convert all NAB Capital Notes 4 in accordance with clauses 5 and 7 of the Terms. Conversion may occur on dates not previously contemplated by Holders, which may be disadvantageous in light of market conditions or their individual circumstances and may not coincide with their individual preference in terms of timing. This also means that the period for which Holders will be entitled to the benefit of the rights attaching to NAB Capital Notes 4 (such as Distributions) is unknown.

7.1.11 Conversion, Redemption or Resale at NAB's option

NAB may (subject to APRA's prior written approval) elect to Convert, Redeem or Resell some or all NAB Capital Notes 4 on 17 September 2027 or following the occurrence of a Tax Event or Regulatory Event. In addition, NAB may also Convert some or all NAB Capital Notes 4 on the occurrence of a Potential Acquisition Event.

Holders have no right to request or require a Conversion, Redemption or Resale of their NAB Capital Notes 4.

Any Conversion, Redemption or Resale at NAB's option may occur on dates not previously contemplated by Holders, which may be disadvantageous in light of market conditions or their individual circumstances and may not coincide with their individual preference in terms of timing. This also means that the period for which Holders will be entitled to the benefit of the rights attaching to NAB Capital Notes 4 (such as Distributions) is unknown.

The method of Conversion, Redemption or Resale chosen by NAB may be disadvantageous to Holders and may not coincide with their individual preference in terms of whether they receive Ordinary Shares or cash on the relevant date.

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For example, if APRA approves an election by NAB to Redeem NAB Capital Notes 4, Holders will receive cash equal to $100 per NAB Capital Note 4 rather than Ordinary Shares. Accordingly, they will not benefit from any subsequent increases in the Ordinary Share price after the Redemption occurs. In addition, where Holders receive cash on Redemption, the rate of return at which they could reinvest their funds may be lower than the Distribution Rate at the time.

Upon any Resale, it will be a Nominated Purchaser's obligation to pay the Resale Price to the Holders. NAB does not guarantee the Nominated Purchaser will pay this amount and if it does not the Holders will continue to hold NAB Capital Notes 4.

Where Holders receive Ordinary Shares on Conversion, they will have the same rights as other holders of Ordinary Shares, which are different to the rights attaching to NAB Capital Notes 4.

7.1.12 Optional Conversion, Redemption and Resale subject to certain events occurring

If NAB elects to Convert (other than where it must Convert), Redeem or Resell NAB Capital Notes 4, APRA's prior written approval is required.

Holders should not expect that APRA will give its approval to any Conversion, Redemption or Resale.

Optional Conversion

The optional Conversion of NAB Capital Notes 4 by NAB is also subject to the level of the Ordinary Share price on the second Business Day before the date on which NAB is to send a notice advising Holders that it wishes to Convert

NAB Capital Notes 4 (or if trading in Ordinary Shares did not occur on that date, the Business Day prior to that date on which trading in Ordinary Shares occurred). If the VWAP on that date

is less than or equal to 22.50% of the Issue Date VWAP (see Section 2.4), NAB is not permitted to elect to Convert NAB Capital Notes 4. Also, if a Delisting Event applies, NAB is not permitted to elect to Convert NAB Capital Notes 4.

In addition, Conversion on an Optional Conversion Date is subject to both the Second Mandatory Conversion Condition (applied as if it referred to 20.20% of the Issue Date VWAP) and no Delisting Event applying in respect of the Optional Conversion Date as if the Optional Conversion Date were a possible Mandatory Conversion Date.

If the requirements for Conversion on the Optional Conversion Date are not satisfied, NAB will notify Holders and the Conversion will be deferred until the next Distribution Payment Date on which the Mandatory Conversion Conditions would be satisfied if that Distribution Payment Date were a possible Mandatory Conversion Date (with this condition applied as if the percentage of the Issue Date VWAP were 22.50% for the First Mandatory Conversion Condition and 20.20% for the Second Mandatory Conversion Condition).

Optional Redemption

The optional Redemption of NAB Capital Notes 4 is subject to the condition that APRA is satisfied that either NAB Capital Notes 4 the subject of the Redemption are replaced concurrently or beforehand with a capital instrument of the same or better quality and the replacement of NAB Capital Notes 4 is done under conditions that are sustainable for NAB's income capacity, or that the capital position of the NAB Level 1 Group and the NAB Level 2 Group will remain adequate after NAB elects to Redeem the NAB Capital Notes 4.

NAB is not permitted to elect to Redeem or Resell NAB Capital Notes 4 on account of an Acquisition Event or a Potential Acquisition Event.

7.1.13 Other events affecting Conversion

Other events and conditions may affect the ability of Holders to trade or dispose of the Ordinary Shares issued on Conversion (e.g. the willingness or ability of ASX to accept the Ordinary Shares issued on Conversion for quotation or any practical issues which

affect that quotation, any disruption to the market for the Ordinary Shares or to capital markets generally, the availability of purchasers for Ordinary Shares and any costs or practicalities associated with trading or disposing of Ordinary Shares at that time).

7.1.14 Conversion on account of a Loss Absorption Event

NAB must immediately Convert NAB Capital Notes 4 into Ordinary Shares if a Loss Absorption Event occurs. A Loss Absorption Event may occur at any time and on any day (whether or not the day is a Business Day). Accordingly, any such Conversion on account of a Loss Absorption Event may occur on dates not previously contemplated by Holders, which may be disadvantageous in light of market conditions or their individual circumstances and may not coincide with their individual preference in terms of timing.

A Loss Absorption Event is each of:

a Common Equity Trigger Event; and
aNon-Viability Trigger Event.

See Section 2.7 for a description of Common Equity Trigger Events and Non-Viability Trigger Events and Section 6.3 for a discussion of factors that influence NAB's Common Equity Tier 1 Ratio.

If a Loss Absorption Event occurs:

Conversion is not subject to the Mandatory Conversion Conditions being satisfied;
Conversion may occur automatically without the need for any further act or step by NAB. In that case, NAB will treat a Holder in respect of its NAB Capital Notes 4 as having been issued the Conversion Number of Ordinary Shares. NAB expects that any ASX trades in NAB Capital Notes 4 that have not settled on the date a Loss Absorption Event occurs will continue to settle in accordance with the normal ASX T+2 settlement, although NAB expects the seller will be treated as having delivered, and the buyer will be treated as having

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acquired, the Conversion Number of Ordinary Shares into which NAB Capital Notes 4 have been Converted as a result of the occurrence of the Loss Absorption Event;

NAB may also seek a trading halt to prevent further trading in NAB Capital Notes 4 on ASX, and if ASX permits, may refuse to register transfers of NAB Capital Notes 4 that have not settled - this may result in disruption or failures in trading or dealings in NAB Capital Notes 4 (which may cause a Holder to suffer loss);
Holders will not receive prior notice of Conversion or have any rights to vote or right of approval in respect of the Conversion; and
the Ordinary Shares issued on Conversion may not be quoted at the time of issue, or at all.

If a Loss Absorption Event were to occur, depending on how much Common Equity Tier 1 Capital NAB needs, NAB may be:

permitted by APRA to convert or write off only a proportion of NAB Capital Notes 4 and other Relevant Tier 1 Capital Instruments; or
required to either convert or write off all Relevant Tier 1 Capital Instruments (including NAB Capital Notes 4).

If NAB is required to convert or write off all Relevant Tier 1 Capital Instruments (such as NAB Capital Notes 4), Holders should be aware that all Relevant Tier 1 Capital Instruments will be converted or written off before any Relevant Tier 2 Capital Instruments are converted or written off. NAB has no obligation to maintain any Relevant Tier 1 Capital Instruments on issue and gives no assurance that it will do so.

All Relevant Tier 1 Capital Instruments must be converted or written off where the Loss Absorption Event is a Non-Viability Trigger Event involving a determination by APRA that a public sector injection of capital would be required.

APRA determinations in relation to Loss Absorption Events

Where NAB is permitted to convert or write off only a proportion of NAB Capital Notes 4 and other Relevant Tier 1 Capital Instruments following a Loss Absorption Event, NAB:

must endeavour to treat Holders on an approximately proportionate basis, but may discriminate to take account of the effect on marketable parcels of NAB Capital Notes 4 and other logistical considerations, provided that nothing in the making of the selection or the adjustments is to delay or impede the Conversion taking effect; and
where Relevant Tier 1 Capital Instruments are not all in the same currency, NAB may treat them as if converted into a single currency of NAB's choice at such rate of exchange as NAB considers reasonable (but may make adjustments among Holders and holders of other Relevant Tier 1 Capital Instruments having regard to the need to effect conversion immediately).

Accordingly, should a Loss Absorption Event occur, and NAB is permitted to Convert only some and not all NAB Capital Notes 4, not all Holders may have their NAB Capital Notes 4 Converted into Ordinary Shares.

In relation to Common Equity Trigger Events, see Section 6.3 for information on NAB's current level of Common Equity Tier 1 Capital. NAB's level of Common Equity Tier 1 Capital may be affected by risks associated with its business and its ability to raise and maintain levels of capital which are outside its control.

In relation to Non-Viability Trigger Events, APRA has not provided specific guidance as to how it would determine non-viability. However, APRA has indicated that non- viability is likely to arise prior to the insolvency of an ADI. Non-viability could be expected to include serious impairment of NAB's financial position and insolvency; however, it is possible that APRA's definition of non-viable may not necessarily be confined to

solvency or capital measures and APRA's position on these matters may change over time. Non-viability may be significantly impacted by a number of factors, including factors which affect the business, operation and financial condition of NAB. For instance, systemic and non-systemic macroeconomic, environmental and operational factors, domestically or globally, may affect the viability of NAB.

Conversion following a Loss

Absorption Event

The number of Ordinary Shares that a NAB Capital Note 4 Holder will receive on Conversion following a Loss Absorption Event is calculated in accordance with the Conversion Number formula which provides for a calculation based on a discounted

5 Business Day VWAP but cannot be more than the Maximum Conversion Number. Accordingly, this is likely to result in a Holder receiving significantly less than $101 worth of Ordinary Shares per NAB Capital Note 4 and losing a significant amount of the money they invested in NAB Capital Notes 4 as a result.

This is because:

the number of Ordinary Shares is limited to the Maximum Conversion Number and this number of Ordinary Shares is likely to have a value of significantly less than $101;
the number of shares is calculated by reference to the price of Ordinary Shares on the 5 Business Days before the Loss Absorption Event Conversion Date which may differ from the Ordinary Share price on or after that date. The Ordinary Shares may not be listed or may not be able to be sold at prices representing their value based on the VWAP.
In particular, VWAP prices will be based wholly or partly on trading days which occurred before the Loss Absorption Event; and
as noted in Section 2.3, the Maximum Conversion Number may be adjusted to reflect a consolidation, division or reclassification of Ordinary Shares and pro rata bonus issues. However, no adjustment will be made to it on

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account of other transactions which may affect the price of Ordinary Shares, including for example rights issues, returns of capital, buy-backs or special dividends. The Terms do not limit the transactions that NAB may undertake with respect to its share capital and any such action may increase the risk that the Maximum Conversion Number is triggered if NAB Capital Notes 4 are Converted.

Failure to Convert

If Conversion is required in respect of a NAB Capital Note 4 on account of a Loss Absorption Event but has not been effected within 5 days of the Loss Absorption Event Conversion Date for any reason (including an Inability Event), NAB Capital Notes 4 which would otherwise be Converted, will not be Converted and will instead be Written Off.

If a Write Off occurs in respect of a NAB Capital Note 4, the rights of the Holder to Distributions and returns of capital will be terminated, the NAB Capital Note 4 that is Written Off will not be Converted, Redeemed or Resold on any subsequent date and the Holder will not have their capital repaid. Holders will suffer loss as a result.

The laws under which an Inability Event may arise include laws relating to the ability of a person to acquire interests in an Australian corporation or financial sector entity. The laws and other grounds on which an Inability Event may arise may change and the change may be adverse to the interests of Holders.

Recent changes to the law have given statutory recognition to conversion and write off provisions in regulatory capital instruments such as NAB Capital Notes 4, subject to limited exceptions.

7.1.15 Restrictions on rights and ranking in a winding up of NAB

NAB Capital Notes 4 are issued by NAB under the NAB Capital Notes 4 Deed Poll. A Holder has no claim on NAB in respect of NAB Capital Notes 4 except as provided in the Terms and the NAB Capital Notes 4 Deed Poll.

NAB Capital Notes 4 are unsecured and subordinated. In the event of a winding up of NAB, and assuming NAB Capital Notes 4 have not been Converted, Redeemed or Resold and are not required to be Written Off due to a Loss Absorption Event, investors will be entitled to claim for the Face Value ($100 for each NAB Capital Note 4) after payment of all claims ranking senior to NAB Capital Notes 4.

Claims ranking senior to NAB Capital Notes 4 are claims of holders of senior ranking securities and instruments (including Tier 2 Capital Instruments) and all other creditors (including depositors and certain subordinated creditors whose claims do not rank equally with NAB Capital Notes 4). Accordingly, NAB's obligations under NAB Capital Notes 4 will not be satisfied unless it can satisfy in full all of its other obligations ranking senior to NAB Capital Notes 4. Further, where NAB Capital Notes 4 are Converted, and NAB is wound up, Holders will rank equally and have the claims

of holders of Ordinary Shares. The Maximum Conversion Number is likely to be different from the maximum conversion number of other Relevant Tier 1 Capital Instruments. Accordingly, the number of Ordinary Shares received on Conversion of NAB Capital Notes 4 may be more or less than the number received by holders of other Relevant Tier 1 Capital Instruments.

Where NAB Capital Notes 4 are required to be Converted on account of a Loss Absorption Event but Conversion has not been effected within 5

days of the Loss Absorption Event Conversion Date and, accordingly, NAB Capital Notes 4 have been Written Off (as described in Section

2.7 and clause 4.5 of the Terms), the relevant Holders' rights (including to Distributions and Face Value) in relation to such NAB Capital Notes 4 will be immediately terminated and Written Off (with effect from the Loss Absorption Event Conversion Date). The Holder's investment will lose all of its value and the Holder will not receive any Ordinary Shares or other compensation.

If, on a winding up of NAB, there are insufficient funds to pay all amounts ranking senior to and equally with NAB Capital Notes 4, Holders will not receive all or some of the Face Value.

Although NAB Capital Notes 4 may pay a higher rate of distribution than comparable securities and instruments which are not subordinated, there is a significant risk that a Holder will lose all or some of their investment should NAB become insolvent.

Holders should also understand that, as at the date of this Prospectus, NAB has on issue NAB Convertible Preference Shares II, which take the form of convertible preference shares. Due to the requirements of the law at the time those securities were issued, if NAB Convertible Preference Shares II are Written Off, the rights of holders of NAB Convertible Preference Shares II are not terminated but are instead varied so as to give a holder rights equivalent to the rights in respect

of Ordinary Shares it would have received if conversion had occurred. Accordingly, if NAB Capital Notes 4 are Written Off, Holders will have lesser rights and will likely be worse off than holders of NAB Convertible Preference Shares II even though NAB Convertible Preference Shares II rank equally with NAB Capital Notes 4.

7.1.16 Future issues or redemptions of securities by NAB

NAB Capital Notes 4 do not in any way restrict NAB from issuing further securities or from incurring further indebtedness. NAB may in the future issue securities (including further Tier 1 Capital Securities) that:

Rank for distributions or payments of capital (including on the winding up of NAB) equal with, behind or ahead of NAB Capital Notes 4;
Have the same or different dividend, interest or distribution rates as those for NAB Capital Notes 4;
Have payment tests and distribution restrictions or other covenants which affect NAB Capital Notes 4 (including by restricting circumstances in which Distributions can be paid or NAB

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Capital Notes 4 can be Redeemed or Resold); or

Have the same or different terms and conditions as NAB Capital Notes 4.

An investment in NAB Capital Notes 4 carries no right to participate in any future issue of securities (whether equity, Tier 1 Capital, subordinated or senior debt or otherwise) by NAB.

No prediction can be made as to the effect (if any) that the future issue of securities by NAB may have on the market price or liquidity of NAB Capital Notes 4 or as to the likelihood of NAB making payments on NAB Capital Notes 4. Similarly, NAB Capital Notes 4 do not restrict any member of the Group from redeeming, buying back or undertaking a reduction of capital or otherwise repaying its other securities (whether existing securities or which may be issued in the future). However, NAB may be restricted from declaring or paying a dividend, buying back or reducing capital on Ordinary Shares in certain circumstances (see clause 2.8 of the Terms).

An investment in NAB Capital Notes 4 carries no right to be redeemed or otherwise repaid at the same time as NAB redeems, or otherwise repays, holders of other securities (whether equity, Tier 1 Capital, subordinated or senior debt or otherwise).

7.1.17 Exposure to the Group's financial performance and position

If the Group's financial performance or position declines, or if market participants anticipate that it may decline, an investment in NAB Capital Notes 4 may decline in value. Accordingly, when you evaluate whether to invest in NAB Capital Notes 4 you should carefully evaluate the investment risks associated with an investment in NAB - see Section 7.2.

7.1.18 The restriction on Ordinary Share dividend payments applies in limited circumstances

The restriction on dividend payments

where Distributions on NAB Capital Notes 4 are not paid only applies in respect of Ordinary Shares and not distributions in respect of any other securities, including those ranking equally with or senior to NAB Capital Notes 4.

Accordingly, a failure to make a scheduled payment on NAB Capital Notes 4 may not restrict the making of payments in respect of instruments that may in the future rank equally with NAB Capital Notes 4.

Further, the restriction in NAB Capital Notes 4 only applies until the next Distribution Payment Date and is subject to certain exceptions. The dates for distribution with respect to Ordinary Shares are determined by NAB in its discretion and do not bear a fixed relationship to the Distribution Payment Dates for NAB Capital Notes 4. Accordingly, as soon as the restriction ceases to apply (as will be the case if the next scheduled Distribution on NAB Capital Notes 4 is paid) NAB will not be restricted from paying a dividend on its Ordinary Shares.

7.1.19 Changes to credit ratings

NAB's cost of funds, margins, access to capital markets and competitive position and other aspects of its performance may be affected by its credit ratings (including any long-term credit ratings or the ratings assigned to any class of its securities). Credit rating agencies may withdraw, revise or suspend credit ratings or change the methodology by which securities are rated. Such changes may adversely affect the market price, liquidity and performance of NAB Capital Notes 4 or Ordinary Shares received on Conversion.

7.1.20 Regulatory classification

APRA has provided confirmation that NAB Capital Notes 4 qualify as Additional Tier 1 Capital under the Basel III Prudential Standards. However, if NAB subsequently determines that, as a result of a Regulatory Change, some or all NAB Capital Notes 4 are not or will not qualify in that category of regulatory capital (and NAB did not

expect this prior to the Issue Date), NAB may decide that a Regulatory Event has occurred. This will allow NAB to Convert, Redeem or Resell all or some NAB Capital Notes 4 (subject to certain conditions, including APRA's prior written approval) at NAB's discretion.

7.1.21 Australian tax

consequences

A general outline of the tax consequences of investing in NAB Capital Notes 4 for certain potential investors who are Australian residents for tax purposes is set out in the Australian taxation summary in Section

8. This discussion is in general terms and is not intended to provide specific advice addressing the circumstances of any particular potential investor.

Accordingly, potential investors should seek independent advice concerning their own individual tax position.

Broadly, NAB is entitled to Convert, Redeem or Resell all or some NAB Capital Notes 4 (subject to certain conditions, including APRA's prior written approval), if as a result of a change in law or administrative practice on or after the Issue Date in Australia (which NAB did not expect at the time of issue of NAB Capital Notes 4), there is a more than insubstantial risk that a Distribution would not be frankable (or would only be frankable subject to requirements which the Directors determine to be unacceptable) or that NAB would be exposed to an increase in taxes or other costs, which is not insignificant, in relation to NAB Capital Notes 4. See the description of a Tax Event in Section 2.4 for more information.

In relation to laws affecting Holders' entitlement to franking benefits, please see Section 7.1.8 for more information.

7.1.22 Shareholding limits and Eligible Nominee sales

The Financial Sector (Shareholdings) Act 1998 (Cth) restricts ownership by people (together with their associates) of an Australian bank, such as NAB, to a 20% stake. A Shareholder may apply to the Australian Treasurer to extend

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their ownership beyond 20%, but approval will not be granted unless the Treasurer is satisfied that a holding by that person greater than 20% is in the national interest.

Mergers, acquisitions and divestments of Australian public companies listed on the ASX (such as NAB) are regulated by detailed and comprehensive legislation and the rules and regulations of

the ASX. These provisions include restrictions on the acquisition and sale of relevant interests in certain shares in an Australian listed company under the Corporations Act and a requirement that acquisitions of certain interests in Australian listed companies by foreign interests are subject to review and approval by the Treasurer. In addition, Australian law also regulates acquisitions which would have the effect, or be likely to have the effect, of substantially lessening competition in a market.

Holders should take care to ensure that by acquiring any NAB Capital Notes 4 (taking into account any Ordinary Shares into which they may Convert), Holders do not breach any applicable restrictions on ownership.

Holders who do not wish to receive Ordinary Shares on Conversion may notify NAB of this no less than 15 Business Days prior to the Conversion Date. In addition, if you are a Foreign Holder, you will not receive Ordinary Shares on Conversion (unless NAB

is satisfied that it may issue them to you). NAB will treat you as a Foreign Holder if your address in the Register is a place outside of Australia or NAB otherwise believes you may not be a resident of Australia. If you are not to receive Ordinary Shares, the relevant number of Ordinary Shares will be issued to an Eligible Nominee (which must not be NAB or a Related Entity to NAB), on terms that the Eligible Nominee will sell the Ordinary Shares at the first reasonable opportunity and pay the proceeds of any sale to you (less brokerage and other costs). No guarantee is given in relation to the timing or price at which any sale will occur. Neither NAB nor the Eligible

Nominee has any duty to Holders in relation to the price at which Ordinary Shares are sold, nor any liability for any loss suffered by a Holder as a result of the sale of Ordinary Shares where required in the circumstances described above. Further, if a FATCA Withholding is required to be made in respect of Ordinary Shares to be issued on Conversion, NAB will only issue those Ordinary Shares to the Holder to the extent (if at all) that the issue of Ordinary Shares is net of FATCA Withholding. To the extent that a FATCA Withholding is required, NAB will issue the Ordinary Shares to an Eligible Nominee who will sell those Ordinary Shares on the basis outlined above and will deal with the proceeds of sale in accordance with FATCA.

See Section 7.1.26 for an explanation of circumstances in which a FATCA Withholding may be required.

7.1.23 NOHC Event

As described in Section 7.1.10, certain merger and acquisition activity in relation to NAB will constitute an Acquisition Event, as defined in the Terms. In this case, subject to certain conditions, NAB is required to Convert all NAB Capital Notes 4 in accordance with clauses 5 and 7 of the Terms.

However, certain events which would otherwise constitute Acquisition Events are categorised under the Terms as NOHC Events. Where a NOHC Event occurs and certain other conditions are satisfied, the NOHC Event will not trigger a Conversion of NAB Capital Notes 4. Instead, NAB will be permitted to make certain amendments to

the Terms in order to substitute the Approved NOHC as the issuer of the ordinary shares issued on Conversion (subject to APRA's prior written approval).

Accordingly, potential investors should be aware that, if a NOHC Event occurs and a substitution of the issuer of the ordinary shares on Conversion is effected under the Terms, Holders will be obliged to accept the Approved NOHC ordinary shares and will not receive Ordinary Shares of NAB on

Conversion. Potential investors should also be aware that Holders may not have a right to vote on any proposal to approve, implement or give effect to a NOHC Event.

At this time, NAB has made no decision to implement a NOHC structure.

In the event that a NOHC Event were to occur, NAB would continue to be regulated by APRA. However, depending on the structure of the acquirer following a NOHC Event and the capital framework which APRA determines to apply to it, the composition of NAB's capital measurement levels may be affected, which in turn may affect NAB's ability to pay Distributions on NAB Capital Notes 4.

After a NOHC Event Holders will remain note holders in NAB with the same rights to distributions and to payment in a winding up of NAB as before

the NOHC Event, but on Conversion Holders will receive ordinary shares in the Approved NOHC and not Ordinary Shares in NAB. NAB Capital Notes 4 should remain quoted on ASX, but Ordinary Shares will cease to be quoted.

Where a NOHC Event is accompanied by a transfer of assets from NAB or a subsidiary to the Approved NOHC or another subsidiary of the Approved NOHC, NAB may as a result have reduced assets which may affect its credit rating and the likelihood Holders will receive their claims in full if NAB is wound up. Holders do not have any claim on the assets of the Approved NOHC or any other subsidiary of the Approved NOHC other than following Conversion as a holder of ordinary shares in the Approved NOHC.

Where an Approved NOHC is substituted as the issuer of ordinary shares on Conversion, there is no restriction on the Approved NOHC declaring or paying a dividend on or, buying back or reducing capital on its ordinary shares if NAB does not pay a Distribution on a NAB Capital Note 4 (see Section 7.1.23).

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7.1.24 Relevant provisions of the Banking Act, powers of a statutory manager and APRA secrecy rules

In certain circumstances APRA may appoint a statutory manager (a Banking Act statutory manager) to take control of the business of an ADI, such as NAB. Those circumstances are set out in the Banking Act and include (but are not limited to):

where the ADI becomes unable to meet its obligations or suspends payment;
where the ADI informs APRA that it is likely to become unable to meet its obligations, or is about to suspend payment;
where APRA considers that, in the absence of external support:
- the ADI may become unable to meet its obligations;
- the ADI may suspend payment;
- it is likely that the ADI will be unable to carry on banking business in Australia consistently with the interests of its depositors;
- it is likely that the ADI will be unable to carry on banking business in Australia consistently with the stability of the financial system in Australia; or
where, in certain circumstances, the ADI is in default of compliance with a direction by APRA to comply with the Banking Act or regulations made under it and the Federal Court authorises APRA to assume control of, and to carry on, the ADI's business.

The powers of a Banking Act statutory manager include the power to alter an ADI's constitution, to issue, cancel or sell shares (or rights to acquire shares) in the ADI and to vary or cancel rights or restrictions attached to shares in a class of shares in the ADI. A Banking Act statutory manager is authorised to do so despite the Corporations Act, the ADI's constitution, any contract or arrangement to which the ADI is party or the ASX Listing Rules. The Banking Act statutory manager may also dispose of the whole or part of an ADI's

business. In the event that a Banking Act statutory manager is appointed to NAB in the future, these broad powers of a Banking Act statutory manager may be exercised in a way which adversely affects the rights attaching to NAB Capital Notes 4 and the position of Holders.

APRA may, in certain circumstances, require NAB to transfer all or part of its business to another entity under the Financial Sector (Transfer and Restructure) Act 1999 (Cth) ("FSTR Act").

A transfer under the FSTR Act overrides anything in any contract or agreement to which NAB is party and thus may have an adverse effect on NAB's ability to comply with its obligations under NAB Capital Notes 4 and the position of Holders.

In addition, Holders should be aware that secrecy obligations may apply to action taken by APRA. This means that information about action taken by APRA (including in exercise of its powers under the Banking Act) may not be publicly disclosed.

7.1.25 Amendment of Terms

NAB may, with APRA's prior written approval where required, amend the Terms and the NAB Capital Notes 4 Deed Poll without the approval of Holders. The amendments include those necessary or expedient to dates and time periods to facilitate any Conversion, Redemption or Resale or any change which NAB considers will not be materially prejudicial to the interests of Holders as a whole. See Section 2.9 "Amendment of Terms" and clause 18.1 of the Terms for a more detailed list of the types of amendments NAB may make to the Terms without the approval of Holders. NAB may also, with APRA's prior written approval where required, amend the Terms if the amendment has been approved by a Special Resolution of Holders. Amendments under these powers are binding on all Holders despite the fact that a Holder may not agree with the amendment. APRA's prior written approval to amend the Terms is required only where the

amendment may affect the eligibility of NAB Capital Notes 4 as Additional Tier 1 Capital. The Holders may not by any resolution take any action which affects the eligibility of NAB Capital Notes 4 as Additional Tier 1 Capital without APRA's prior written approval.

7.1.26 Holders may be subject to FATCA withholding and information reporting

It is possible that, in order to comply with FATCA, NAB (or if NAB Capital Notes 4 are held through another financial institution, such other financial institution) may be required (pursuant to an agreement with the US Internal Revenue Service ("IRS") or under applicable law) to request certain information from Holders or beneficial owners of NAB Capital Notes 4, which information may be provided to the IRS, and to withhold US tax on some portion of payments made after the implementation date of the relevant U.S. regulations with respect to NAB Capital Notes 4 if such information is not provided or if payments are made to certain foreign financial institutions that have not entered into a similar agreement with the IRS (and are not otherwise required to comply with the FATCA regime under applicable laws or are otherwise exempt from complying with the requirement to enter into a FATCA agreement with the IRS). If NAB or any other person is required to withhold amounts under or in connection with FATCA from any payments made in respect of NAB Capital Notes 4, Holders and beneficial owners of NAB Capital Notes 4 will not be entitled to receive any gross up or additional amounts to compensate them for such withholding. This description is based on guidance issued to date by the IRS, including recently issued regulations. Future guidance may affect the application of FATCA to NAB Capital Notes 4.

7.1.27 Design and

distribution obligations

On 5 April 2019, the DDOPIP Legislation came into force. The DDOPIP Legislation imposes additional

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obligations on NAB regarding the design and distribution of certain financial products offered to retail investors (including hybrid securities), and grants product intervention powers to ASIC if it believes significant consumer detriment may occur. The DDOPIP Legislation is supplemented by the Corporations Amendment (Design and Distribution Obligations) Regulations 2019 ("DDOPIP Regulations"), which were enacted in December 2019.

The DDOPIP Legislation provides for the design and distribution obligations to come into force in April 2021 and therefore these obligations do not apply to the Offer. Similarly, the DDOPIP Regulations come into force in April 2021 and do not apply to the Offer. The design and distribution obligations in the DDOPIP Legislation are also limited to an initial offering of securities, which means that even if the obligations become effective while NAB Capital Notes 4 are on issue, they will not apply to secondary market trading of NAB Capital Notes 4.

The DDOPIP Legislation gives ASIC a significant, proactive power to issue a product intervention order if it believes that a financial product has resulted in or will, or is likely to, result in significant detriment to retail clients or customers. It is uncertain whether ASIC would perceive significant consumer detriment in relation to NAB Capital Notes 4 or similar securities. The DDOPIP Legislation requires ASIC to undertake a consultation process before it makes a product intervention order.

In December 2019, ASIC released draft regulatory guidance in respect of the design and distribution obligations and opened consultation on its proposed guidance. The consultation process closes in March 2020 and the final form of the regulatory guidance is expected to be released in the course of 2020.

As noted at section 7.1.5, the impact of these new obligations remains untested, however there is a risk that they may adversely impact the

issue, distribution and reinvestment of financial products in the future, including instruments like NAB Capital Notes 4. These changes may also affect the liquidity of funding instruments (including hybrids such as NAB Capital Notes 4), if they lead to a material reduction in future issuance volumes or secondary trading activity by investors.

7.2 Risks specific to the Group

Set out below are the principal risks and uncertainties associated with NAB and the Group. It is not possible to determine the likelihood of these risks occurring with any certainty. However, the risk in each category that NAB considers most material is listed first, based on the information available at the date of this Prospectus and NAB's best assessment of the likelihood of each risk occurring and potential magnitude of the negative impact to the Group should such risk materialise. In the event that one or more of these risks materialise, the Group's reputation, strategy, business, operations, financial condition and future performance could be materially and adversely impacted.

The Group's risk management framework and internal controls may not be adequate or effective in accurately identifying, evaluating or addressing risks faced by the Group. There may be other risks that are currently unknown or are deemed immaterial, but which may subsequently become known or material. These may individually or in aggregate adversely impact the Group. Accordingly, no assurances or guarantees of future performance, profitability, distributions or returns of capital are given by the Group.

7.2.1 Strategic Risk

Strategic risk is the risk associated with the pursuit of the Group's strategic objectives including the risk that

the Group fails to execute its chosen strategy effectively or in a timely manner.

7.2.1.1 Strategic initiatives may fail to be executed, may not deliver all anticipated benefits and may change the Group's risk profile.

The Group's corporate strategy sets its purpose, vision and objectives, and focuses on:

Becoming the best business bank.
Simplifying the Group's business to improve efficiency and better service its customers.
Pursuing new and emerging growth opportunities.
Attracting and developing people to create a high performing culture.

The Group prioritises, and invests significant resources in, the execution of initiatives that are aligned to its strategy, including transformation and change programs. These programs focus on technology, infrastructure, business improvement and cultural transformation. There is a risk that these programs may not realise some or all of their anticipated benefits, including the improvement of the risk and control environment. These programs may also increase operational, compliance and other risks. Any failure by the Group to deliver in accordance with its strategy or to deliver these strategic programs effectively, may result in material losses to the Group, or a failure to achieve anticipated benefits, and ultimately, may adversely impact the Group's operations and financial performance and position.

7.2.1.2 The Group faces intense competition.

There is substantial competition across the markets in which the Group operates. The Group faces competition from established financial services providers as well as new market entrants, including foreign banks and non-bank competitors with lower costs and new operating and business models. In addition, evolving industry trends and rapid technology changes may impact customer needs and preferences and the Group may not predict these changes accurately or

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quickly enough, or have the resources and flexibility to adapt in sufficient time to meet customer expectations and keep pace with competitors.

The Australian Federal Government (the Australian Government) passed legislation in August 2019 to establish a 'Consumer Data Right' which seeks to improve consumers' ability to compare and switch between products and services. It is proposed to apply to the banking sector from July 2020. These reforms (referred to as 'Open Banking') are expected to reduce the barriers

to new entrants into, and increase competition in, the banking industry in Australia. Progress is also being made towards Open Banking in New Zealand ("NZ").

Ongoing competition for customers can lead to compression in profit margins and loss of market share, which may ultimately impact on the Group's financial performance and position, profitability and returns to investors.

7.2.1.3 The Group's intended divestment of its Advice, Platform & Superannuation and Asset Management businesses may not proceed and there are risks in executing the divestment.

The Group intends to divest its advice, platform & superannuation and asset management businesses ("MLC Wealth Divestment"). The Group's decision to proceed with, and its ability to execute, the MLC Wealth Divestment is subject to a number of factors, including market conditions, the impact of regulatory change and investigations (including any implications of the findings of the Final Report of the Royal Commission released on 4 February 2019), the cost and complexity of separation, and obtaining Board and regulatory approvals.

If the Group does proceed with the MLC Wealth Divestment, it will incur costs associated with the transaction. In addition, the MLC Wealth Divestment will result in the Group exiting a financial services market and accordingly will decrease the size of

the Group's operations. This will have a consequential impact on the Group's revenues and potentially its profitability and returns to investors.

If the Group decides not to, or is unable to, proceed with the MLC Wealth Divestment, it will still incur costs that it is unable to recover. In addition, the terms of the MLC Wealth Divestment, and the execution of its separation may create risks and uncertainty for the Group and its customers, aligned advisers, employees, suppliers and other counterparties.

7.2.1.4 Risks may arise from pursuing acquisitions and divestments.

The Group regularly considers a range of corporate opportunities, including acquisitions, divestments, joint ventures and investments.

Pursuit of corporate opportunities inherently involves transaction risks, including over-valuation of an acquisition or investment or under-valuation of a divestment, and exposure to reputational damage. The Group may encounter difficulties in integrating or separating businesses, including failure to realise expected synergies, disruption to operations, diversion of management resources or higher than expected costs. These risks and difficulties may ultimately have an adverse impact on the Group's financial performance and position.

The Group may incur unexpected financial losses following an acquisition, joint venture or investment if the business it invests in does

not perform as planned or causes unanticipated changes to the Group's risk profile. Additionally, there can be no assurance that employees, counterparties, suppliers, customers and other relevant stakeholders will remain with an acquired business following the transaction and any failure to retain such stakeholders may have an adverse impact on the Group's overall financial performance and position.

The Group may also have ongoing exposures to divested businesses, including through the provision of continued services and infrastructure

or an agreement to retain certain liabilities of the divested businesses through warranties and indemnities, which may have an adverse impact on the Group's business and financial performance and position.

In particular, specific risks exist in connection with the sale of 80% of MLC to Nippon Life Insurance Company ("Nippon Life") in 2016. NAB gave certain covenants, warranties and indemnities in favour of Nippon Life and MLC, a breach or triggering of which may result in NAB being liable to Nippon Life or MLC.

The parties also entered into long- term agreements for the distribution of life insurance products and the continued use of the MLC brand

by MLC. The duration and nature of these agreements give rise to certain risks, including that changes in the regulatory or commercial environment impact the commercial attractiveness of these agreements. These agreements also limit future opportunities for NAB through non- compete arrangements.

NAB agreed to take certain actions to establish MLC as a standalone entity, including the provision of transitional services, as well as support for data migration activities and the development of technology systems. As this work is yet to be completed, there is a risk that implementation costs may ultimately prove higher than anticipated. NAB may also be liable to MLC or Nippon Life if it fails to perform its obligations in accordance with the agreements relating to these matters. If implementation costs are higher than expected, or if NAB fails to perform its obligations in accordance with the relevant agreements, there may be an adverse impact on the Group's financial performance and position.

7.2.2 Credit Risk

Credit risk is the risk that a customer will fail to meet its obligations to the Group in accordance with agreed terms. Credit risk arises from both the Group's lending activities and markets and trading activities.

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A decline in the residential property market may give rise to higher losses on defaulting loans.
Lending activities account for most of the Group's credit risk. The Group's lending portfolio is largely based in Australia and NZ. Residential housing loans and commercial real estate loans constitute a material component of the Group's total gross loans and acceptances. A decline in the value of residential property has been observed in some areas in Australia. A range
of factors could contribute to further declines in residential property prices. This includes regulatory changes which may impact the availability
of credit, shifts in government policies that are less favourable to immigration and overseas investment, changes to taxation policy and rising unemployment. If this occurs, the declining value of the residential property used as collateral (including in business lending) may give rise to greater losses to the Group resulting from customer defaults, which, in turn, may impact the Group's financial performance and position, profitability and returns to investors. The most significant impact is likely to be experienced by residential mortgage customers in high loan-to-value-ratio brackets.
Adverse business conditions in Australia and NZ, particularly in the agriculture sector, the consumer facing sector, or both, may give rise to increasing customer defaults.
The Group has a large share of the business lending market in Australia and NZ. Should adverse business conditions lead to defaults by business customers in these markets, the Group may experience an adverse impact on its financial performance and position.

Specifically, the Group has a large market share in the Australian and NZ agricultural sectors, particularly the dairy sector in NZ. Volatility in commodity prices, milk prices, foreign exchange rate movements, disease and introduction of pathogens and pests, export and quarantine restrictions, and extreme weather events may negatively impact these sectors. This may result

in increased losses to the Group from customer defaults, and ultimately may have an adverse impact on the Group's financial performance and position.

Customers of the Group whose businesses are in consumer facing industries are also confronting challenges including high levels of household debt, low wage growth and the recent volatility in house prices weighing on consumer confidence and impacting their business' performance. These factors may give rise to an increase in customer defaults, ultimately affecting the Group's financial performance and position, profitability and returns to investors.

7.2.2.3 Climate change and extreme climate patterns may lead to increasing customer defaults and may decrease the value of collateral.

Credit risk may arise as a result of climate change, including extreme weather and climate change related events affecting property values or business operations, the effect of new laws and government policies designed to mitigate climate change, and the impact on certain customer segments as the economy transitions to renewable and low-emission technology. There is a risk of increased levels of customer default in affected business sectors. The impact of this on the Group may be exacerbated by a decline in the value and liquidity of assets held by the Group as collateral in these sectors, which may impact the Group's ability to recover under defaulting loans.

For example, parts of Australia are experiencing severe drought conditions and bushfires. The impact of these is expected to be widespread extending beyond primary producers, to customers who are suppliers to the agricultural sector, and to those who reside in and operate businesses within regional and fire impacted communities. Extreme weather events and other climate patterns in other parts of Australia may have similar impacts on other business sectors. These impacts may increase current levels of customer defaults, thereby increasing the credit risk facing the

Group and adversely impacting the Group's financial performance and position, profitability and returns to investors.

The Group's losses may differ materially from its provisions which may impact its financial performance and position.
The Group provides for expected losses from loans, advances and other assets. Estimating losses in the loan portfolio is, by its very nature, uncertain. The accuracy of these estimates depends on many factors, including general economic conditions, forecasts and assumptions, and involves complex modelling and judgements. If the assumptions upon which these assessments are made prove to be inaccurate, the provisions for credit impairment may need to be revised. This may adversely impact the Group's financial performance and position.
The Group may be adversely impacted bymacro-economic and geopolitical risks and financial market conditions which pose a credit risk.
The majority of the Group's businesses operate in Australia and NZ, with branches currently located in Asia, the United Kingdom ("UK") and the United States ("US"). A further banking subsidiary is expected to be established in Paris (subject to regulatory approval). Levels of borrowing are heavily dependent on customer confidence, employment trends, market interest rates, and other economic and financial market conditions and forecasts most relevantly for the Group in Australia and NZ, but also in the global locations in which the Group operates.

Domestic and international economic conditions and forecasts are influenced by a number of macro-economic factors, such as: economic growth rates; cost and availability of capital; central bank intervention; inflation and deflation rates; level of interest rates; yield curves; market volatility; and uncertainty. Deterioration in any of these factors may lead to the following negative impacts on the Group:

Increased cost of funding or lack of available funding.

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Deterioration in the value and liquidity of assets (including collateral).
Inability to price certain assets.
An increase in customer or counterparty default and credit losses.
Higher provisions for credit impairment.
Mark-to-marketlosses in equity and trading positions.
Lack of available or suitable derivative instruments for hedging purposes.
Lower growth in business revenues and earnings.
Increased cost of insurance, lack of available or suitable insurance, or failure of the insurance underwriter.

Economic conditions may also be impacted by climate change and major shock events, such as natural disasters, war and terrorism, political and social unrest, and sovereign debt restructuring and defaults.

The following macro-economic and financial market conditions are currently of most relevance to the credit risk facing the Group and may give rise to slower revenue growth and/or increasing customer defaults:

Global economic growth is trending downwards which may create credit risk for the Group. The Group's key markets of Australia and NZ are small, open economies where national income (and with it, the capacity for businesses and households to service debt) is impacted by global trends. The current global economic cycle peaked in early 2018 and growth has slowed since this time, in part due to fading fiscal stimulus, the impact ofUS-China trade tensions, and tighter monetary policy (through to the end of 2018) in the US, Canada and the UK, among other jurisdictions.
In response to weakening growth, some central banks, including the Reserve Bank of Australia and the US Federal Reserve, have eased monetary policy. Given extremely low policy rates in some countries, any further policy easing may involve additional asset purchases

(quantitative easing) or other unconventional policy tools. Policy easing would be expected to reduce short-term downside risks to growth, but risks building on existing imbalances in various asset classes and regions. Policy easing may also reduce the impetus for highly geared borrowers to deleverage thereby increasing the credit risk posed to the Group by these highly geared customers.

As a key trading partner, China's economic growth is important to Australia and NZ, with export income and business investment exposed to any sharp slowdown in the rapid pace of Chinese economic growth. China's high and growing debt burden presents a risk to itsmedium-term growth prospects. Due to its export mix, Australia's economy is exposed to any sudden downturn in China's domestic investment in business, infrastructure or housing. Any such downturn could therefore have a negative impact on the Group's customers who are exposed to these sectors, and may give rise to increasing levels of customer defaults. In addition, China's economic outlook is facing uncertainty due to the Coronavirus outbreak. Measures introduced to limit transmission of the virus will have a negative impact on China's economic growth, with potential negative impacts for other countries (particularly in East Asia, Australia, and NZ).
Trade tensions between the US and China continue to present risks to global economic growth. Although the two countries have agreed to a partial trade deal that should ease these tensions, the bulk of tariffs imposed by both countries remain in place and further trade measures remain possible. Although China is the primary target of US trade measures, value chain linkages mean that other emerging markets, primarily in Asia, are also exposed. A number of emerging markets in East Asia are major trading partners with Australia and NZ and accordingly a negative impact on their economies

may increase the credit risk facing the Group.

Geopolitical risks continue to present uncertainty to the global economic outlook, with negative impacts on consumption and business investment. An increasing fragmentation of, and a rise in populism in, many major democratic economies have led to difficulties in policy implementation. Protests in Hong Kong are creating political tensions between the Hong Kong Special Administrative Region and mainland China. While the path towards Brexit has greater clarity following the December 2019 UK general election, the prospect of an economically damaging "hard" Brexit remains a risk. In addition, there are a range of other geopolitical risks, particularly given the ongoing uncertainty around the Middle East, the Korean Peninsula and the South China Sea.
Australia's economic growth slowed in 2019, which is largely a reflection of weakness in household demand. Wages growth has been weak, and if the slowdown in growth persists, unemployment is expected to rise.
NZ's economic growth has also slowed. A continued slowdown in economic growth in Australia and NZ and any resulting increase in unemployment may negatively impact debt servicing levels, increase customer defaults and negatively impact the Group's financial performance and position and its profitability.
As commodity exporting economies, Australia and NZ are exposed to shifts in global commodity prices that can be sudden, sizeable and difficult to predict. Fluctuations in commodity markets can affect key economic variables like national income tax receipts and exchange rates. Previous sharp declines in commodity prices in Australia and NZ were driven bysub-trend global growth constraining demand, combined with increases in commodity supply. Commodity price volatility remains substantial and given the Group's sizeable exposures to commodity producing and trading

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businesses, this volatility poses a significant source of credit risk to the Group.

7.2.3. Market Risk

Market risk is the risk of loss from the Group's trading activities. The Group may suffer losses as a result of a change in the value of the Group's positions in financial instruments or their hedges due to adverse movements in market prices. Adverse price movements impacting the Group may occur in credit spreads, interest rates, foreign exchange rates, and commodity and equity prices, in particular during periods of heightened market volatility or reduced liquidity.

Credit spread risk is the risk of the Group's trading book being exposed to movements in the value of securities and derivatives as the result of changes in the perceived credit quality of the underlying company. Credit spread risk accumulates in the Group's trading book when it provides risk transfer services to customers seeking to buy or sell fixed income securities (such as corporate bonds). The Group may also be exposed to credit spread risk when holding an inventory of fixed income securities in anticipation of customer demand or undertaking market-making activity (i.e. quoting buy and sell prices to clients) in fixed income securities.

Interest rate risk is the risk of the Group's trading book being exposed to changes in the value of securities and derivatives as the result of changes in interest rates. The Group's trading book accumulates interest rate risk when the Group provides interest rate hedging solutions for clients, holds interest rate risk in anticipation of customer requirements or undertakes market-making activity in fixed income securities or interest rate derivatives.

The occurrence of any event giving rise to a material trading loss may have a negative impact on the Group's financial performance and financial position.

7.2.4. Balance Sheet and Liquidity Risk

Balance sheet and liquidity risk comprises key banking book structural risks of the Group, such as liquidity risk, funding risk, interest rate risk, capital risk and foreign exchange risk.

7.2.4.1 The Group is exposed to funding and liquidity risk.

Funding risk is the risk that the Group is unable to raise short and long-term funding to support its ongoing operations, strategic plans and objectives. The Group accesses domestic and global capital markets to help fund its business, in addition to using customer deposits. Dislocation in any of these capital markets, reduced investor interest in the Group's securities and/or reduced customer deposits, may adversely affect the Group's funding and liquidity position, increase the cost of obtaining funds or impose unfavourable terms on the Group's access to funds, constrain the volume of new lending, or adversely affect the Group's capital position.

Liquidity risk is the risk that the Group is unable to meet its financial obligations as they fall due. These obligations include the repayment of deposits on demand or at their contractual maturity, the repayment of wholesale borrowings and loan capital as it matures, the payment of interest on borrowings and the payment of operational expenses and taxes. The Group must also comply with prudential and regulatory liquidity obligations across the jurisdictions

in which it operates. Any significant deterioration in the Group's liquidity position may lead to an increase in the Group's funding costs, constrain the volume of new lending, result in the Group drawing upon its committed liquidity facility with the Reserve Bank of Australia or cause the Group to breach its prudential or regulatory liquidity obligations. This may adversely impact the Group's reputation and financial performance and position.

7.2.4.2 The Group's capital position may be constrained by prudential requirements.

Capital risk is the risk that the Group does not hold sufficient capital and reserves to cover exposures and to protect against unexpected losses. Capital is the cornerstone of the Group's financial strength. It supports an ADI's operations by providing a buffer to absorb unanticipated losses from its activities.

Compliance with prudential capital requirements in the jurisdictions in which the Group operates and any further changes to these requirements may:

Limit the Group's ability to manage capital across the entities within the Group.
Limit payment of dividends or distributions on shares and hybrid instruments.
Require the Group to raise more capital (in an absolute sense) or raise more capital of higher quality.
Restrict balance sheet growth.

Additionally, if the information or the assumptions upon which the Group's capital requirements are assessed prove to be inaccurate, this may adversely impact the Group's operations, and financial performance and position.

7.2.4.3 A significant downgrade in the Group's credit ratings may adversely impact its cost of funds and capital market access.

Credit ratings are an assessment of a borrower's creditworthiness and may be used by market participants in evaluating the Group and its products, services and securities. Credit rating agencies conduct ongoing review activities, which can result in changes to credit rating settings and outlooks for the Group, or sovereign jurisdictions where the Group conducts business. Credit ratings may be affected by operational and market factors, or changes in the credit rating agency's rating methodologies.

A downgrade in the credit ratings or outlook of the Group, the Group's

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securities, or the sovereign rating of one or more of the countries in which the Group operates, may increase the Group's cost of funds or limit access to capital markets. This may also cause a deterioration of the Group's liquidity position and trigger additional collateral requirements in derivative contracts and other secured funding arrangements. A downgrade to the Group's credit ratings relative to peers may also adversely impact the Group's competitive position and financial performance and position.

The Group's financial performance and capital position may be adversely impacted by interest rate fluctuations.
Interest rate risk is the risk to the Group's financial performance and capital position caused by changes in interest rates. Factors which may affect the level of interest rate risk include all on-balance sheet and off-balance sheet items that create an interest rate risk exposure within the Group. As interest rates and yield curves change over time, including negative interest rates in certain countries in which the Group operates, the Group may be exposed to a loss in earnings and economic value due to the interest rate profile of its balance sheet. Such exposure may arise from a mismatch between the maturity profile of the Group's lending portfolio compared to its deposit portfolio (and other funding sources), as well as the extent to which lending and deposit products can be repriced as interest rates approach zero or become negative, thereby impacting net interest margin.
The Group may fail to or

be unable to sell down its underwriting risk.

As financial intermediaries, members of the Group underwrite or guarantee different types of transactions, risks and outcomes, including the placement of listed and unlisted debt, equity- linked and equity securities. The underwriting obligation or guarantee may be over the pricing and placement of these securities, and the Group may therefore be exposed to potential

losses, which may be significant, if it fails to sell down some or all of this risk to other market participants.

7.2.4.6 The value of the Group's banking book may be adversely impacted by foreign exchange rates.

Foreign exchange and translation risk arises from the impact of currency movements on the value of the Group's cash flows, profits and losses, and assets and liabilities due to participation in global financial markets and international operations.

The Group's ownership structure includes investment in overseas subsidiaries and associates which gives rise to foreign currency exposures, such as repatriation of capital and dividends. The Group also conducts business outside of Australia and transacts with customers, banks and other counterparties in a number of different currencies. The Group's businesses may therefore be affected by a change in currency exchange rates, or a change in the reserve status of any of these currencies.

The Group's financial statements are prepared and presented in Australian dollars, and any adverse fluctuations in the Australian dollar against other currencies in which the Group invests or transacts and generates profits (or incurs losses) may adversely impact its financial performance and position.

7.2.5. Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or external events. This includes legal risk, but excludes strategic and reputation risk.

7.2.5.1 Disruption to technology may adversely impact the Group's reputation and operations.

Most of the Group's operations depend on technology, and therefore the reliability and security of the Group's information technology systems and infrastructure are essential to the effective operation of its business and consequently to its financial performance and position.

The reliability of technology may be impacted by the complex technology environment, failure to keep technology systems up-to-date, an inability to restore or recover systems in acceptable timeframes, or a physical or cyber-attack.

The rapid evolution of technology in the financial services industry and the increased expectation of customers for internet and mobile services on demand expose the Group to new operational challenges.

Any disruption to the Group's technology (including disruption to the technology systems of the Group's external providers) may be wholly or partially beyond the Group's control and may result in: operational disruption; regulatory enforcement actions; customer redress; litigation; financial losses; theft or loss of customer data; loss of market share; loss of property or information; or may adversely impact the speed and agility in the delivery of change and innovation.

In addition, any such disruption may adversely affect the Group's reputation, including the view of regulators or ratings agencies, which may result

in loss of customers, a reduction in share price, ratings downgrades and regulatory censure or penalties. Social media commentary may further exacerbate such adverse outcomes for the Group and negatively impact the Group's reputation.

7.2.5.2 Privacy, security and data breaches may adversely impact the Group's reputation and operations.

The Group processes, stores and transmits large amounts of personal and confidential information through its technology systems and networks. Threats to information security are constantly evolving and techniques used to perpetrate cyber-attacks are increasingly sophisticated.

The Group may not be able to anticipate a security threat, or be able to implement effective measures to prevent or minimise the resulting damage. As with other business

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activities, the Group uses select external providers (in Australia and overseas) to store confidential data and to develop and provide its technology services, including the increasing use of cloud infrastructure.

A breach of the security at any of these external providers or within the Group may be wholly or partially beyond the control of the Group and may result in theft or loss of customer data, a breach of privacy laws and subsequent regulatory enforcement actions, customer redress, litigation, or financial losses. This may adversely impact the financial performance and position of the Group.

In addition, any such breach may adversely affect the Group's reputation, including the view of regulators or ratings agencies, which may result

7.2.5.3 Deficient policies, processes, infrastructure and models give rise to a significant risk to the Group's operations.

The Group's business involves the execution of a large number of processes and transactions with varying degrees of complexity. The Group is reliant on its policies, processes and supporting infrastructure functioning as designed, along with third parties appropriately managing their own operational risk and delivering services to the Group as required. A failure in the design or operation of these policies, processes and infrastructure, failure of the Group to manage external service providers, or the disablement of a supporting system all pose a significant risk to the Group's operations and consequently its financial performance and reputation. Reputational damage may adversely impact the Group's ability to attract and retain customers or employees in the short and long- term and the ability to pursue new

business opportunities. Reputational damage may also result in a higher risk premium being applied to the Group, and impact the cost of funding the Group's operations or its financial condition. Further, reputational damage may result in regulators requiring the Group to hold additional capital, pay fines or incur additional costs, including costs to undertake remedial action. These impacts may affect the viability of some or all of the Group's business activities.

Models are used extensively in the conduct of the Group's business, for example, in calculating capital requirements and measuring and stressing exposures. If the models used prove to be inadequate or are based on incorrect or invalid assumptions, judgements or inputs, this may adversely affect the Group's financial performance and position.

The Group is exposed to the risk of human error.
The Group's business, including the internal processes and systems that assist in business decisions, relies on inputs from its employees, agents and third party vendors. The Group is exposed to operational risk due to process or human errors including incorrect or incomplete data capture and records maintenance, incorrect or incomplete documentation to support activities, or inadequate design of processes or controls. The Group uses select external providers (in Australia and overseas) to provide services to the Group and is exposed to similar risks arising from such failures in the operating environment of its external providers. The materialisation of any of these risks could lead to direct financial loss, loss of customer, employee or commercially sensitive data, regulatory penalties and reputational damage.
The Group may not be able to attract and retain suitable personnel.
The Group is dependent on its ability to attract and retain key executives, employees and Directors with a deep understanding of banking and technology, who are qualified to

execute the Group's strategy, as well as the technology transformation the Group is undertaking to meet the changing needs of its customers. Weaknesses in employment practices, including diversity, discrimination and workplace health and safety, are sources of operational risk that can impact the Group's ability to attract and retain qualified personnel with the requisite knowledge, skills and capability.

The Group's capacity to attract and retain key personnel is dependent on its ability to design and implement effective remuneration structures. This process may be constrained by regulatory requirements (particularly in the highly regulated financial services sector), as well as investor expectations, which may be somewhat disparate.

The unexpected loss of key resources or the inability to attract personnel with suitable experience may adversely impact the Group's ability to operate effectively and efficiently, or to meet the Group's strategic objectives.

7.2.5.6 External events may adversely impact the Group's operations.

Operational risk can arise from external events such as natural disasters, biological hazards or acts of terrorism. The Group has branches in regional areas in Australia that are prone to seasonal natural disasters, including fires and floods.

In addition, the Group has branches and office buildings in Christchurch and Wellington in NZ, which have experienced significant earthquakes and aftershocks in recent years and which may be exposed to the risk of future earthquakes.

Given the Group's physical presence in the central business districts of major cities including Australia, NZ and other countries where it has, or is intending to establish, offshore operations, it may also be exposed to the risk of a terrorist attack.

External events such as natural disasters, biological hazards and acts of terrorism may cause property damage

92| NAB Capital Notes 4

and business disruption, which may adversely impact the Group's financial performance. In addition, if the Group is unable to manage the impacts of such external events, it may lead to reputational damage and compromise the Group's ability to provide a safe workplace for its personnel.

7.2.6 Compliance Risk

Compliance risk is the risk of failing to understand and comply with relevant laws, regulations, licence conditions, supervisory requirements, self- regulatory industry codes of conduct and voluntary initiatives.

7.2.6.1 The Group may be involved in a breach or alleged breach of laws governing bribery, corruption and financial crime.

Supervision, regulation and enforcement of anti-bribery and corruption, anti-money laundering, counter-terrorism financing,

and international sanctions laws (collectively referred to as "AML/ CTF") has increased. In June 2018, Australia's financial intelligence agency, AUSTRAC, reached an agreement with another major Australian bank for

a A$700 million penalty relating to serious breaches of AML/CTF laws. In November 2019, AUSTRAC commenced proceedings against a different major Australian bank alleging significant breaches of AML/CTF laws.

The Group has reported a number of AML/CTF compliance breaches to relevant regulators and has responded to a number of requests from regulators requiring the production of documents and information. The Group is currently investigating

and remediating a number of AML/CTF compliance issues. The potential outcome and total costs associated with these investigations and remediation processes remain uncertain. A negative outcome to any investigation or remediation process may adversely impact the Group's reputation and its business, financial position and results of operations. Further, given the large volume of transactions that the Group processes,

the undetected failure of internal AML/CTF controls, or the ineffective implementation or remediation of compliance issues, could result in a significant number of breaches of AML/CTF obligations and significant monetary penalties for the Group.

Refer to 'Notes to the Financial Statements', Note 29 Contingent

liabilities and credit commitments on page 146 in the Annual Financial Report 2019 under the heading 'Regulatory activity, compliance investigations and associated proceedings - Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) program uplift and compliance issues' for more information.

7.2.6.2 Matters arising during the Royal Commission may result in legal proceedings against the Group.

The Royal Commission has referred two matters to APRA regarding the conduct of the Group's superannuation trustee, NULIS Nominees (Australia) Ltd ("NULIS"), being issues related to the maintenance of grandfathered commissions following a successor fund transfer in 2016; and the transfer of accrued deposit amounts to MySuper. It is possible that APRA may bring proceedings against NULIS in relation to these matters. In addition, class actions in relation to these two matters have been commenced. Litigation funder IMF Bentham and William Roberts Lawyers commenced a class action against NULIS alleging breaches of NULIS' trustee duties relating to the grandfathered commissions issue. In January 2020, Maurice Blackburn commenced a class action against NULIS and MLCN alleging breaches of trustee obligations in connection with the MySuper issue. The potential outcome and total costs associated with these matters remain uncertain.

The Royal Commission also referred other instances of potential misconduct, including issues related to "fees for no service" by unidentified institutions to ASIC for consideration.

ASIC has commenced civil proceedings against the Group in respect of two

issues that were examined by the Royal Commission. The first concerns NAB's 'Introducer Program', in respect of which ASIC has alleged contraventions of the National Consumer Credit Protection Act 2009 (Cth) in relation to 297 loan applications that were made between 2013 and 2016. The second relates to alleged breaches in respect of ongoing fee arrangements with clients of NAB Financial Planning. The potential outcome and total costs associated with these matters remain uncertain.

ASIC may bring further proceedings against the Group in relation to other issues examined or commented on by the Royal Commission, which may result in the imposition of civil or criminal penalties on the Group. Class actions or other civil litigation may also be brought against the Group.

It is also possible that legal actions may be commenced against relevant individuals within the Group.

Any damages awards or penalties may adversely impact the Group's reputation and financial performance and position. Refer to 'Notes to

the Financial Statements', Note

29Contingent liabilities and credit commitments on pages143-148in the Annual Financial Report 2019 for more information.

7.2.6.3 Responsible lending obligations are evolving and may create additional operational complexity for the Group.

The responsible lending obligations applicable to the Group under the National Consumer Credit Protection Act (Cth) ("NCCP Act") have evolved in recent years. In December 2019, ASIC released Regulatory Guide

209, which sets out ASIC's views on what the responsible lending obligations in chapter 3 of the NCCP Act require. Changes to responsible lending obligations, including their interpretation by the courts, or any increased regulatory and public scrutiny, may require the Group to change its consumer lending processes or procedures. This, in turn, may lead to additional operational complexity

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for the Group, as well as increased costs, which may adversely impact the Group's financial performance and position.

7.2.6.4 Ensuring compliance with laws and regulations that apply to the Group is complex and costly.

The Group is highly regulated and subject to various regulatory regimes which differ across the jurisdictions in which it operates, trades or raises funds.

Ensuring compliance with all applicable laws is complex. There is a risk the Group will be unable to implement the processes and controls required by relevant laws and regulations in

a timely manner or that the Group's internal controls will prove to be inadequate or ineffective in ensuring compliance. Any failure to comply with relevant laws and regulations may have a negative impact on the Group's reputation and financial performance and position, and may give rise to class actions, regulatory enforcement or litigation.

In addition, there is significant cost associated with the systems, processes and personnel required to ensure compliance with applicable laws and regulations. Such costs may negatively impact the Group's financial performance and position.

7.2.6.5 Failure to comply with laws or regulatory requirements may expose the Group to class actions.

There have been a number of domestic and international firms facing high profile regulatory enforcement actions for alleged instances of non- compliance with laws or regulatory requirements. In some cases, these enforcement actions have also

given rise to class actions. Plaintiff law firm Slater & Gordon has filed a class action in the Federal Court of Australia, alleging that NAB and MLC engaged in unconscionable conduct and misleading and deceptive conduct in connection with the sale of a particular type of consumer credit insurance (being 'NAB Credit Card Cover') and unconscionable conduct in

connection with the sale of a second consumer credit insurance product, NAB Personal Loan Cover. Refer to 'Notes to the Financial Statements', Note 29 Contingent liabilities and credit commitmentson page 146 in the Annual Financial Report 2019 under the heading 'Regulatory activity,

compliance investigations and associated

proceedings - Consumer Credit Insurance (CCI)' for more information. A settlement agreement in relation to this action was announced on

20 November 2019, and is awaiting approval by the Federal Court of Australia.

In addition, class actions have been commenced against NULIS and MLCN in connection with two matters that were referred to APRA by the Royal Commission. Litigation funder IMF Bentham and William Roberts Lawyers commenced a class action against NULIS alleging breaches of NULIS' trustee duties in relation to the maintenance of grandfathered commissions following a successor fund transfer in 2016. In January 2020, Maurice Blackburn commenced a class action against NULIS and MLCN alleging breaches of trustee obligations in connection with the speed with which NULIS effected transfers of members' accrued default amounts to MySuper. The potential outcome and total costs associated with these proceedings remains uncertain.

NAB is also involved in class action proceedings in the US in respect of alleged conduct relating to the Bank Bill Swap Reference Rate and in the UK in respect of the sale of tailored business loans. Refer to 'Notes to the Financial Statements', Note 29

Contingent liabilities and credit commitments on page 145 in the Group's Annual Financial Report under the heading 'Legal proceedings' for more information.

It is possible that class actions may arise against members of the Group in relation to allegations of which the Group is currently aware or other matters of which it is not yet aware. Any class action may impact the Group's reputation, divert management

time from operations and affect the Group's financial performance and position, profitability and returns to investors.

7.2.6.6 The Group may be exposed to losses if critical accounting judgements and estimates are subsequently found to be incorrect.

Preparation of the Group's financial statements requires management to make estimates and assumptions and to exercise judgement in applying relevant accounting policies, each of which may directly impact the reported amounts of assets, liabilities, income and expenses. A higher degree of judgement is required for the estimates used in the calculation of provisions (including for customer-related remediation), the valuation of goodwill and intangible assets, and the fair value of financial instruments. Changes in the methodology or assumptions on which the assessment of goodwill and intangible balances is based, together with expected changes in future cash flows (including changes flowing from current and potential regulatory reforms), could result in the potential write off of a part or all of that goodwill or intangible balances.

If the judgements, estimates and assumptions used by the Group in preparing financial statements are subsequently found to be incorrect, there could be a significant loss to the Group beyond that anticipated or provided for, which may adversely impact the Group's reputation, and financial performance and position.

7.2.6.7 The Group may be exposed to litigation and contingent liabilities.

Entities within the Group may be involved from time to time in legal proceedings arising from the conduct of their business. The aggregate potential liability and costs in respect thereof cannot be estimated with any certainty.

Currently, there are a number of ongoing investigations and court proceedings involving the Group. These include matters relating to: the provision of financial advice;

94| NAB Capital Notes 4

the inappropriate charging of fees for services; selling practices and advice in relation to consumer credit insurance products and compliance with licence conditions, the NCCP Act and the National Credit Code. Where appropriate, provisions are held for litigation matters based on a number of assumptions derived from a combination of past experience, forecasts, industry comparison and the exercise of subjective judgement based on (where appropriate) external professional advice. As with other accounting judgements, risks and uncertainties remain in relation to these assumptions and the ultimate costs of redress to the Group. There is inherent uncertainty regarding the possible outcome of any court proceedings involving the Group. It is also possible that further class actions, regulatory investigations, civil or criminal proceedings, or the imposition of new licence conditions could arise in relation to these matters or other matters of which the Group is not yet aware.

A negative outcome to investigations or litigation involving the Group may divert management time from operations and adversely impact the Group's reputation, and financial performance and position. Refer to 'Notes to the Financial Statements', Note 29 Contingent liabilities and credit commitmentson pages 143-148 in the Annual Financial Report 2019 for details in relation to certain legal proceedings and contingent liabilities which may impact the Group.

7.2.7. Conduct Risk

Conduct risk is the risk that any action of the Group, or those acting on behalf of the Group, will result in unfair outcomes for any of the Group's customers.

7.2.7.1 The Group is heavily reliant on its employees, contractors and external suppliers acting in an appropriate and ethical way.

Organisational culture can greatly influence individual and group behaviours which can expose an

organisation and lead to unfair customer outcomes. The behaviours that could expose the Group to conduct risk include:

Selling, or unduly influencing customers to purchase, products or services that do not meet their needs.
Being a party to fraud.
Non-adherenceto applicable requirements or providing financial advice which is not appropriate or in the customers' interests.
Delays in appropriately escalating regulatory issues.
Failure to resolve issues and remediate customers in a timely manner.

If the Group's conduct related controls were to fail significantly, be set inappropriately, or not meet legal, regulatory or community expectations, then the Group may be exposed to:

Increased costs of compliance, fines, additional capital requirements, public censure, litigation, settlements and restitution to customers.
Increased supervision, oversight or enforcement by regulators or other stakeholders.
Unenforceability of contracts such as loans, guarantees and other security documents.
Enforced suspension of operations, amendments to licence conditions or loss of licence to operate all or part of the Group's businesses.
Other enforcement or administrative action or agreements, including legal proceedings.

A failure of the Group's conduct controls to accurately reflect relevant legal, regulatory or community expectations may adversely impact the Group's reputation, financial performance and position, profitability, operations and returns to investors.

7.2.8. Regulatory Risk

Regulatory risk is the risk of failing to identify or appropriately respond to changes to the regulatory environment or of damaging the Group's standing with its regulators as a result of

the Group not meeting regulatory expectations.

7.2.8.1 Extensive regulatory change poses a significant risk to the Group.

Globally, the financial services and banking industries are subject to a significant and increasing number of regulatory reviews and political scrutiny, including in Australia, NZ and other countries where the Group has, or is intending to establish, offshore operations. Changes to laws and regulations or their interpretation and application can be unpredictable, are beyond the Group's control, and may not be harmonised across the jurisdictions in which the Group operates.

Regulatory change may result in significant capital and compliance costs, changes to the Group's corporate structure and increasing demands

on management, employees and information technology systems. This may also impact the viability of the Group's participation in certain markets, or give rise to the need to divest a part of the Group's business.

The Royal Commission made a considerable number of recommendations. The Australian Government has committed to take action on all recommendations and announced further commitments to address issues raised in the final report of the Royal Commission. Some commitments have been implemented by the Australian Government and regulators, and others are in progress or subject to consultation. The legislative and regulatory changes will impact the operations of the Group. The Australian Government has committed to an accelerated timeframe for introducing the legislative changes required

to effect the Royal Commission's recommendations and the Australian Government's further commitments. The accelerated timeframe for implementation poses a risk to the Group's operations as the necessary compliance arrangements may not be able to be implemented in a timely and considered manner. Following

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the Royal Commission, further inquiries and regulatory reviews impacting the financial services industry may be commissioned by the Australian Government, which, depending on their scope, findings and recommendations, may adversely impact the Group.

Other reviews and regulatory reforms currently relevant to the Group which present a potential regulatory risk include:

APRA's various reforms in relation toloss-absorbing capacity. These include the requirement, due to be implemented by 1 January 2024, that D-SIBs such as NAB, increase total capital by 3% of risk weighted assets ("RWA"), which is expected to be satisfied primarily by issuing additional Tier 2 Capital. Based on the Group's RWA of A$416bn at 30 September 2019, this requirement represents an incremental increase of A$12.5bn of total capital. In addition, APRA intends to consult on a target of additional capital amounting to
a further 1-2% of RWA. The Group's funding costs are expected to increase due to the higher cost of Tier 2 Capital issuance relative to senior debt.
APRA's proposed revisions to the credit risk management framework for ADIs include broadening requirements for credit risk management practices; revising credit standards; and aligning asset classification and provisioning with the BCBS's recent accounting standard changes and guidance.
The Reserve Bank of New Zealand ("RBNZ") released its final decisions on capital requirements for New Zealand banks in December 2019. The final capital requirements include: an increase to risk- weighted assets ("RWA") for internal ratings based banks such as NAB's subsidiary, Bank of New Zealand ("BNZ") to approximately 90% of what would be calculated under the standardised approach; an increase in the Common Equity

Tier 1 ("CET1") capital requirement equal to 13.5% of RWA (including a prudential capital buffer of 9% of RWA) for banks deemed systemically important (which includes BNZ);

an increase in the Tier 1 capital requirement equal to 16% of RWA for banks deemed systemically important; and an increase in the Total Capital requirement equal to 18% of RWA for banks deemed systemically important. The RBNZ has confirmed the changes will start to take effect from 1 July 2020 and will be phased in over a 7 year period. Some aspects of the framework (including the detailed regulatory requirements to be included in

the capital standards) are still to be confirmed in consultations expected to take place in 2020. It also remains unclear the extent to which APRA will incorporate aspects of the RBNZ's capital requirements as part of its review of the Australian capital framework. Based on BNZ's balance sheet as at 30 September 2019, these changes represent a CET1 capital increase of NZ$3-4 billion for BNZ by 1 July 2027. The ultimate impact on the NAB Group will depend on various factors, including BNZ's balance sheet size over the implementation period, and the potential mitigating actions undertaken.

APRA's ongoing consultation on revisions to the capital framework, reaffirming its intention to strengthen banking system resilience by establishing 'unquestionably strong' capital ratios. The major Australian banks (including NAB) are expected to meet APRA's 'unquestionably strong' target benchmark beginning January 2020. Final revised prudential standards in relation to therisk-weighting framework and other capital requirements are expected to be released in 2020, and may require additional capital to be held by the Group from January 2022.
The NZ Financial Markets Authority and RBNZ have undertaken a review

of conduct and culture in the financial services industry. Alongside industry-wide recommendations released as a result of the review, further specific findings were provided to individual NZ banks (including BNZ) in November

2018. The review also led to the NZ Government introducing the Financial Markets (Conduct of Institutions) Amendment Bill in the NZ Parliament in December 2019 to create an oversight regime for regulating conduct in the banking and insurance sectors. The Bill is expected to have its first reading in early 2020.

The Australian Banking Executive Accountability Regime ("BEAR") has been legislated and applies to the Group. On 22 January 2020, the Australian Federal Government Treasury released its proposal paper on a new Financial Accountability Regime ("FAR"). This regime has been developed in response to
a number of Royal Commission recommendations and is intended to extend and replace BEAR. The FAR legislation is expected to be introduced by the end of 2020 (although implementation may be phased), and is likely to include new prescribed responsibilities and increased maximum civil penalties for the Group and its accountable persons.
The Australian Federal Government has directed the Australian Competition and Consumer Commission ("ACCC") to commence an inquiry into home loan pricing. The ACCC will investigate a wide range of issues, including the rates paid by new and existing customers, impediments to customer switching, how the cost of financing for banks has affected interest rate decisions and the interaction between home loan pricing and rate-setting by the Reserve Bank of Australia. A preliminary report is expected
by 30 March 2020, with a final report due to the Government on 30 September 2020.

96| NAB Capital Notes 4

Other material regulatory changes include new requirements for the design and distribution of financial products, responsible lending reforms, and the implementation of Open Banking reforms. In addition, there are a number of other ongoing or proposed regulatory changes and inquiries relevant to the Group such as: changes to the Group entities eligible for inclusion in the Level 1 group for prudential purposes; changes to financial benchmarks; derivatives reform; payments; data protection and privacy laws; data quality; competition inquiries; financial crime legislation, accounting and reporting requirements; and tax reform.

The full scope, timeline and impact of current and potential inquiries and regulatory reforms such as those mentioned above, or how they will be implemented (if at all in some cases), is not known. Depending on the specific nature of the requirements and how they are implemented or enforced, they may have an adverse impact on the Group's business, operations, structure, compliance costs or capital requirements, and ultimately its reputation, and financial performance and position.

7.2.8.2 There is a risk of the Group failing to deliver on commitments made to its regulators and to the public or otherwise damaging its relationship with regulators.

In response to the Royal Commission, the Group has made certain

public commitments to change the way it operates. In addition, in November 2018, the Group published its self-assessment on governance, accountability and culture to APRA. In November 2019, the Group published an update to the market on progress against actions related to self-assessment findings and recommendations arising from

the Royal Commission. In addition, ongoing engagement is in place to provide progress updates to APRA.

If the Group does not deliver on the matters identified in its self-

assessment, fails to deliver on its public commitments following the Royal Commission, or otherwise fails to comply with the representations it makes to the public or to its regulators, this may negatively impact the Group's reputation. Such reputational damage may adversely impact the Group's ability to attract and retain customers or employees in the short and long- term. It may also result in a higher risk premium being applied to the Group, and impact the cost of funding the Group's operations, or its financial performance and position.

7.2.8.3 The enforcement approach of the Group's principal regulators has changed, resulting in a greater risk of enforcement actions.

A number of measures were recommended by the Royal Commission to improve the effectiveness and oversight of ASIC and APRA in deterring, and imposing appropriate penalties for, misconduct. These included a recommendation for ASIC to change its approach

to enforcement, with a focus on instigating court actions in relation to conduct matters where a breach of law is more likely than not, and the matter is in the public interest. Accordingly, the Group may be exposed to a greater risk of enforcement action initiated by its primary regulators, ASIC and APRA, which may result in the imposition of civil or criminal penalties on the Group. The issuing of any such enforcement action, and any subsequent imposition of penalties, may negatively impact on the Group's reputation and financial performance and position.

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AUSTRALIAN TAXATION SUMMARY

98| NAB Capital Notes 4

The Directors	25 February 2020
National Australia Bank Limited
Level 1, 800 Bourke Street
Docklands VIC 3008
Dear Directors
Australian tax consequences of investing in NAB Capital Notes 4

We have been instructed by National Australia Bank Limited (NAB) to prepare a tax summary for inclusion in the Prospectus dated on or about 25 February 2020 in relation to the offer of NAB Capital Notes 4, including a reinvestment offer which provides eligible holders of NAB Capital Notes (NCN) with the opportunity to reinvest the proceeds of the sale of their NCN under the NCN Resale in NAB Capital Notes 4.

1 Scope

This letter provides a summary of the Australian income tax, capital gains tax (CGT), goods and services tax (GST) and stamp duty consequences for Holders who are Australian tax residents, acquire NAB Capital Notes 4 through initial subscription under this Prospectus and who hold their NAB Capital Notes 4 on capital account for tax purposes (Resident Holders).

This summary does not consider the tax consequences which may arise for Holders who are in the business of trading in securities or otherwise hold NAB Capital Notes 4 as trading stock or revenue assets for tax purposes, or for any Holders who are non-residents for Australian tax purposes or Australian residents who hold NAB Capital Notes 4 through a permanent establishment outside Australia.

This summary is based on the Australian tax law and administrative practice in force as at the date of this Prospectus. It is necessarily general in nature and is not intended to be definitive or exhaustive of the issues that may arise for Holders. Accordingly, each Holder should seek their own tax advice that is specific to their particular circumstances.

The representatives of Greenwoods & Herbert Smith Freehills involved in preparing this tax summary are not licensed to provide financial product advice. Accordingly, Greenwoods & Herbert Smith Freehills does not seek to recommend, promote or otherwise encourage any party to participate in the issue of NAB Capital Notes 4. Potential investors should consider seeking advice from a suitably qualified Australian Financial Services Licence holder before making any investment decision. Potential investors should also note that tax is only one of the matters that may need to be considered.

Unless otherwise defined, capitalised terms in this letter have the same meaning as in the Prospectus and the NAB Capital Notes 4 Terms.

Greenwoods & Herbert Smith Freehills has given its consent to the inclusion of this letter in the Prospectus.

2 Anticipated Class Ruling - applicable to certain Holders

NAB has applied to the Australian Taxation Office (ATO) for a class ruling (Class Ruling) confirming certain tax consequences for Resident Holders.

However, the ATO has indicated that it is unable to issue a Class Ruling until Exposure Draft legislation released in December 2019 (Draft Amending Legislation) has been enacted (see section 3.2 below). As such, the ATO will issue the Class Ruling either after the NAB Capital Notes 4 are issued or after the enactment of the Draft Amending Legislation (whichever comes later).

When issued, copies of the Class Ruling will be available for download from the ATO's website (www.ato.gov.au) and from NAB's website (www.nab.com.au).

It is expected that, when issued, the Class Ruling will:

only be binding on the Commissioner of Taxation (Commissioner) if the Offer is carried out in the specific manner described in the Class Ruling;
only apply to Holders who are Australian tax residents, acquire their NAB Capital Notes 4 by initial subscription under the Prospectus and hold them on capital account for tax purposes (i.e. Resident Holders, as defined above).
Accordingly, the Class Ruling will not apply to Holders who hold their NAB Capital Notes 4 as trading stock or revenue assets or who are non-residents for Australian tax purposes;

ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia	Telephone +61 2 9225 5955 Facsimile +61 2 9221 6516
GPO Box 4982 Sydney NSW 2001 Australia	DX 361 Sydney www.greenwoods.com.au
Liability limited by a scheme approved	Greenwoods & Herbert Smith Freehills Pty Limited ABN 60 003 146 852
under the Professional Standards Legislation
	NAB Capital Notes 4 \| 99

only rule on the tax laws as at the date the Class Ruling is issued;
not consider the tax implications of a Redemption of NAB Capital Notes 4;
not consider the tax treatment of Distributions received by partnerships or trustee investors;
not consider the tax implications for Resident Holders for whom gains and losses from NAB Capital Notes 4 are subject to the taxation of financial arrangement (TOFA) rules in Division 230 of the Tax Act (see section 4.7 of this letter).
Division 230 will generally not apply to the financial arrangements of individuals, unless an election has been made for those rules to apply; and
not consider the tax implications of the Reinvestment Offer.

You should also be aware that the Class Ruling will not mean that the ATO guarantees or endorses the commercial viability of investing in NAB Capital Notes 4.

3 Tax consequences expected to be addressed in the Class Ruling

Subject to the exceptions noted below, it is expected that the following tax consequences for Resident Holders will be addressed in the Class Ruling.

Status of NAB Capital Notes 4 for tax purposes
Although not expected to be specifically addressed in the Class Ruling, NAB Capital Notes 4 should be characterised as non-share equity interests for Australian income tax purposes. This means that Distributions on the NAB Capital Notes 4 should be treated as "non-share dividends" that are frankable, as outlined in section 3.2 below.
The Class Ruling will confirm that NAB Capital Notes 4 are not "traditional securities" for tax purposes. The consequence of this is that gains and losses on NAB Capital Notes 4 for Resident Holders should be subject to the capital gains tax rules, as summarised further below, rather than being subject to the specific rules that apply to "traditional securities".
Distributions and franking credits
Distributions paid on NAB Capital Notes 4 must be included in the assessable income of a Resident Holder.
Generally, provided they are a "qualified person" in relation to a Distribution (see section 4.1 below), a Resident Holder must also "gross-up" a Distribution - i.e. include the amount of any franking credits attached to the Distribution in their assessable income - and will be entitled to a tax offset for those franking credits.
To the extent that the tax offsets attributable to franking credits attached to Distributions exceed a Resident Holder's income tax liability for an income year, the excess tax offset may be refundable to a Resident Holder that is an individual or a complying superannuation entity.
A Resident Holder that is a company should be entitled to a franking credit and tax offset in respect of any franking credits attached to Distributions. However, the company will not be entitled to a tax refund of any excess franking credits. Rather, although not expected to be addressed in the Class Ruling, any surplus franking credits may be converted to a tax loss which may be carried forward to future years (subject to satisfaction of certain tax loss carry forward rules).
Resident Holders who are not individuals, trustees of complying superannuation entities or companies should consider and seek advice on how they should be treated in relation to the taxation of Distributions. Such Resident Holders include exempt bodies and the trustees of trusts other than complying superannuation entities.
The Commissioner may apply anti-avoidance rules to deny the benefit of franking credits to Resident Holders in limited circumstances.
One such rule (in section 207-158 of the Tax Act) applies when a franked distribution gives rise to a foreign income tax deduction for the issuer of the instrument (here, NAB). This provision would apply to Distributions paid on NAB Capital Notes 4 if those Distributions give rise to a foreign income tax deduction for NAB, even if that foreign income tax deduction is not for the full amount of a Distribution or only for a small component of the Distribution.
The Government is aware of this issue and, in December 2019, released Draft Amending Legislation proposing to amend this rule retrospectively. If enacted in its current form, the Draft Amending Legislation would ensure that investors (here, NAB Capital Notes 4 Holders) would not be denied franking credits or tax offsets on their distributions provided that the issuer (NAB) provides a notification to the Commissioner that it will not claim any such foreign income tax deductions if they arise. Assuming that the Draft Amending Legislation is enacted, we understand that NAB will provide such a notification to the Commissioner. In addition, the ATO has released guidance confirming that the ATO is not planning to take any action in respect of investors' compliance with the current law at this time.

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If enacted it its current form, the Draft Amending Legislation would apply to distributions from 1 January 2019. Resident Holders should be aware that there is no certainty that the Draft Amending Legislation will be enacted.

It is anticipated that the Commissioner will not seek to apply any of the other anti-avoidance provisions in the tax law to deny the whole or any part of the imputation benefits received by Resident Holders in relation to Distributions.

CGT cost base and acquisition date for NAB Capital Notes 4
Each Resident Holder's CGT cost base (or reduced cost base) for each NAB Capital Note 4 they acquire should include the $100 Issue Price of the NAB Capital Note 4. Although not expected to be addressed in the Class Ruling, the cost base (or reduced cost base) for each NAB Capital Note 4 may also include certain non-deductible incidental costs (e.g. brokerage or advisory fees) associated with acquiring and/or disposing of NAB Capital Notes 4.
The cost base (or reduced cost base) will be relevant in determining a Resident Holder's capital gain (or capital loss) on a subsequent disposal of NAB Capital Notes 4.
Each NAB Capital Note 4 will be taken to have been acquired by a Resident Holder on the date that the NAB Capital Notes 4 are issued to that Resident Holder (i.e. the Issue Date).
Conversion of NAB Capital Notes 4
Under specific capital gains tax provisions in the Tax Act dealing with convertible interests, any gain or loss that would arise for a Resident Holder on Conversion of their NAB Capital Notes 4 should be disregarded. The consequence of this is that the gain or loss on Conversion is effectively deferred, with a Resident Holder's cost base in the Ordinary Shares acquired on Conversion reflecting the pro-rata portion of the Resident Holder's cost base in their NAB Capital Notes 4.
For CGT purposes, Resident Holders will be taken to have acquired the Ordinary Shares on the date of the Conversion (and not on the Issue Date).
Conversion of NAB Capital Notes 4 into ordinary shares in a NOHC
In the event that an Approved NOHC becomes the ultimate holding company of the NAB Group, the NAB Capital Notes 4 Terms may be amended to substitute the Approved NOHC as the issuer of ordinary shares in the event of a Conversion of NAB Capital Notes 4.
Such an amendment to the NAB Capital Notes 4 Terms should not result in Resident Holders realising a capital gain or capital loss provided they do not receive any proceeds (and do not incur any incidental costs) as a result.
No capital gain or capital loss should arise for Resident Holders where, on a subsequent Conversion of NAB Capital
Notes 4, they receive shares in the Approved NOHC (in substitution for Ordinary Shares in NAB), due to the specific rules in the Tax Act that deal with convertible interests. The consequence of this is that the gain or loss on Conversion is effectively deferred, with a Resident Holder's cost base in the Approved NOHC shares acquired on Conversion reflecting the Resident Holder's cost base in their NAB Capital Notes 4.
For CGT purposes, Resident Holders will be taken to have acquired the Approved NOHC shares on the date of the Conversion (and not on the Issue Date).
Resident Holders will be required to apportion their original cost base (or reduced cost base) for their NAB Capital Notes 4 across all of the Approved NOHC shares that they acquire on Conversion.
Writing Off
In certain circumstances, NAB Capital Notes 4 may be Written Off (rather than Converted) following a Loss Absorption Event.
Writing Off NAB Capital Notes 4 would involve a Resident Holder's rights under the NAB Capital Notes 4 being terminated for no consideration. A CGT event will happen for Resident Holders if NAB Capital Notes 4 are Written Off.
It is anticipated that the Class Ruling will confirm that, for the purposes of determining whether a Resident Holder makes a capital gain or capital loss from that CGT event happening on a Write Off, a Resident Holder will be taken to have nil capital proceeds, on the basis that they will receive no consideration and the NAB Capital Notes 4 will have a market value of nil at that time. Although not expected to be addressed in the Class Ruling, in that case, Resident Holders should make a capital loss equal to the reduced cost base of their Written Off NAB Capital Notes 4.
Resale
NAB may elect to Resell NAB Capital Notes 4 in certain circumstances. For each NAB Capital Note 4 subject to a Resale, a Resident Holder will be entitled to receive the Resale Price (which is equal to the Issue Price) from the

NAB Capital Notes 4 | 101

Nominated Purchaser. A Resale will constitute a disposal of NAB Capital Notes 4 by the Resident Holder for CGT purposes. Accordingly, a Resident Holder may realise a capital gain or capital loss on such disposal to the extent that the Resale proceeds are greater or less than the Resident Holder's cost base or reduced cost base for the NAB Capital Notes 4.

Although not expected to be specifically addressed in the Class Ruling, if NAB Capital Notes 4 have been held for at least 12 months prior to the Resale (excluding the days of acquisition and disposal), a Resident Holder (other than a company) may be entitled to CGT discount treatment in respect of any capital gain arising on disposal, such that a percentage of the gain is not included in their assessable income. The discount percentage is applied to the amount of the capital gain after offsetting any current year or carried forward capital losses. The discount percentages are 50% for Resident Holders who are individuals and trusts and 33⅓% for Resident Holders that are complying superannuation entities.

Companies are generally not entitled to the CGT discount.

The Government announced in the Federal Budget delivered on 8 May 2018 that from 1 July 2019 "managed investment trusts" (MITs) and "attribution MITs" (AMITs) will not be entitled to the CGT discount at the trust level. Under the proposal, MITs and AMITs that derive capital gains will continue to be able to distribute those amounts as capital gains that may be subject to the CGT discount in the hands of those beneficiaries who are entitled to the CGT discount. In the 2018-2019Mid-Year Economic and Fiscal Outlook released on 17 December 2018, the Government announced that the start date for this proposal will be revised from 1 July 2019 to 1 July 2020. Investors should monitor any potential changes on an ongoing basis.

4 Other tax consequences for Resident Holders not expected to be addressed in the Class Ruling

The following tax consequences for Resident Holders are not expected to be addressed in the Class Ruling.

Qualification for franking credits on Distributions - "qualified person"
As noted in section 3.2 above, a Resident Holder is only required to "gross up" a Distribution for attached franking credits, and is only entitled to a tax offset, if the Resident Holder is a "qualified person" in relation to that Distribution. A Resident Holder will be a "qualified person" if the "holding period" rule is satisfied in respect of the Distribution.
In relation to the holding period rule, where there are no "related payment" obligations, the "primary qualification period" applies with the consequence that a Resident Holder must have held NAB Capital Notes 4 "at risk" for a continuous period of at least 90 days (excluding the days of acquisition and disposal) within a period beginning on the day after the date on which the Resident Holder acquired the NAB Capital Notes 4 and ending on the 90th day after the date on which the NAB Capital Notes 4 became ex-Distribution.
Where a Resident Holder, or an associate, is under an obligation to make a "related payment" (essentially a payment passing on the benefit of the Distribution) in respect of a Distribution, the "secondary qualification period" applies with the consequence that a Resident Holder is required to hold NAB Capital Notes 4 "at risk" for at least 90 days (excluding the days of acquisition and disposal) within a period beginning 90 days before and ending 90 days after the date on which NAB Capital Notes 4 became ex-Distribution.
Alternatively, a Resident Holder who is an individual will automatically be taken to be a qualified person in relation to
Distributions if the total amount of their franking tax offsets for an income year (from all sources) is $5,000 or less, unless they are subject to the "related payments" rule.
In determining whether a Resident Holder has held their NAB Capital Notes 4 "at risk", all "positions" in respect of NAB Capital Notes 4 must be taken into account in identifying the Resident Holder's "net position", to determine whether there has been a material diminution of risk. In this regard, the Resale facility will not represent a separate "position" in relation to NAB Capital Notes 4 and therefore will not affect a Resident Holder's ability to satisfy the "at risk" requirement. It is anticipated that the Class Ruling will address this particular issue.
Sale of NAB Capital Notes 4
A sale of NAB Capital Notes 4 by a Resident Holder on the ASX will be a CGT event and give rise to a capital gain if the sale proceeds exceed the Resident Holder's CGT cost base of the NAB Capital Notes 4. Conversely, a capital loss will result if the sale proceeds are less than the Resident Holder's reduced cost base.
A Resident Holder (other than a company) may be entitled to CGT discount treatment for any capital gain, in the manner discussed in section 3.7 above.

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Redemption of NAB Capital Notes 4
NAB may also elect to Redeem NAB Capital Notes 4 in certain circumstances, in which case NAB must pay a cash amount equal to the Face Value in respect of each NAB Capital Note 4.
Redemption of NAB Capital Notes 4 will be a CGT event and give rise to a capital gain if the proceeds exceed the Resident Holder's CGT cost base of the NAB Capital Notes 4. Conversely, a capital loss will result if the proceeds are less than the Resident Holder's reduced cost base.
The Redemption proceeds will be an amount equal to the Face Value of each NAB Capital Note 4, unless the market value of a NAB Capital Note 4 on the Redemption Date (as determined as if its Redemption had not occurred or been proposed) is greater or less than the Face Value. In that case, the greater or lesser market value amount will be deemed to be the capital proceeds of the Redemption, instead of the Face Value actually received. The Redemption proceeds should not be treated as a dividend to the extent to which (as is expected to be the case) they are debited against an amount standing to the credit of NAB's non-share capital account. A Resident Holder (other than a company) may be entitled to CGT discount treatment for any capital gain, in the manner discussed in section 3.7 above.
Pay-as-you-gowithholding tax
Resident Holders may, if they choose, notify NAB of their TFN, ABN, or a relevant applicable exemption.
In the event that NAB is not so notified, NAB will, if required, withhold an amount at the highest marginal tax rate
(including Medicare Levy) from payments of Distributions on NAB Capital Notes 4. The rate of withholding is currently 47%.
Goods and services tax
Resident Holders should not be liable for GST in respect of acquiring NAB Capital Notes 4, or the disposal or Conversion of NAB Capital Notes 4.
Resident Holders who are registered for GST are unlikely to be entitled to an input tax credit for any GST paid in respect of costs associated with acquiring NAB Capital Notes 4 (e.g. advisory fees).
Stamp duty
Resident Holders should not be liable for stamp duty on the issue, sale, Redemption, Resale or Conversion of NAB Capital Notes 4 under applicable stamp duty law in each State and Territory of Australia, provided that they do not hold or acquire an interest of 50% or more in NAB, or where applicable in the Approved NOHC (in each case, aggregating interests of associated persons and interests acquired under associated transactions).
Taxation of Financial Arrangements
The TOFA rules are contained in Division 230 of the Tax Act. The TOFA regime generally applies to a taxpayer's
"financial arrangements" (as defined) where the taxpayer exceeds certain asset/turnover thresholds (and unless an exception applies).
For Resident Holders that are individuals, the TOFA regime should generally not apply to their investment in NAB Capital Notes 4.
Further, for Resident Holders that are not individuals (e.g. companies or complying superannuation entities), the TOFA regime should generally not apply in respect of their investment in NAB Capital Notes 4, even if they exceed the relevant asset/turnover thresholds, unless certain specific elective regimes under TOFA have been elected into by the Resident
Holder.
However, the TOFA rules are complex and Resident Holders should, if relevant, seek their own tax advice regarding how they will apply to their investment in NAB Capital Notes 4.

5 Summary of certain Australian tax consequences for holders of NCN

The following is a summary of the Australian tax consequences for certain Australian tax resident holders of NCN who are subject to Class Ruling CR 2015/23 (which sets out certain Australian tax consequences for Australian tax residents who invested in NCN in the initial offering) and hold their NCN on capital account.

This summary is not exhaustive, the actual tax consequences may differ depending on a NCN holder's particular circumstances, and NCN holders should seek their own professional tax advice. In particular, this summary does not consider the consequences for NCN holders who:

• acquired their NCN otherwise than under the initial offering;

NAB Capital Notes 4 | 103

- hold their NCN in their business of share trading, dealing in securities or otherwise hold their NCN on revenue account or as trading stock;
- hold their NCN through a permanent establishment outside Australia; and/or
- are or will be subject to the TOFA provisions in Division 230 of the Tax Act in relation to their holding of NCN or, in the case of Eligible NCN Holders who elect to participate in the Reinvestment Offer, the NAB Capital Notes 4 that they will acquire under the Reinvestment Offer.
Distribution on NCN
All NCN holders are expected to receive a final distribution on their NCN, subject to the payment conditions in the NCN
Terms.
The tax treatment of any final distribution should be the same as the treatment of other distributions received on the NCN, as outlined in Class Ruling CR 2015/23. On this basis, provided that a NCN holder is a "qualified person" (see the general comments in section 4.1 above and Class Ruling CR 2015/23), a NCN holder should generally include the amount of the final distribution as well as an amount equal to any franking credits attached to the distribution in their assessable income and should qualify for a tax offset equal to the franking credits.
Disposal of NCN
ATO Class Ruling 2015/23 confirmed that NCN are not "traditional securities" for tax purposes and hence gains or losses on NCN should not be subject to the specific rules that apply to "traditional securities".
For CGT purposes, under the NCN Resale all NCN holders will be taken to have disposed of their NCN to the NCN Nominated Purchaser for the NCN Resale Proceeds, being $100 per NCN.
Under the Reinvestment Offer, the NCN Resale Proceeds will be automatically reinvested in NAB Capital Notes 4. This will be effected via a payment direction by the relevant NCN holders to the NCN Nominated Purchaser to apply the NCN Resale Proceeds as payment for NAB Capital Notes 4 on their behalf.
The Resale Proceeds not being reinvested under the Reinvestment Offer will be paid in cash directly to the relevant NCN holders.
NCN holders may make a capital gain or capital loss on the disposal of their NCN, depending on whether the capital proceeds from the disposal are more than the CGT cost base for their NCN, or whether the capital proceeds are less than the reduced cost base for their NCN, respectively. Capital losses can generally only be offset against capital gains, but can be carried forward for use in a later year.
A NCN holder's CGT cost base (or reduced cost base) for each NCN should include the amount they paid to acquire the NCN and may also include certain other non-deductible incidental costs (e.g. brokerage or advisory fees) associated with acquiring and/or disposing of the NCN. If the NCN have been owned for at least 12 months prior to the disposal (excluding the days of acquisition and disposal), a NCN holder (other than a company) may be entitled to receive CGT discount treatment in respect of any gain arising on disposal of the NCN (see the general comments in section 3.7 above).
Cost base of NAB Capital Notes 4 acquired under the Reinvestment Offer
The amount of a NCN holder's NCN Resale Proceeds that is applied in subscribing for NAB Capital Notes 4 under the Reinvestment Offer should be included in the NCN holder's cost base (and reduced cost base) for the purposes of determining any future capital gain or capital loss on the disposal of NAB Capital Notes 4, or through a Conversion, Redemption or Resale.

* * *

Yours faithfully

GREENWOODS & HEBERT SMITH FREEHILLS PTY LIMITED per:

Julian Pinson

Partner

Greenwoods & Herbert Smith Freehills

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SECTION NINE

OTHER INFORMATION

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SECTION NINE:

OTHER INFORMATION

9.1 Interests and benefits

9.1.1 Directors

The Directors' relevant interests in NAB as at the date of this Prospectus are detailed in the following table:

Director	Number of	Number of performance	Number of other
	Ordinary Shares	rights over Ordinary Shares	securities

Philip Chronican	40,000		982 National Income
			Securities (NABHA)
Ross McEwan	5,000
David Armstrong	12,462
Kathryn Fagg	8,700
Peeyush Gupta	7,480
Anne Loveridge	10,000
Geraldine McBride	7,703
Doug McKay	10,000
Simon McKeon	0
Ann Sherry	7,456		1,500 NAB Capital Notes 3
			(NABPF)

The Directors (and their related parties) may acquire NAB Capital Notes 4 offered under this Prospectus subject to the ASX Listing Rules (including any waivers as described in Section 9.7).

Other than as set out in this Prospectus, no Director or proposed Director holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in:

the formation or promotion of NAB;
the Offer; or
any property acquired or proposed to be acquired by NAB in connection with the formation or promotion of NAB or the Offer.

Other than as set out in this Prospectus, at the time of lodgement of this Prospectus with ASIC, no one has paid

or agreed to pay any amount, and no one has given or agreed to give any benefit, to any Director or proposed Director:

to induce that person to become, or qualify as, a Director; or
for services provided by that person in connection with the formation or promotion of NAB or the Offer.

The Constitution contains provisions about the remuneration of the Directors. As remuneration for their services as Directors, the non-executive Directors are paid an amount of remuneration determined by the Board, subject to a maximum annual aggregate amount determined by Shareholders in a general meeting. The maximum annual aggregate amount approved is $4,500,000.

Each Director may also be paid additional remuneration for performance of additional services and is entitled to reimbursement of reasonable out-of-pocket expenses. The remuneration of the Group CEO is fixed by the Board. The remuneration may consist of salary, bonuses or any other elements but must not be a commission on or percentage of operating revenue.

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9.1.2 Interests of Advisers

NAB has acted as the Arranger for the Offer, and each of NAB; Morgan Stanley Australia Securities Limited; Morgans Financial Limited; Ord Minnett Limited; UBS AG, Australia Branch and Westpac Institutional Bank have acted as Joint Lead Managers to the Offer, and Bell Potter Securities Limited; Crestone Wealth Management Limited; JBWere Limited and Shaw and Partners Limited have acted as Co-Managers to the Offer, in respect of which they will receive fees from NAB. The fees include an arranger fee payable to the Arranger, and the following fees payable to each Joint Lead Manager:

a selling fee of 0.75% of the amount equal to the Face Value multiplied by the number of NAB Capital Notes 4 issued to that Joint Lead Manager and its affiliates under the Broker Firm Offer ("Selling Fee"); and
a joint lead manager fee of 0.50% of the amount equal to the Face Value multiplied by the number of NAB Capital Notes 4 issued to that Joint Lead Manager and its affiliates under the Broker Firm Offer ("JLM Fee").

Under the terms of the OMA (see also Section 9.5), the Joint Lead Managers may pay fees on behalf of NAB to financial services licensees and representatives ("Brokers") for procuring subscriptions of NAB Capital Notes 4 by their clients, among other things.

Under the OMA, the amount of the fee payable to a Broker by a Joint Lead Manager may not exceed the amount of the Selling Fee, unless that Broker is an affiliate of the Joint Lead Manager or a Broker approved by NAB, in which case the amount of the fee payable to that Broker by a Joint Lead Manager may not exceed the aggregate of the amount of the Selling Fee and the JLM Fee received by the Joint Lead Manager from NAB as described above.

Brokers may in turn rebate fees to other Brokers for procuring applications for NAB Capital Notes 4 by their clients, among other things. The amount of the

fee paid to a Broker by another Broker may not exceed the amount of the Selling Fee.

Ernst & Young has provided due diligence services in relation to the Offer. In respect of this work, Ernst & Young will be paid approximately

$150,000 (excluding disbursements and GST) for work performed by it up until the date of the Original Prospectus. Further amounts may be paid to Ernst

Young in accordance with its normaltime-based charges.

King & Wood Mallesons has acted as Australian legal adviser to NAB in relation to the Offer, assisting with the due diligence and verification program and performing due diligence on required legal matters. In respect of this work, NAB estimates that it will pay approximately $335,000 (excluding disbursements and GST) to King & Wood Mallesons for work up to the date of the Original Prospectus. Further amounts may be paid to King & Wood Mallesons in accordance with its normal time-based charges.

Greenwoods & Herbert Smith Freehills has acted as Australian taxation adviser to NAB in relation to the Offer, obtaining Australian Taxation Office ("ATO") rulings and has provided the Australian Taxation Summary contained in Section 8. In respect of this work, NAB estimates that it will pay approximately $85,000 (excluding disbursements and GST) to Greenwoods & Herbert Smith Freehills for work up to the date of the Original Prospectus. Further amounts may be paid to Greenwoods & Herbert Smith Freehills in accordance with its normal time-based charges.

Except as set out in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation

or distribution of this Prospectus, a promoter of NAB or broker to the Offer:

holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in:

- the formation or promotion of NAB;
- the Offer; or
- any property acquired or proposed to be acquired by NAB in connection with the formation or promotion of NAB or the Offer; or
has paid or agreed to pay any amount, and no one has given or agreed to give any benefit for services provided by that person, in connection with the formation or promotion of NAB or the Offer.

9.2 Expenses of the Offer

Assuming the Offer raises

$1,950 million, then the net proceeds of the Offer are expected to be $1,931 million and the total external expenses of the Offer are expected to be $19 million. The total expenses of the Offer have been, or will be, borne by NAB.

9.3 Rights and liabilities attaching to NAB Capital Notes 4

Appendix A sets out the rights and liabilities attaching to NAB Capital Notes 4. Further rights and liabilities attaching to NAB Capital Notes 4 may also arise under the Corporations Act, the ASX Listing Rules and other laws.

9.4 Rights and liabilities attaching to Ordinary Shares

On Conversion, holders of NAB Capital Notes 4 will receive Ordinary Shares. The Constitution sets out the rights and liabilities that attach to Ordinary Shares. Investors who wish to inspect the Constitution may do so at the registered address of NAB, or by requesting a copy as provided under "Availability of documents" in Section 9.10.

These rights and liabilities are also regulated by the Corporations Act, the ASX Listing Rules and the general law.

This section is a non-exhaustive summary of the main rights attaching to Ordinary Shares. They are as follows:

on a poll, the right to one vote per fully paid Ordinary Share (or a

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SECTION NINE: OTHER INFORMATION

fraction of a vote in proportion to the amount paid up on that Ordinary Share);

the right to transfer the Ordinary Shares, in accordance with the Constitution;
subject to the rights of holders carrying preferred rights, the right to receive dividends in proportion to the amount paid up on that Ordinary Share, if and when the Directors determine to pay them;
the right to receive information required to be distributed under the Corporations Act and the ASX Listing Rules; and
subject to the rights of holders carrying preferred rights, the right to participate in a surplus of assets on a winding up of NAB.

NAB's ability to pay a dividend may be restricted by Australian law and by the terms of prior ranking securities.

9.5 Summary of the Offer Management Agreement

NAB has entered into an Offer Management Agreement ("OMA") with the Arranger and the Joint Lead Managers (together, in this section, the "JLMs").

Under the OMA, NAB has agreed to conduct the Offer in accordance with this Prospectus, the OMA, the Constitution, and all applicable laws, and the JLMs have agreed to use reasonable endeavours to procure applications for NAB Capital Notes 4.

The fees payable to the JLMs are set out in Section 9.1.2.

9.5.1 Representations, warranties and undertakings

NAB gives various warranties, representations and undertakings to the JLMs, including that the documents issued or published by or on behalf of NAB in respect of the Offer comply with all applicable laws, including the Corporations Act and the ASX Listing Rules.

NAB has undertaken that it will not and will procure that members of the Group do not, without the prior

written consent of the JLMs, allot or agree to allot, or announce an issue of, indicate in any way that it may or will allot to retail investors, any ASX listed hybrid, debt or preference securities in Australia with Tier 1 or Tier 2 Capital status before that date which is 60 days after the settlement date detailed in the OMA. This undertaking does not apply to the Offer.

9.5.2 Termination events

Each JLM may terminate the OMA after the occurrence of one or more events, including the following non-exhaustive list of events:

ASIC issues a stop order or similar proceeding in relation to the Prospectus;
ASX does not grant its approval for official quotation of NAB Capital Notes 4, or the approval is subsequently withdrawn, qualified or withheld (other than in respect of the customary conditions);
a supplementary prospectus is, in the reasonable opinion of a JLM, required under section 719 of the Corporations Act (other than this Prospectus);
NAB's credit rating in respect of its long term senior debt is downgraded;
certain breaches of the OMA;
the Ordinary Shares or any of NAB's other listed securities are delisted or suspended from quotation;
NAB withdraws the Prospectus or the Offer;
NAB repays any application monies or gives Applicants the right to withdraw their applications in accordance with the Corporations Act; and
an event of insolvency occurs with respect to certain material Group members.

Some of these events will only give rise to a right to terminate if the JLM has reasonable grounds to believe that the event or a series of events together has or is likely to have a material adverse effect on the success, marketing, promotion or settlement of the Offer or that the event is likely to give rise

to a liability of that JLM. If this occurs, the JLM which terminates (or each JLM) will no longer be a lead manager and it will be relieved of its obligations under the OMA.

Under the OMA, if a JLM terminates, the JLM must give notice in writing to NAB and each of the other JLMs. If a JLM terminates, the remaining JLMs (other than the Arranger) may elect to assume the rights and obligations of the terminating JLM in agreed proportions by providing NAB with written notice.

If at any time from the date of the OMA to 2.00pm on 20 March 2020 there is a material adverse change in market conditions which, in the reasonable opinion of a majority of the JLMs makes it inadvisable to proceed with the Offer on the Issue Date on the terms and in the manner contemplated by this Prospectus (including because the change is likely to have a material adverse effect on the market price of the NAB Capital Notes 4 on the ASX or the success of the Offer), NAB will enter into good faith discussions with the JLMs for the purposes of discussing the viability of completing the Offer on the terms and in the manner contemplated by this Prospectus.

NAB indemnifies the JLMs and their affiliates and representatives (each an "Indemnified Party") against liabilities arising in connection with the OMA, except to the extent that those liabilities resulted from the fraud, recklessness, wilful misconduct or negligence of, or material breach of the OMA by, the Indemnified Party (except to the extent any such conduct is caused, induced or contributed to by NAB or its directors, employees

or advisers, and in certain other circumstances).

9.6 Reporting and disclosure obligations

NAB is a disclosing entity for the purposes of the Corporations Act and is subject to regular reporting and disclosure obligations. Under its obligations under the Corporations Act and the ASX Listing Rules, NAB

108| NAB Capital Notes 4

prepares yearly and half yearly financial statements, reports on its operations during the relevant accounting period and receives an audit from its auditor.

These documents as well as other documents lodged with ASIC may be obtained from ASIC.

Under the ASX Listing Rules, NAB must notify ASX immediately of any information concerning it of which it becomes aware, which a reasonable person would expect to have a material effect on the price or value of its quoted securities.

Subject to certain exceptions, NAB must ensure that ASX is continuously notified of information about specific events and matters as they arise so that ASX can make the information available to the Australian securities market.

9.7 Regulatory relief

ASX has classified NAB Capital Notes 4 as "convertible debt securities" for the purposes of the ASX Listing Rules and has confirmed that:

the Terms are appropriate and equitable for the purposes of ASX Listing Rule 6.1;
NAB Capital Notes 4 are not preference securities for the purposes of ASX Listing Rules 6.4, 6.5, 6.6 and 6.7;
the "Payment Conditions", potential exercise of limited amendment powers, and a Write Off following a Loss Absorption Event do not amount to a removal of a right to a Distribution for the purposes of ASX Listing Rule 6.10;
the divestment of NAB Capital Notes 4 from Holders as a result of Conversion, Redemption or Resale is appropriate and equitable for the purposes of ASX Listing Rule 6.12;
ASX Listing Rule 10.11 has been

waived to the extent necessary to permit Directors and their associates to participate in the Offer, without Shareholder approval, up to a maximum of 0.2% of the total number of NAB Capital Notes 4 issued under the Offer collectively provided that:

- the participation of the Directors and their associates in the Offer is on the same terms and conditions as applicable to other subscribers for NAB Capital Notes 4;
- NAB releases the terms of the waiver to the market when it announces the Offer; and
- when NAB Capital Notes 4 are issued, NAB announces to the market the total number of NAB Capital Notes 4 issued to Directors and their associates in aggregate;
the issue of Ordinary Shares on Conversion of NAB Capital Notes 4 would fall within ASX Listing Rule 10.12 (exception 7);
ASX Listing Rules 3.20.2, 3.20.5 and Appendix 3A of the ASX Listing Rules do not apply to any Conversion of NAB Capital Notes 4 following a Loss Absorption Event; and
the timetable for the Offer is acceptable.

ASX has also provided in principle approval of the quotation of NAB Capital Notes 4.

9.8 Consents to be named

Except as set out below, each of the parties named below as consenting parties:

has given and has not, before lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named;
has not made any statement in this Prospectus or any statement on which a statement made in this Prospectus is based; and
to the maximum extent permitted by law, expressly disclaims and takes no

responsibility for any statements in or omissions from this Prospectus.

Role	Consenting parties
Australian	King & Wood
legal adviser	Mallesons
Australian	Greenwoods &
tax adviser	Herbert Smith
	Freehills
Auditor	Ernst & Young
Arranger and	National Australia
Joint Lead	Bank Limited
Manager
Joint Lead	Morgan Stanley
Managers	Australia Securities
	Limited
	Morgans Financial
	Limited
	Ord Minnett Limited
	UBS AG, Australia
	Branch
	Westpac Institutional
	Bank
Co-Managers	Bell Potter Securities
	Limited
	Crestone Wealth
	Management
	Limited
	JBWere Limited
	Shaw and Partners
	Limited
Registry	Computershare
	Investor Services Pty
	Limited

Greenwoods & Herbert Smith Freehills has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus as Australian tax adviser and for the inclusion of statements by it, consisting of the Australian taxation summary in Section 8 in the form and context in which it appears in Section 8.

NAB Capital Notes 4 | 109

SECTION NINE: OTHER INFORMATION

9.10 Availability of documents

During the Offer Period NAB will provide a copy of any of the following documents to any person upon their request:

the Annual Financial Report 2019 lodged with ASIC by NAB (also available atasx.com.auor at nab.com.au/annualreport);
any continuous disclosure notices given by NAB since the lodgment of the financial report for the year ended 30 September 2019 and before lodgment of this Prospectus with ASIC (also available atasx.com.auor at nab.com.au); and
the Constitution (available atnab.com.au/corporategovernance)

To request a copy of any of the above documents, send your written request to:

Company Secretary

National Australia Bank Limited Level 1, 800 Bourke Street, Docklands, Victoria, 3008

9.11 Personal information

If you lodge an Application, NAB (or the Registrar as NAB's agent) will collect your personal information for the purposes of:

processing your Application;
administering your NAB Capital Notes 4; and
letting you know about products or services from across the Group that might serve your financial,e-commerce and lifestyle needs or promotions or other opportunities in which you may be interested.

Company and tax laws require some of the information to be collected. You may choose not to provide your personal information or to limit the information you provide, in which case NAB may not be able to process your Application, administer your NAB Capital Notes 4, or make payments to you.

NAB may disclose this information for these purposes to its subsidiaries and relevant organisations involved in

providing, managing or administering your product or service such as third party suppliers, other Group organisations, loyalty and affinity partners, printers, posting services, call centres, and our advisers. We run our business in Australia and overseas, so we might need to share some of your information with organisations outside Australia. You can view a list of countries the Group discloses personal information to at

nab.com.au/common/privacy-policy/overseas-countries

If you used a financial adviser who recommended your investment in NAB Capital Notes 4 (as indicated on your Application Form), NAB may disclose your personal information to that adviser and their service providers.

Where personal information is disclosed NAB will ensure that the information is held, used or disclosed consistently with the Privacy Act 1988 (Cth) and any other applicable privacy laws and codes.

You can ask us to access information that we hold about you or to correct information we hold about you. In addition, if you have a complaint about a privacy issue, please tell us about

it. For more information on access, corrections or complaint handling, please see our privacy policy at nab.com.au/privacyor by calling

13 22 65and asking us for a copy.

9.12 Acknowledgements

By submitting an Application Form, you, as Applicant, will be deemed to have:

represented and warranted that you have read and understood this Prospectus and accompanying Application Form in full;
declared that the Application Form has been completed and lodged according to this Prospectus
and subject to the declarations, statements and acknowledgements on the Application Form;
declared that you make the warranties, representations and acknowledgements contained in this Prospectus and the Application Form;

represented and warranted that all details and statements on your Application Form are complete and accurate;
declared that you (if a natural person) are at least 18 years old;
declared that you are not an individual residing in a member state of the European Union;
declared that you are not in the United States or other place outside Australia and you are not a U.S. Person, nor acting for the account or benefit of any U.S. Person;
represented and warranted that you have not distributed or accessed this Prospectus or any other materials concerning the Offer in the United States, or distributed any such materials to any U.S. Person;
declared that you understand that the NAB Capital Notes 4 have not been and will not be registered under the U.S. Securities Act and may not be offered or sold, directly or indirectly, in the United States or to, or for the account or benefit of, any U.S. Person, unless an exemption from such registration applies;
declared that you are an Australian resident;
represented and warranted that the laws of any other place, including the restrictions set out on page 3 of this Prospectus, do not prohibit you from being given this Prospectus or any supplementary or replacement Prospectus or making an application on the Application Form or being issued with NAB Capital Notes 4;
provided authorisation to be registered as the holder of
NAB Capital Notes 4 issued to you and agreed to be bound by the Constitution, this Prospectus, the Terms and the NAB Capital Notes 4 Deed Poll;
upon Conversion in accordance with the Terms, agreed to become a member of NAB and be bound by the Constitution;
applied for the number of
NAB Capital Notes 4 set out on or determined in accordance with the Application Form and agreed to be

110| NAB Capital Notes 4

allocated that number of NAB Capital Notes 4 or a lesser number;

acknowledged that NAB Capital Notes 4 are not Protected Accounts or deposit liabilities for the purposes of the Banking Act or any other accounts and are not guaranteed or insured by any government or other person, give Holders no claim on NAB (or any other member of the Group) except as provided in the Terms and that the investment performance of NAB Capital Notes 4 is not guaranteed by NAB;
authorised NAB and the Joint Lead Managers to do anything on your behalf necessary for NAB Capital Notes 4 to be allocated to you;
acknowledged that the information contained in this Prospectus (or any supplement or replacement) is not investment advice or a recommendation that NAB Capital Notes 4 are suitable for you, given your investment objectives, financial situation or particular needs;
acknowledged that your application to acquire NAB Capital Notes 4 is irrevocable and may not be varied or withdrawn except as allowed by law;
acknowledged that an application may be rejected without giving any reason, including where the Application Form is not properly completed or where a cheque submitted with the Application Form is dishonoured or for the wrong amount; and
acknowledged that if you are not issued any NAB Capital Notes 4 or issued fewer NAB Capital Notes 4 than the number that you applied and paid for as a result of the scale back, all or some of your Application Monies (as applicable) will be refunded to you (without interest) as soon as practicable after the Issue Date.

By applying to participate in the Reinvestment Offer, you, as Applicant, will be deemed to have:

represented and warranted to NAB and the NCN Nominated Purchaser that you are an Eligible NCN Holder;

represented and warranted to NAB and the NCN Nominated Purchaser that you have good title to the NCN the subject of your Application, and that the NCN Nominated Purchaser will receive good title to those NCN free from any encumbrance of security interests on the NCN Resale Proceeds being paid to you;
directed the NCN Nominated Purchaser to pay the NCN Resale Proceeds for each of NCN the subject of your Application to NAB as the Application Monies for NAB Capital Notes 4;
applied to NAB for a corresponding number of NAB Capital Notes 4, at $100 per NAB Capital Note 4;
agreed not to transfer your NCN and authorise NAB and its related bodies corporate and their respective officers to request the application of a holding lock on those NCN;
appointed NAB (or its officers) as your attorney and agent to execute a master transfer form to transfer to the NCN Nominated Purchaser the NCN the subject of your Application, in such form as NAB (or its officers) determines, and to transfer those NCN to the NCN Nominated Purchaser; and
authorised NAB to take all necessary steps to give effect to the reinvestment of their NCN Resale Proceeds the subject of your application.

9.13 Meetings

The NAB Capital Notes 4 Deed Poll includes provisions for convening meetings of the Holders to consider any matter affecting their interests, including any variation of the Terms. Any action which may affect the eligibility of NAB Capital Notes 4 as Additional Tier 1 Capital of NAB cannot be sanctioned or approved by Holders without the prior written approval

of APRA.

An Ordinary Resolution or a Special Resolution passed at a meeting of the Holders duly called and held under the meeting provisions will be binding on all the Holders whether or not present

or voting at the meeting (or signing a written resolution). Each Holder will be entitled to one vote on a show of hands. On a poll, each Holder will be entitled to one vote for each NAB Capital Note 4 with respect to which it is the registered holder.

A Holder has no entitlement to attend or vote at a general meeting of NAB or to receive a copy of the NAB annual report or other financial information sent to holders of Ordinary Shares.

NAB Capital Notes 4 | 111

APPENDIX A

TERMS OF NAB CAPITAL NOTES 4

Terms of NAB Capital Notes 4 issued by National Australia Bank Limited (ABN 12 004 044 937)

112| NAB Capital Notes 4

APPENDIX A:

TERMS OF NAB CAPITAL NOTES 4

1 Form and Issue Price

1.1 Form

NAB Capital Notes 4 are fully paid mandatorily convertible subordinated perpetual debt securities in the form of unsecured notes issued by NAB (NAB Capital Notes 4or Notes). NAB Capital Notes 4 are issued in registered form by entry in the Register. They may be Redeemed, Converted or Resold by NAB according to these Terms.

1.2 Face Value and Issue Price

TheFace Value andIssue Price of each Note is A$100.

1.3 CHESS

The Notes will be registered in CHESS. While the Notes remain in CHESS:

the rights and obligations of a person holding the Notes; and
all dealings (including transfers, transmissions and payments) in relation to the Notes within CHESS,

will be subject to and governed by the rules and regulations of CHESS (but without affecting any provisions in these Terms which affect the eligibility of the Notes as Additional Tier 1 Capital).

No certificates will be issued to Holders unless NAB determines that certificates should be available or if certificates are required by any applicable law or directive.

1.4 Quotation

NAB agrees to use all reasonable endeavours to procure that the Notes are quoted on ASX until all Notes have been Converted or Redeemed.

1.5 Independent obligations

Each entry in the Register constitutes a separate and individual acknowledgement to the relevant Holder of the obligations of NAB to the relevant Holder under these Terms. Without prejudice to any provision requiring a Special Resolution or an Ordinary Resolution, the Holder to whom those obligations are owed is

entitled to enforce them without having to join any other Holder or any predecessor in title of a Holder.

1.6 Nature of obligations

The Notes do not constitute deposit liabilities or protected accounts for the purposes of the Banking Act. In addition, the Notes are not guaranteed or insured by any government, Government Agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction, by any member of the Group or by any other person.

2 Distributions

2.1 Entitlement to Distributions

Subject to clause 2.6, each Note entitles each person who is the Holder on a Record Date to receive on the Distribution Payment Date a cash distribution (Distribution) calculated according to the formula set out in clause 2.4.

2.2 Distribution Payment Dates

Subject to these Terms, NAB shall pay a Distribution in respect of a Note in arrears on the following dates (each a Distribution Payment Date):

each 17 March, 17 June,
17 September and 17 December commencing on 17 June 2020 until (but not including) the date on which the Note is Converted or Redeemed in accordance with these Terms; and
each date on which a Conversion, Redemption or Resale of that Note occurs in accordance with these Terms.

If a Distribution Payment Date is a day which is not a Business Day, then the Distribution Payment Date is the next Business Day.

2.3 Record Dates

A Distribution is only payable on a Distribution Payment Date to those persons Registered as Holders on the Record Date for that Distribution.

2.4 Calculation of Distribution on Notes

The Distribution payable in respect of each Note on a Distribution Payment Date is calculated in accordance with the following formula:

Distribution =

Distribution Rate x A$100 x N

365

where Nis the number of days in the Distribution Period.

TheDistribution Rate (expressed as a percentage per annum) in respect of a Note for a Distribution Period is the rate calculated according to the following formula:

Distribution Rate =

(Bank Bill Rate + Margin) x (1 - Tax Rate) where:

Bank Bill Rate means:

subject to paragraph (b):
1. for a Distribution Period, the rate (expressed as a percentage per annum) designated "BBSW" in respect of prime bank eligible securities having a tenor of 3 months which ASX (or its successor as administrator of that rate) publishes through information vendors at approximately 10:30am Sydney time (or such other time at which such rate is accustomed to be so published) (thePublication Time):
2. 1. in the case of the first Distribution Period, on the Issue Date; and
  2. in the case of any other Distribution Period, on the first Business Day of that Distribution Period; or
3. if NAB determines that such rate as is described in paragraph (i) above:
4. 1. is not published by midday (or such other time that NAB considers appropriate on that day); or

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APPENDIX A:

TERMS OF NAB CAPITAL NOTES 4

is published, but is affected by an obvious error,

such other rate that NAB determines having regard to comparable indices then available; and

if NAB determines that a Rate Disruption Event has occurred, then, subject to APRA's prior written approval, NAB:
1. shall use as the Bank Bill Rate such Replacement Rate as it may determine;
2. shall make such adjustments to the Terms as it determines are reasonably necessary to calculate Distributions in accordance with such Replacement Rate; and
3. in making the determinations under paragraphs (i) and (ii) above:
4. 1. shall act in good faith and in a commercially reasonable manner;
  2. may consult with such sources of market practice as it considers appropriate; and
  3. may otherwise make such determination in its discretion;

Holders should note that APRA's approval may not be given for any Replacement Rate it considers to have the effect of increasing the rate of Distributions contrary to applicable prudential standards.

Margin(expressed as a percentage per annum) means, for a Note, the margin specified in, or determined in accordance with, the Bookbuild; and

Rate Disruption Event means that, in NAB's opinion, the rate described in paragraph (a) of the definition of "Bank Bill Rate":

has been discontinued or otherwise ceased to be calculated or administered; or
is no longer generally accepted in the Australian market as a reference rate appropriate to floating rate debt securities

of a tenor and interest period comparable to that of the Notes;

Replacement Ratemeans a rate other than the rate described in paragraph (a) of the definition of "Bank Bill Rate" that is generally accepted in the Australian market as the successor to the Bank Bill Rate, or if NAB is not able, after making reasonable efforts, to ascertain such rate, or there is no such rate:

a reference rate that is, in NAB's opinion, appropriate to floating rate debt securities of a tenor and interest period most comparable to that of the Notes; or
such other rate as NAB determines having regard to available comparable indices; and

Tax Ratemeans the Australian corporate tax rate applicable to the franking account of NAB on the relevant Distribution Payment Date (expressed as a decimal).

2.5 Franking adjustments

If a Distribution is not franked to 100% under Part 3-6 of the Tax Act (and any provisions that revise or replace that Part), the Distribution will be calculated according to the following formula:

Distribution =

1 - Tax Rate x (1 - F)

where:

Dmeans the Distribution calculated under clause 2.4;

Tax Ratehas the meaning given in clause 2.4; and

Fmeans the applicable Franking Rate.

2.6 Conditions to payment of Distributions

A Distribution will be paid only if:

the Directors in their sole discretion resolve to pay the relevant Distribution on the relevant Distribution Payment Date; and
a Payment Condition does not exist on the relevant Distribution Payment Date.

2.7 Distributions are non-cumulative

Distributions are non-cumulative. If all or any part of a Distribution is not paid in full because of the restrictions in clause 2.6 or for any other reason:

NAB has no liability to pay the unpaid amount of the Distribution;
Holders have no claim or entitlement in respect of such non- payment; and
suchnon-payment does not constitute an event of default.

No interest accrues on any unpaid Distributions and the Holder has no claim or entitlement in respect of interest on any unpaid Distributions.

2.8 Restrictions in the case of non-payment

Subject to clause 2.9, if a Distribution on a Note has not been paid in

full (Relevant Distribution) on a Distribution Payment Date (Relevant Distribution Payment Date) for any reason (including because of the restrictions in clause 2.6), NAB must not, unless approved by an Ordinary Resolution, until and including the Distribution Payment Date following the Relevant Distribution Payment Date:

declare, determine to pay or pay any Ordinary Share Dividend; or
undertake anyBuy-Back or Capital Reduction,

unless the Relevant Distribution is paid in full within 3 Business Days of the Relevant Distribution Payment Date.

2.9 Exceptions to restrictions

The restrictions in clause 2.8 do not apply:

in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants of NAB or any member of the Group;

114| NAB Capital Notes 4

in connection with NAB or any of its Controlled Entities purchasing shares in NAB:
1. in connection with transactions for the account of customers of NAB or customers of any of its Controlled Entities; or
2. subject to APRA's prior written approval, in connection with the distribution or trading of shares in NAB in the ordinary course of business; or
to the extent that at the time a Distribution has not been paid on the Relevant Distribution Payment Date, NAB is legally obliged to pay on or after that date an Ordinary Share Dividend or is legally obliged to complete on or after that date aBuy-Back or Capital Reduction.

2.10 Notification of Distribution, Distribution Rate and other items

In respect of each Distribution Period, NAB must:
1. determine the Distribution Rate and the Distribution for that Distribution Period in respect of any Note; and
2. notify the Registrar and ASX as soon as practicable after its determination but, in any event, no later than the fourth Business Day of the Distribution Period.
NAB must notify the Registrar and ASX at least 5 Business Days before the relevant Record Date (or, if later, as soon as it decides not to pay a Distribution or as soon as a Payment Condition exists) if payment of the Distribution will not be made because of clause 2.6.
NAB may amend its calculation or determination of any date, rate or amount (or make appropriate alternative arrangements by way of adjustment) including as a result of the extension or reduction of the Distribution Period or calculation period without prior notice but must notify the Registrar and ASX promptly after doing so.

3 Mandatory Conversion on Mandatory Conversion Date

3.1 Mandatory Conversion

Subject to clauses 4 and 5, on the Mandatory Conversion Date NAB must Convert all (but not some) Notes on issue at that date into Ordinary Shares in accordance with clause 7 and this clause 3.

3.2 Mandatory Conversion Date

TheMandatory Conversion Date will be the first to occur of the following dates (each a Relevant Mandatory Conversion Date) on which the Mandatory Conversion Conditions are satisfied:

17 September 2029 (theScheduled Mandatory Conversion Date); or
the first Distribution Payment Date after the Scheduled Mandatory Conversion Date (aSubsequent Mandatory Conversion Date).

3.3 Mandatory Conversion Conditions

TheMandatory Conversion Conditions for each Relevant Mandatory Conversion Date are:

the VWAP on the 25th Business Day immediately preceding (but not including) the Relevant Mandatory Conversion Date (theFirst Test Date, provided that if no trading in Ordinary Shares took place on that date, the First Test Date is the first Business Day before the 25th Business Day immediately preceding (but not including) the Relevant Mandatory Conversion Date on which trading in Ordinary Shares took place) is greater than 56% of the Issue Date VWAP (the
First Mandatory Conversion Condition);
the VWAP during the period of 20 Business Days on which trading in Ordinary Shares took place immediately preceding (but not including) the Relevant Mandatory Conversion Date is greater
than 50.51% of the Issue Date VWAP (the Second Mandatory Conversion Condition); and

no Delisting Event applies in respect of the Relevant Mandatory Conversion Date (the
Third Mandatory Conversion Condition and together with the First Mandatory Conversion Condition and the Second Mandatory Conversion Condition, theMandatory Conversion Conditions).

3.4 Non-Conversion Notices

If:

the First Mandatory Conversion Condition is not satisfied in relation to a Relevant Mandatory Conversion Date, NAB will give notice to Holders between the 25th and the 21st Business Day before the Relevant Mandatory Conversion Date; or
the Second Mandatory Conversion Condition or the Third Mandatory Conversion Condition is not satisfied in relation to a Relevant Mandatory Conversion Date, NAB will give notice to Holders on or as soon as practicable after the Relevant Mandatory Conversion Date,

(each such notice a Non-ConversionNotice) that Mandatory Conversion will not (or, as the case may be, did not) occur on the Relevant Mandatory Conversion Date.

4 Mandatory Conversion on Loss Absorption Event

4.1 Loss Absorption Event

A Loss Absorption Event is each of:

a Common Equity Trigger Event; and
aNon-Viability Trigger Event.

4.2 Common Equity Trigger Event

ACommon Equity Trigger Event occurs when either or both of the Common Equity Tier 1 Ratio in respect of the NAB Level 1 Group and the NAB Level 2 Group as determined by NAB or APRA at any time is equal to or less than 5.125%.

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APPENDIX A:

TERMS OF NAB CAPITAL NOTES 4

NAB must immediately notify APRA in writing if it makes a determination under clause 4.2(a).
If a Common Equity Trigger Event occurs, NAB must immediately convert into Ordinary Shares or write off:
1. all Relevant Tier 1 Capital Instruments; or
2. a proportion of the Relevant Tier 1 Capital Instruments sufficient to return each of the Common Equity Tier 1 Ratio in respect of the NAB Level
  1 Group and the Common Equity Tier 1 Ratio in respect of the NAB Level 2 Group to a percentage above 5.125% determined by NAB for that ratio.

4.3 Non-Viability Trigger Event

ANon-Viability Trigger Event means APRA has provided a written determination to NAB that:
1. the conversion into Ordinary Shares or write off of Relevant Tier 1 Capital Instruments in accordance with their terms or by operation of law is necessary because without the conversion or write off, APRA considers that NAB would becomenon-viable; or
2. without a public sector injection of capital into, or equivalent support with respect to, NAB, APRA considers that NAB would becomenon-viable.
If aNon-Viability Trigger Event occurs under clause 4.3(a)(i), NAB must immediately convert into Ordinary Shares or write off:
1. all Relevant Tier 1 Capital Instruments; or
2. where APRA is satisfied that conversion or write off of a proportion of Relevant Tier 1 Capital Instruments will be sufficient to ensure that NAB will not becomenon-viable, that proportion of Relevant Tier 1 Capital Instruments.

Where aNon-Viability Trigger Event occurs under clause 4.3(a)(ii), NAB must immediately convert or write off all Relevant Tier 1 Capital Instruments then outstanding (including the Notes).

APRA has stated that it will not approve partial conversion or partial write off in those exceptional circumstances where a public sector injection of funds is deemed necessary.

4.4 Loss Absorption Event Conversion

On the date on which a Loss Absorption Event occurs (theLoss
Absorption Event Conversion Date) NAB must immediately determine:
1. the number of Notes that will Convert and the number of other Relevant Tier 1 Capital Instruments which will convert into Ordinary Shares or be written off (in accordance with clause 4.2 or clause 4.3, as applicable); and
2. the identity of Holders whose Notes will Convert on the Loss Absorption Event Conversion Date and in making that determination may make any decisions with respect to the identity of the Holders at that time as may be necessary or desirable to ensure Conversion occurs in an orderly manner, including disregarding any transfers of Notes that have not been settled or registered at that time.
Where NAB is required to Convert some but not all Notes on account of a Loss Absorption Event:
1. NAB must endeavour to select the Notes of Holders to be Converted on an approximately proportionate basis among all Holders, but may make adjustments among Holders to take account of the effect on marketable parcels and other logistical considerations, provided

always that nothing in the making of the selection or the adjustments is to delay or impede the Conversion taking effect on the Loss Absorption Event Conversion Date; and

1. where the specified currency of Relevant Tier 1 Capital Instruments is not the same for all Relevant Tier 1 Capital Instruments, NAB may treat them as if converted into a single currency of NAB's choice at such rate of exchange as NAB considers reasonable but may make adjustments among Holders and holders of other Relevant Tier 1 Capital Instruments having regard to the need to effect conversion immediately.
Despite any other provision in these Terms, on the Loss Absorption Event Conversion Date the relevant number (as determined under this clause 4.4) of Notes will Convert immediately and irrevocably.
A Loss Absorption Event occurs immediately on the day when NAB determines or is notified by APRA of the event whether or not the day is a Business Day and NAB must perform the obligations in respect of it on that day accordingly.
None of the following shall prevent, impede or delay the Conversion of Notes as required by this clause 4.4:
1. any failure to convert into Ordinary Shares or write off, or delay in the conversion into Ordinary Shares or write off of, other Relevant Tier 1 Capital Instruments;
1. any failure or delay in giving a Loss Absorption Event Notice;
1. any failure or delay in quotation of the Ordinary Shares to be issued on Conversion;
1. any obligation to treat Holders proportionately or to make the determinations or adjustments

116| NAB Capital Notes 4

in accordance with clause 4.4(b); or

1. any decision as to the identity of Holders whose Notes are to be Converted or Written Off.
From the Loss Absorption Event Conversion Date NAB shall treat the Holder in respect of its Notes as the holder of the Conversion Number of Ordinary Shares and will take all such steps, including updating any register, required to record the Conversion.

4.5 Write Off following failure to Convert

If Conversion required in respect of a Note on account of a Loss Absorption Event has not been effected within 5 days after the Loss Absorption Event Conversion Date for any reason (including an Inability Event), then Conversion will not occur and each such Note which, but for this clause 4.5, would be required to be Converted, will be Written Off with effect on and from the Loss Absorption Event Conversion Date.

Written Offmeans that, in respect of a Note and a Loss Absorption Event Conversion Date:

the Note will not be Converted in respect of the Loss Absorption Event Conversion Date and will not be Converted, Redeemed or Resold under these Terms on any subsequent date;
the relevant Holders' rights (including to payments of Distributions and Face Value) in relation to such Note are immediately and irrevocably terminated and written off with effect on and from the Loss Absorption Event Conversion Date.

4.6 Loss Absorption Event Notice

As soon as practicable following the occurrence of a Loss Absorption Event, NAB must give notice of the Loss Absorption Event (a Loss Absorption Event Notice) to the Registrar, ASX and the Holders which states the Loss Absorption Event Conversion Date,

the number of Notes Converted or Written Off and the relevant number of Relevant Tier 1 Capital Instruments converted into Ordinary Shares or written off.

4.7 Priority of Conversion obligations

Conversion on account of the occurrence of a Loss Absorption Event is not subject to the matters described in clause 3.3 as Mandatory Conversion Conditions.
Conversion required on account of a Loss Absorption Event takes place on the date, and
in the manner, required by clause 4.4, notwithstanding any other provision for Conversion, Redemption or Resale in these Terms.
In the event of any conflict between the requirements of clauses 4.3 and 4.2, clause 4.3 prevails.

5 Mandatory Conversion on Acquisition Event

5.1 Conversion on occurrence of Acquisition Event

If an Acquisition Event occurs, NAB must Convert all (but not some only) Notes on the Acquisition Conversion Date by notice (an Acquisition Conversion Notice) to the Registrar, ASX and the Holders in accordance with this clause 5 and clause 7.

5.2 Acquisition Conversion Notice

Subject to clause 5.3, NAB must give an Acquisition Conversion Notice to the Registrar, ASX and the Holders as soon as practicable and in any event within 10 Business Days after becoming aware of an Acquisition Event.

An Acquisition Conversion Notice must specify:

the details of the Acquisition Event to which the Acquisition Conversion Notice relates;

the date on which Conversion is to occur (theAcquisition Conversion Date), which must be:
1. the Business Day prior to the date reasonably determined by NAB to be the last date on which holders of Ordinary Shares are likely to be able to participate in the bid or scheme concerned or such other earlier date as NAB may reasonably determine having regard to the timing for implementation of the bid or scheme concerned; or
2. such later date as APRA may require; and
whether any Distribution will be paid in respect of the Notes on the Acquisition Conversion Date.

5.3 Where Acquisition Conversion Notice not required

Notwithstanding any provision of clause 5.1 or clause 5.2, NAB is not required to give an Acquisition Conversion Notice if either or both of the Optional Conversion Restrictions would apply (reading those restrictions as if a reference to an Optional Conversion Notice were a reference to an Acquisition Conversion Notice). In those circumstances, clause 5.4 will apply.

5.4 Deferred Conversion on Acquisition Event

If clause 5.3 applies or NAB has given an Acquisition Conversion Notice but, if the Acquisition Conversion Date were a Relevant Mandatory Conversion Date for the purposes of clause 3.2, either the Second Mandatory Conversion Condition (applied as if it referred to 20.20% of the Issue Date VWAP) or the Third Mandatory Conversion Condition would not be satisfied in respect of that date, then notwithstanding any other provision of these Terms (but without limitation to the operation of clause 4.7):

the Acquisition Conversion Notice, if given, is taken to be revoked and Conversion will not occur

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on the Acquisition Conversion Date specified in the Acquisition Conversion Notice;

NAB will notify the Holders as soon as practicable that Conversion will not (or, as the case may be, did not) occur (aDeferred Acquisition Conversion Notice); and
NAB must, unless clause 5.3 then applies, give an Acquisition Conversion Notice (or, as the case may be, a new Acquisition Conversion Notice) on or before the 25th Business Day prior to the immediately succeeding Distribution Payment Date which is at least 25 Business Days after the date on which the Deferred Acquisition Conversion Notice was given.

The Acquisition Conversion Notice given in accordance with paragraph

above must comply with the requirements in clause 5.2.

If this clause 5.4 applies but:

clause 5.3 applies in respect of the Distribution Payment Date referred to in paragraph (c) such that no Acquisition Conversion Notice (or, as the case may be, no new Acquisition Conversion Notice) is given under this clause 5.4; or
an Acquisition Conversion Notice (or, as the case may be, a new Acquisition Conversion Notice) is given under this clause 5.4 but, if the Acquisition Conversion Date specified in the Acquisition Conversion Notice were a Relevant Mandatory Conversion Date for the purpose of clause 3.2, either the Second Mandatory Conversion Condition (applied as if it referred to 20.20% of the Issue Date VWAP) or the Third Mandatory Conversion Condition would not be satisfied in respect of that date,

then this clause 5.4 will be reapplied in respect of each subsequent scheduled quarterly Distribution Payment Date until a Conversion occurs.

6 Optional Conversion

6.1 Optional Conversion by NAB

NAB may, with APRA's prior written approval, by notice to the Registrar, ASX and the Holders (an Optional Conversion Notice) elect to Convert:

all or some Notes on an Optional Conversion Date following the occurrence of a Tax Event or a Regulatory Event;
all or some Notes on an Optional Conversion Date following
the occurrence of a Potential Acquisition Event; or
all or some Notes on 17 September 2027.

Holders should not expect that APRA's approval will be given for a Conversion of Notes under these Terms.

6.2 When an Optional Conversion Notice may be given

An Optional Conversion Notice under this clause 6 may be given:

in the case of clause 6.1(a), on any day following the occurrence of the Tax Event or Regulatory Event (as applicable) provided that an Optional Conversion Notice cannot be given in the period of 20 Business Days preceding (and not including) a Relevant Mandatory Conversion Date where the First Mandatory Conversion Condition has been met in respect of that Relevant Mandatory Conversion Date;
in the case of clause 6.1(b), on any day following the occurrence of the Potential Acquisition Event;
in the case of clause 6.1(c), no earlier than 50 Business Days and no later than 25 Business Days before 17 September 2027.

Subject to clause 4.7, an Optional Conversion Notice once given is irrevocable.

6.3 Contents of Optional Conversion Notice

An Optional Conversion Notice must specify:

in the case of clause 6.1(a) or clause 6.1(b), the details of the Tax Event, Regulatory Event or Potential Acquisition Event to which the Optional Conversion Notice relates;
the date on which Conversion is to occur (theOptional Conversion Date) which:
1. in the case of a Tax Event or a Regulatory Event, is the Next Distribution Payment Date, unless NAB determines an earlier date having regard to the best interests of Holders as a whole and the relevant event; or
2. in the case of a Potential Acquisition Event, is:
3. 1. the Business Day prior to the date reasonably determined by NAB to be the last date on which holders of Ordinary Shares can participate in the bid or scheme concerned; or
  2. such other earlier date as NAB may reasonably determine having regard to the timing for implementation of the bid or scheme concerned; or
  3. such later date as APRA may require; or
4. in the case of clause 6.1(c), is 17 September 2027.
if less than all Notes are subject to Conversion, the proportion of the Notes that are to be Converted; and
whether any Distribution will be paid in respect of the Notes to be Converted on the Optional Conversion Date.

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6.4 Restrictions on election of Conversion

NAB may not elect to Convert the Notes under this clause 6 if:

on the second Business Day before the date on which an Optional Conversion Notice is to be sent by NAB (or, if trading in Ordinary Shares did not occur on that date, the last Business Day prior to that date on which trading in Ordinary Shares occurred) (theNon- Conversion Test Date) the VWAP on that date is less than or equal to 22.50% of the Issue Date VWAP (the First Optional Conversion Restriction); or
a Delisting Event applies in respect of theNon-Conversion Test Date (the Second Optional Conversion Restrictionand together with the First Optional Conversion Restriction, the Optional Conversion Restrictions).

6.5 Deferred Conversion on Optional Conversion Date

If NAB has given an Optional Conversion Notice but, if the Conversion Date were a Relevant Mandatory Conversion Date for the purposes of clause 3.2, either the Second Mandatory Conversion Condition (applied as if it referred to 20.20% of the Issue Date VWAP) or the Third Mandatory Conversion Condition would not be satisfied in respect of that date, then, notwithstanding any other provision of these Terms:

the Optional Conversion Date will be deferred until the first Distribution Payment Date on which the Mandatory Conversion Conditions (applied as if the percentage of the Issue Date VWAP were 22.50% for the First Mandatory Conversion Condition and 20.20% for the Second Mandatory Conversion Condition) would be satisfied if that Distribution Payment Date were a Relevant Mandatory Conversion Date for the purposes of clause 3.2 (theDeferred Conversion Date);

NAB must Convert the Notes on the Deferred Conversion Date (unless the Notes are Converted, Written Off, Redeemed or Resold earlier in accordance with these Terms); and
until the Deferred Conversion Date, all rights attaching to the Notes will continue as if the Optional Conversion Notice had not been given.

NAB will notify the Holders on or as soon as practicable after an Optional Conversion Date in respect of which this clause 6.5 applies that Conversion did not occur on that Conversion Date.

7 Conversion mechanics

7.1 Conversion

If NAB elects to Convert Notes (with APRA's prior written approval) or must Convert Notes in accordance with these Terms, then, subject to this clause 7, the following provisions shall apply:

each Holder will be issued a number of Ordinary Shares for each Note that is being Converted on the Conversion Date equal to the Conversion Number, where theConversion Numberis the lesser of the number calculated according to the following formula and the Maximum Conversion Number:

Face Value

99% xVWAP

where:

VWAP(expressed in dollars and cents) means the VWAP during the VWAP Period;

Maximum Conversion Number means a number calculated according to the following formula:

Maximum Conversion Number =

Face Value

(Issue Date VWAP xRelevant Fraction)

where:

Relevant Fraction means:

if Conversion is occurring on a Mandatory Conversion Date, 0.5; and

1. if Conversion is occurring for any other reason, 0.2.
each Holder's rights (including to payment of Distributions, other than the Distribution if any, payable on a Conversion Date that is not a Loss Absorption Event Conversion Date) in relation to each Note that is being Converted will be immediately and irrevocably terminated for an amount equal to the Face Value of that Note and NAB will apply the Face Value by way of payment for subscription for the Conversion Number of Ordinary Shares to be issued under clause 7.1(a). Each Holder is taken to have irrevocably directed that any amount payable under this clause 7.1(b) is to be applied as provided for in this clause 7.1(b) and no Holder has any right to payment in any other way;
if the total number of Ordinary Shares to be issued to a Holder in respect of their aggregate holding of Notes upon Conversion includes a fraction of an Ordinary Share, that fraction of an Ordinary Share will be disregarded; and
the rights attaching to the Ordinary Shares issued upon Conversion do not take effect until 5.00pm Sydney time on the Mandatory Conversion Date, Acquisition Conversion Date or the Optional Conversion Date (as the case may be) or, in the case of a Conversion on the Loss Absorption Event Conversion Date, the time at which such Conversion occurs on that date. At that time:
1. all other rights conferred or restrictions imposed on that Note under these Terms will no longer have effect (except for rights relating to a Distribution which has been determined to be payable on a Conversion Date (that is not a Loss Absorption Event Conversion Date), which rights will continue); and
2. the Ordinary Shares issued upon the Conversion will rank equally with all other Ordinary Shares.

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7.2 Adjustments to VWAP

For the purposes of calculating the VWAP in these Terms:

where, on some or all of the Business Days in the relevant VWAP Period, Ordinary Shares have been quoted on ASX as cum dividend or cum any other distribution or entitlement and Notes will Convert into Ordinary Shares after the date those Ordinary Shares no longer carry that dividend or any other distribution or entitlement, then the VWAP on the Business Days on which those Ordinary Shares have been quoted cum dividend or cum any other distribution or entitlement shall be reduced by an amount (theCum Value) equal to:
1. (in case of a dividend or other distribution), the amount
  of that dividend or other distribution including, if the dividend or other distribution is franked, the amount
  that would be included in the assessable income of a recipient of the dividend or other distribution who is both a resident of Australia and a natural person under the Tax Act;
2. (in the case of any other entitlement that is not a dividend or other distribution under clause 7.2(a)(i) which is traded on ASX on any of those Business Days), the volume weighted average sale price of all such entitlements sold on ASX during the VWAP Period on the Business Days on which those entitlements were traded; or
3. (in the case of any other entitlement which is not traded on ASX during the VWAP Period), the value of the entitlement as reasonably determined by the Directors; and
where, on some or all of the Business Days in the VWAP Period, Ordinary Shares have been quoted

on ASX as ex dividend or ex any other distribution or entitlement, and Notes will Convert into Ordinary Shares in respect of which the relevant dividend or other distribution or entitlement would be payable, the VWAP on the Business Days on which those Ordinary Shares have been quoted ex dividend or ex any other distribution or entitlement shall be increased by the Cum Value.

7.3 Adjustments to VWAP for divisions and similar transactions

Where during the relevant VWAP Period there is a change in the number of Ordinary Shares on issue as a result of a Reorganisation, in calculating the VWAP for that VWAP Period the VWAP on each Business Day in the relevant VWAP Period which falls before the date on which trading in Ordinary Shares is conducted on a post Reorganisation basis shall be adjusted by multiplying it by the following formula:

where:

Ameans the aggregate number of Ordinary Shares immediately before the Reorganisation; and

Bmeans the aggregate number of Ordinary Shares immediately after the Reorganisation.

Any adjustment made by NAB in accordance with clause 7.3(a) will be effective and binding on Holders under these Terms and these Terms will be construed accordingly. Any such adjustment must be promptly notified to the Holders.

7.4 Adjustments to Issue Date

VWAP

For the purposes of determining the Issue Date VWAP, adjustments to the VWAP will be made in accordance with clauses 7.2 and 7.3 during the VWAP

Period for the Issue Date VWAP. On and from the Issue Date, adjustments to the Issue Date VWAP:

may be made in accordance with clauses 7.5 to 7.7 (inclusive); and
if so made, will correspondingly:
1. affect the application of the Mandatory Conversion Conditions and the Optional Conversion Restrictions; and
2. cause an adjustment to the Maximum Conversion Number.
Any adjustment made by NAB in accordance with clause 7.5(a) or 7.6(a) will be effective and binding on Holders under these Terms and these Terms will be construed accordingly.

7.5 Adjustments to Issue Date VWAP for bonus issues

Subject to clause 7.5(b), if NAB makes a pro rata bonus issue of Ordinary Shares to holders of Ordinary Shares generally, the Issue Date VWAP will be adjusted in accordance with the following formula:

where:

Vmeans the Issue Date VWAP applying immediately after the application of this formula;

Vomeans the Issue Date VWAP applying immediately prior to the application of this formula;

RDmeans the number of Ordinary Shares on issue immediately prior to the allotment of new Ordinary Shares pursuant to the bonus issue; and

RNmeans the number of Ordinary Shares issued pursuant to the bonus issue.

Clause 7.5(a) does not apply to Ordinary Shares issued as part of a bonus share plan, employee or executive share plan, executive option plan, share top up plan, share purchase plan or a dividend reinvestment plan.

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For the purpose of clause 7.5(a), an issue will be regarded as a pro rata issue notwithstanding that NAB does not make offers to some or all holders of Ordinary Shares with registered addresses outside Australia, provided that in so doing NAB is not in contravention of the ASX Listing Rules.
No adjustments to the Issue Date VWAP will be made under this clause 7.5 for any offer of Ordinary Shares not covered by clause 7.5(a), including a rights issue or other essentially pro rata issue.
The fact that no adjustment is made for an issue of Ordinary Shares except as covered by clause 7.5(a) shall not in any way restrict NAB from issuing Ordinary Shares at any time on such terms as it sees fit nor be taken to constitute a modification or variation of rights or privileges of Holders or otherwise requiring any consent or concurrence.

7.6 Adjustment to Issue Date VWAP for divisions and similar transactions

If at any time after the Issue Date there is a change in the number of Ordinary Shares on issue as a result of a Reorganisation, NAB shall adjust the Issue Date VWAP by multiplying the Issue Date VWAP applicable on the Business Day immediately before the date of any such Reorganisation by the following formula:

where:

Ameans the aggregate number of Ordinary Shares immediately before the Reorganisation; and

Bmeans the aggregate number of Ordinary Shares immediately after the Reorganisation.

Each Holder acknowledges that NAB may consolidate, divide or reclassify securities so that there is a lesser or greater number of

Ordinary Shares at any time in its absolute discretion without any such action constituting a modification or variation of rights or privileges of Holders or otherwise requiring any consent or concurrence.

7.7 No adjustment to Issue Date VWAP in certain circumstances

Despite the provisions of clauses 7.5 and 7.6, no adjustment shall be made to the Issue Date VWAP where such adjustment (rounded if applicable) would be less than one per cent of the Issue Date VWAP then in effect.

7.8 Announcement of adjustments

NAB will notify the Registrar, ASX and the Holders (an Adjustment Notice) of any adjustment to the Issue Date VWAP under this clause 7 within 10 Business Days of NAB determining the adjustment.

7.9 Ordinary Shares

Each Ordinary Share issued or arising upon Conversion ranks equally with all other fully paid Ordinary Shares.

7.10 Listing Ordinary Shares issued on Conversion

NAB shall use all reasonable endeavours to list the Ordinary Shares issued upon Conversion of Notes

on ASX.

7.11 Failure to Convert (other than on account of a Loss Absorption Event)

If on a Conversion Date (other than a Loss Absorption Event Conversion Date), an Ordinary Share is not issued or delivered in respect of a Note, that Note remains on issue (and will continue to entitle the Holder to Distributions in accordance with clause 2) until the Ordinary Share is issued to the Holder (which date shall be the Conversion Date in respect of that Note) or the Note is Redeemed (which date shall be the Redemption Date in respect of that Note) or Resold

(which date shall be the Resale Date in respect of that Note), and a Holder shall have no claim in respect of that failure other than for specific performance

of the obligation to issue or deliver the Ordinary Shares. This clause 7.11 does not affect the obligation of NAB to issue or deliver the Ordinary Shares when required in accordance with these Terms.

7.12 Issue to an Eligible Nominee

Where Notes are required to be Converted and:
1. the Notes are held by a Foreign Holder, unless NAB is satisfied that the laws of the Foreign Holder's country of residence permit the issue of Ordinary Shares to the Foreign Holder, either unconditionally or after compliance with conditions which NAB in its absolute discretion regards as acceptable and not unduly onerous; or
2. the Holder has notified NAB that it does not wish to receive Ordinary Shares as a result of Conversion, which notice may be given by the Holder at any time on or after the Issue Date and no less than 15 Business Days prior to the Conversion Date;

the Ordinary Shares which the Holder is obliged to accept will be issued to a nominee (which must not be NAB or any Related Entity of NAB) (Eligible Nominee) but otherwise in accordance with clause 7.1 and on terms that, at the first reasonable opportunity to sell the Ordinary Shares, the Eligible Nominee will arrange for their sale and pay to the relevant Holder on a date determined by the Eligible Nominee a cash amount equal to the Attributable Proceeds of the relevant Holder.

Where Notes are required to be Converted and a FATCA Withholding is required to be made in respect of Ordinary Shares issued on Conversion of the Notes, the Ordinary Shares which the Holder is obliged to accept will

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be issued to the Holder only to the extent (if at all) that the issue is net of FATCA Withholding and NAB will issue the balance of the Ordinary Shares (if any) to an Eligible Nominee who will sell those Ordinary Shares and deal with any proceeds of their disposal in accordance with FATCA.

The issue of Ordinary Shares in accordance with clause 7.12(a) or clause 7.12(b) above (as applicable) will satisfy all obligations of NAB in connection with the Conversion, the Notes will be deemed Converted and will be dealt with in accordance with clause 7.1 and, on and from the issue of Ordinary Shares, the rights of a Holder the subject of clause 7.12(a) or clause 7.12(b) above are limited to its rights in respect of the Ordinary Shares or the Attributable Proceeds as provided in those clauses.
Without prejudice to the express obligations of NAB and the Eligible Nominee under this clause 7.12:
1. NAB has no duty to enquire into the law of a Foreign Holder's country of residence; and
2. neither NAB nor any Eligible Nominee owes any obligations or duties to Holders in relation to the price at which Ordinary Shares are sold or has any liability for any loss suffered by a Holder as a result of the sale of Ordinary Shares where required by this clause 7.12.
If Conversion is occurring because of the occurrence of a Loss Absorption Event and has not been effected within 5 days after the Conversion Date for any reason (including an Inability Event), then clause 4.5 will apply.

8 Optional Redemption

8.1 Optional Redemption by NAB

NAB may, with APRA's prior written approval, by notice to the Registrar, ASX and the Holders (an Optional Redemption Notice), elect to Redeem:

all or some Notes on a Redemption Date following the occurrence of a Tax Event or a Regulatory Event; or
all or some Notes on 17 September 2027.

Holders should not expect that APRA's approval will be given for any Redemption of Notes under these Terms.

8.2 When Optional Redemption Notice may be given

An Optional Redemption Notice under this clause 8 may be given:

in the case of clause 8.1(a), on any day following the occurrence of the Tax Event or Regulatory Event (as applicable) provided that an Optional Redemption Notice cannot be given in the period of 20 Business Days preceding (and not including) a Relevant Mandatory Conversion Date where the First Mandatory Conversion Condition has been met in respect of that Relevant Mandatory Conversion Date; and
in the case of clause 8.1(b), no earlier than 60 Business Days and no later than 5 Business Days before 17 September 2027.

Subject to clause 4.7, an Optional Redemption Notice once given is irrevocable.

8.3 Contents of Optional Redemption Notice

An Optional Redemption Notice must specify:

in the case of clause 8.1(a), the details of the Tax Event or Regulatory Event to which the Optional Redemption Notice relates;
the date on which Redemption is to occur (theRedemption Date), which:
1. in the case of a Tax Event or a Regulatory Event, is the Next Distribution Payment Date, unless NAB determines an earlier Redemption Date having regard to the best interests of Holders as a whole

and the relevant event; or

1. in the case of clause 8.1(b), 17 September 2027;
if less than all Notes are subject to Redemption, the proportion of the Notes that are to be Redeemed; and
whether any Distribution will be paid in respect of the Notes to be Redeemed on the Redemption Date.

8.4 Restrictions on election by NAB of Redemption

NAB may only elect to Redeem the Notes if APRA is satisfied that either:

Notes the subject of the Redemption are replaced concurrently or beforehand with a capital instrument of the same or better quality and the replacement of the instrument is done under conditions that are sustainable for NAB's income capacity; or
the capital position of the NAB Level 1 Group and the NAB Level 2 Group will remain adequate after NAB elects to Redeem the Notes.

9 Redemption mechanics

9.1 Redemption mechanics to apply to Redemption

If, subject to APRA's prior written approval and compliance with the conditions in clause 8.4, NAB elects to Redeem a Note in accordance with these Terms, the provisions of this clause 9 apply to that Redemption.

9.2 Redemption

Notes will be redeemed by payment on the Redemption Date of an amount equal to the Face Value to the Holder.

9.3 Effect of Redemption on Holders

On the Redemption Date the only right Holders will have in respect of Notes will be to obtain the Face Value payable in accordance with these Terms and any Distribution NAB has determined is payable on that date. Upon the Face Value being paid (or taken to be

122| NAB Capital Notes 4

paid in accordance with clause 14), all other rights conferred, or restrictions imposed, by Notes will no longer have effect.

10 Optional Resale

10.1 Optional Resale by NAB

NAB may, with APRA's prior written approval, by notice to the Registrar, ASX and the Holders (an Optional Resale Notice), elect to Resell:

all or some Notes on a Resale Date following the occurrence of a Tax Event or a Regulatory Event; or
all or some Notes on 17 September 2027.

Holders should not expect that APRA's approval will be given for any Resale of Notes under these Terms.

10.2 When Optional Resale Notice may be given

An Optional Resale Notice under this clause 10 may be given:

in the case of clause 10.1(a), on any day following the occurrence of the Tax Event or Regulatory Event (as applicable) provided that an Optional Resale Notice cannot be given in the period of 20 Business Days preceding (and not including) a Relevant Mandatory Conversion Date where the First Mandatory Conversion Condition has been met in respect of that Relevant Mandatory Conversion Date; or
in the case of clause 10.1(b), no earlier than 60 Business Days and no later than 5 Business Days before 17 September 2027.

Subject to clauses 4.7, 11.2 and 11.6, an Optional Resale Notice once given is irrevocable.

10.3 Contents of Optional Resale Notice

An Optional Resale Notice must specify:

in the case of clause 10.1(a), the details of the Tax Event or Regulatory Event to which the Optional Resale Notice relates;

the date on which Resale is to occur (theResale Date), which:
1. in the case of a Tax Event or a Regulatory Event, is the Next Distribution Payment Date, unless NAB determines an earlier Resale Date having regard to the best interests of Holders as a whole and the relevant event; or
2. in the case of clause 10.1(b), 17 September 2027;
if less than all Notes are subject to Resale, the proportion of the Notes that are to be Resold;
the identity of the Nominated Purchasers for that Resale and the Resale Price; and
whether any Distribution will be paid in respect of the Notes to be Resold on the Resale Date.

11 Resale mechanics

11.1 Resale mechanics

If NAB elects to Resell Notes in accordance with these Terms, subject to clause 11.2, the provisions of this clause 11 apply to that Resale.

11.2 Appointment of Nominated Purchaser

NAB must appoint one or more Nominated Purchasers for the Resale on such terms as may be agreed between NAB and the Nominated Purchasers (and, to the extent any such conditions may cause the Notes to cease to be Additional Tier 1 Capital, with the prior written approval of APRA) including:
1. as to the conditions of any Resale, the procedures for settlement of such Resale and the circumstances in which the Optional Resale Notice may be amended, modified, added to or restated;
2. as to the substitution of another entity (not being NAB or a Related Entity of NAB) as Nominated Purchaser if, for any reason, NAB is not satisfied

that the Nominated Purchaser will perform its obligations under this clause 11; and

1. as to the terms (if any) on which any Notes acquired by a Nominated Purchaser may be Redeemed, Converted or otherwise dealt with.
If NAB appoints more than one Nominated Purchaser in respect of a Resale, all or any of the Notes held by a Holder which are being Resold may be purchased by any one or any combination of the Nominated Purchasers, as determined by NAB for the Resale Price.

11.3 Identity of Nominated Purchasers

NAB may not appoint itself or any Related Entity of NAB as a Nominated Purchaser.

11.4 Irrevocable offer to sell Notes

Each Holder on the Resale Date is taken irrevocably to offer to sell Notes the subject of an Optional Resale Notice to the Nominated Purchaser or Nominated Purchasers on the Resale Date for the Resale Price.

11.5 Effect of Resale

On the Resale Date subject to payment by the Nominated Purchaser of

the Resale Price to the Holders, all right, title and interest in such Notes (excluding the right to any Distribution payable on that date) will be transferred to the Nominated Purchaser free from Encumbrances.

11.6 Effect of failure by Nominated Purchaser or Nominated Purchasers to pay

If a Nominated Purchaser does not pay the Resale Price to the Holders on the Resale Date (a Defaulting Nominated Purchaser):

the Optional Resale Notice as it relates to the Defaulting Nominated Purchaser will be void;

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Notes will not be transferred to the Defaulting Nominated Purchaser on the Resale Date; and
Holders will continue to hold the Notes referable to the Defaulting Nominated Purchaser until they are otherwise Redeemed, Converted or Resold in accordance with these Terms.

12 General provisions relating to optional Conversion, Redemption and Resale

12.1 Treatment of Holders

At any time that NAB may elect for the Notes to be Converted, Redeemed or Resold, NAB may specify which of Conversion, Redemption and Resale applies to a particular Note. Without limitation to the foregoing:

NAB may select any one or more of Conversion, Redemption or Resale to apply to the Note held by a Holder; and
NAB may select a different combination of Conversion, Redemption and Resale in respect of Notes held by different Holders,

but otherwise NAB must endeavour to treat Holders in approximate proportion to their holdings of Notes (except that NAB may discriminate to take account of the effect on marketable parcels and other logistical considerations).

12.2 Holder acknowledgements relating to Conversion

Each Holder irrevocably:

upon Conversion of Notes in accordance with these Terms, consents to becoming a member of NAB and agrees to be bound by the Constitution, in each case in respect of the Ordinary Shares issued on Conversion;
1. acknowledges and agrees that it is obliged to accept Ordinary Shares upon a Conversion notwithstanding anything that might otherwise affect a Conversion of

Notes including:

1. any change in the financial position of NAB since the Issue Date;
2. any disruption to the market or potential market for the Ordinary Shares or to capital markets generally; or
3. any breach by NAB of any obligation in connection with the Notes;
acknowledges and agrees that:
1. where clause 4.4 applies:
2. 1. there are no other conditions to a Loss Absorption Event occurring as and when provided in clauses 4.2, 4.3 and 4.4;
  2. Conversion must occur immediately on the Loss Absorption Event and that may result in disruption or failures in trading or dealings in the Notes;
  3. it will not have any rights to vote or right of approval in respect of any Loss Absorption Event Conversion; and
  4. the Ordinary Shares issued on Loss Absorption Event Conversion may not be quoted at the time of issue, or at all;
3. the only conditions to a Mandatory Conversion are the Mandatory Conversion Conditions;
4. the only conditions to a Conversion under clause 5 or a Conversion under clause 6 are the conditions expressly applicable to such Conversion as provided in clauses 5 and
  6 and no other conditions or events will affect Conversion;
5. clause 4.5 is a fundamental term of the Notes and where this applies, no other conditions or events will affect its operation; and

1. a Holder has no right to request a Conversion, Redemption or Resale of any Note or to determine whether (or in what combination) Notes are Converted, Redeemed or Resold; and
agrees to provide to NAB any information necessary to give effect to a Conversion and, if applicable, to surrender any certificate relating to Notes on the occurrence of the Conversion.

12.3 Purchases

NAB or any Related Entity of NAB may at any time purchase the Notes in the open market or otherwise and at any price or consideration, subject to the prior written approval of APRA.

Holders should not expect that APRA's approval will be given for any purchase of Notes under these Terms.

13 Title and transfer

13.1 Title

Title to a Note passes when details of the transfer are entered in the Register.

13.2 Register conclusive as to ownership

Entries in the Register in relation to a Note constitute conclusive evidence that the person so entered is the absolute owner of the Note subject to correction for fraud or error.

13.3 Non-recognition of interests

Except as required by law or directive and as provided in these Terms, NAB and the Registrar must treat the person whose name
is entered in the Register as the holder of a Note as the absolute owner of that Note.
No notice of any trust, Encumbrance or other interest in, or claim to, any Notes will be entered in the Register. Neither NAB nor the Registrar need take notice of any trust, Encumbrance or other interest in, or claim to, any Notes, except as ordered by

124| NAB Capital Notes 4

a court of competent jurisdiction or required by law, and no trust, Encumbrance or other interest in, or claim to, any Notes will in any way affect any provision of these Terms (including without limitation any transfer of the Notes contemplated by this clause 13).

This clause 13.3 applies whether or not a payment has been made when scheduled on a Note and despite any notice of ownership, trust or interest in the Note.

13.4 Joint Holders

Where two or more persons are entered in the Register as joint Holders of a Note, they are taken to hold the Note as joint tenants with a right of survivorship, but the Registrar is not bound to register more than three persons as joint Holders of a Note.

13.5 Dealings in whole

At all times, the Notes may be held or transferred only in whole Notes.

13.6 Transfer

Subject to the ASX Listing Rules, the Notes will be transferable only in accordance with these Terms and the rules and regulations of CHESS.

13.7 Instruments of transfer

A Holder may transfer a Note:

by a proper transfer according to the rules and regulations of CHESS;
by a proper transfer under any other computerised or electronic system recognised by the Corporations Act;
under any other method of transfer which operates in relation to the trading of securities on any securities exchange outside Australia on which the Notes are quoted or which is applicable to NAB; or
by any proper or sufficient instrument of transfer of marketable securities under applicable law.

13.8 Transfer on the occurrence of certain events

The Registrar must register a transfer of a Note to or by a person who is entitled to make or receive the transfer as a consequence of:

death, bankruptcy, liquidation or winding up of a Holder; or
a vesting order by a court or other body with power to make the order,

on receipt of such evidence of entitlement that the Registrar or NAB requires.

13.9 Power to refuse to register

If permitted by the ASX Listing Rules, NAB may:

request any applicable CS Facility Operator to apply a holding lock to prevent a transfer of Notes from being registered on the CS Facility'ssub-register; or
refuse to register a transfer of Notes to which paragraph (a) does not apply.

13.10 Obligation to refuse to register

NAB must:

request any applicable CS Facility Operator to apply a holding lock to prevent a transfer of Notes from being registered on the CS Facility'ssub-register; or
refuse to register a transfer of Notes to which paragraph (a) does not apply;

if:

the ASX Listing Rules require NAB to do so; or
the transfer is in breach of the ASX Listing Rules.

13.11 Written notice to

Holder of holding lock or refusal

If in the exercise of its rights under clause 13.9 or 13.10, NAB requests the application of a holding lock to prevent a transfer of Notes or refuses to register a transfer of Notes, NAB must give written notice of the request

or refusal to the Holder of the Notes, the transferee and the broker lodging the transfer, if any. Failure to give such notice does not invalidate NAB's decision.

14 Payments

14.1 Payments to Holders

Each payment in respect of a Note will be made to the person that is recorded in the Register as the Holder of that Note as at the Relevant Time on the Record Date for that payment.

14.2 Payments to accounts

Payments will be made by crediting on the relevant payment date the amount due to an Australian Dollar bank account maintained in Australia with a financial institution, specified by the Holder to the Registrar by close of business on the Record Date for that payment, or in any other manner NAB determines.

14.3 Uncompleted payments

If:

a Holder has not notified the Registrar by close of business on the Record Date of an Australian Dollar bank account maintained in Australia with a financial institution to which payments in respect of the Note may be credited; or
the transfer of any amount for payment to the credit of the nominated account does not complete for any reason,

NAB will send a notice to the address most recently notified by the Holder advising of the uncompleted payment and the amount of the uncompleted payment will be held as a deposit in a non-interest bearing, special purpose account maintained by NAB or the Registrar until the first to occur of the following:

the Holder nominates a suitable Australian Dollar account maintained in Australia with a financial institution to which the payment may be credited;

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claims may no longer be made in respect of that amount, in which case the monies shall be paid to and be the property of NAB; or
NAB becomes entitled or obliged to deal with the amount in accordance with the law relating to unclaimed monies.

When this clause 14.3 applies the amount payable in respect of the Notes shall be treated as having been paid on the date scheduled for payment and no interest is payable in respect of any delay in payment.

14.4 Time limit on claims

A claim against NAB for a payment under a Note is void unless made within 5 years from the date on which payment first became due.

14.5 Determination and calculation final

Except where there is fraud or a manifest error, any determination or calculation which NAB makes in accordance with these Terms is final and binds NAB, the Registrar and each Holder.

14.6 Rounding

For the purposes of any calculations required under these Terms:

all percentages resulting from the calculations must be rounded,
if necessary, to the nearest one hundred thousandth of a percentage point (with 0.000005 percent being rounded up to 0.00001 percent);
all figures must be rounded to four decimal places (with halves being rounded up); and
all amounts that are due and payable in respect of a Holder's aggregate holding of Notes must be rounded to the nearest cent (with halves being rounded up).

14.7 Joint Holders

A payment to any one joint Holder of a Note will discharge NAB's liability in respect of the payment.

14.8 No set-off

A Holder does not have any right to set-off any amounts owing to it by NAB in connection with the Notes against any amount owing by it to NAB in connection with the Notes or otherwise.

NAB does not have any right to set-off any amounts owing to it by a Holder against any amount owing by it to the Holder in connection with the Notes.

14.9 Payments subject to law

All payments are subject to applicable law, but without prejudice to the provisions of clause 15.

14.10 Payments on Business Days

If a payment:

is due on a Note on a day which is not a Business Day, then the due date for payment will be postponed to the next day that is a Business Day; or
is to be made to an account on a Business Day on which banks are not open for general banking business in the place in which the account is located, then the due date for payment will be the next day on which banks are open for general banking business in that place,

and in either case, the Holder is not entitled to any additional payment in respect of that delay.

Nothing in this clause 14.10 applies to any payment referred to in clause 7.1(b) on a Loss Absorption Event Conversion Date.

15 Taxation

15.1 Withholdings and deductions

NAB must make all payments in respect of Notes without set-off or counterclaim and without any withholding or deduction in respect of Taxes, unless the withholding or deduction is required by law or permitted by this clause 15.

15.2 FATCA

NAB, in its absolute discretion, may withhold or deduct from payments or from the issue of Ordinary Shares to a Holder where it is required to do so under or in connection with FATCA, or where it has reasonable grounds to suspect that the Holder or a beneficial owner of Notes may be subject to FATCA, and may deal with such payment, the issue of Ordinary Shares and the Holder's Notes in accordance with FATCA.

NAB, in its absolute discretion, may require information from the Holder to be provided to the IRS or any other relevant authority, to determine the applicability of any withholding under or in connection with FATCA.

15.3 No gross up

If any withholding or deduction arises under or in connection with applicable law or FATCA, NAB will not be required to pay any further amounts or issue any further Ordinary Shares on account of such withholding or deduction or otherwise reimburse or compensate, or make any payment to, a Holder

or a beneficial owner of Notes for or in respect of any such withholding or deduction and it will be taken to have made the payment or issue of Ordinary Shares to the Holder in full by accounting for the withholding or deduction to the relevant revenue authority and paying the balance to the Holder.

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15.4 Tax file number

NAB will, if required, withhold an amount from payments of Distributions on the Notes at the highest marginal tax rate plus the highest Medicare levy if a Holder has not supplied an appropriate tax file number, Australian Business Number or exemption details.

16 Ranking and subordination

16.1 Ranking of Distributions

Notes rank in respect of payment of Distributions:

in priority to Ordinary Shares;
equally and without any preference amongst themselves and all Equal Ranking Instruments; and
junior to the claims of all Senior Creditors.

16.2 Ranking in a winding up

If an order is made by a court of competent jurisdiction in Australia (other than an order successfully appealed or permanently stayed within 60 days), or an effective resolution passed, for the winding up of NAB in Australia, the Notes are redeemable for their Face Value in accordance with this clause 16.2.
In a winding up of NAB in Australia, a Note confers upon the Holder, subject to clauses 4.4 and 4.5, the right to payment in cash of the Face Value on a subordinated basis in accordance with clause 16.2(c), but no further or other claim on NAB in the winding up of NAB in Australia.
Holders will rank for payment of the Face Value in a winding up of NAB in Australia:
1. in priority to Ordinary Shares;
2. equally among themselves and with the claims of all Equal Ranking Instruments; and
3. junior to the claims of all Senior Creditors with respect to priority of payment in a winding up in that:
4. 1. all claims of Senior

Creditors must be paid in full (including in respect of any entitlement to interest under section 563B of the Corporations Act) before the claims of Holders are paid; and

until the Senior Creditors have been paid in full, the Holders must not claim in the winding up of NAB in competition with the Senior Creditors so as to diminish any distribution, dividend or payment which, but for that claim, the Senior Creditors would have been entitled to receive,

so that the Holder receives, for each Note it holds, an amount equal to the amount it would have received if, in the winding up of NAB, it had held an issued and fully paid Preference Share.

Nothing in this clause 16.2:
1. creates a charge or security interest on or over any right of the Holder; or
2. requires the consent of any Senior Creditor to any amendment of these Terms made in accordance with clause 18.

16.3 Agreements of Holders as to subordination

Each Holder irrevocably agrees that:

clause 16.2 is a debt subordination for the purposes of section 563C of the Corporations Act;
it does not have, and waives to the maximum extent permitted by law, any entitlement to interest under section 563B of the Corporations Act to the extent that a holder of a Preference Share would not be entitled to such interest;
not to exercise any voting or other rights as a creditor in the winding up of NAB in any jurisdictions:
1. until after all Senior Creditors have been paid in full; or

1. otherwise in a manner inconsistent with the subordination contemplated by clause 16.2;
it must pay or deliver to the liquidator any amount or asset received on account of its claim in the winding up of NAB in respect of a Note in excess of its entitlement under clause 16.2; and
the debt subordination effected by clause 16.2 is not affected by any act or omission of NAB or a Senior Creditor which might otherwise affect it at law or in equity.

16.4 Further agreements

of Holders

Each Holder irrevocably acknowledges and agrees that:

a Holder has no right to apply for NAB to be wound up, or placed in administration, or to cause a receiver, or a receiver and manager, to be appointed in respect of NAB merely on the grounds that NAB does not or is or may become unable to pay a Distribution when scheduled in respect of Notes; and
these Terms contain no events of default. Accordingly (but without limitation) failure to pay in full, for any reason, a Distribution on a scheduled Distribution Payment Date will not constitute an event of default.

16.5 Unsecured

Notes are unsecured.

17 Meetings of Holders and voting rights

17.1 Meetings of Holders

Meetings of Holders may be held in accordance with the Meetings Provisions. A meeting may consider any matter affecting the interests of Holders, including any amendment to these Terms proposed by NAB in accordance with clause 18.

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17.2 Requirement for APRA approval

An amendment or addition to these Terms which may affect the eligibility of the Notes as Additional Tier 1 Capital cannot be approved by Holders without the prior written approval of APRA.

17.3 Voting rights

A Note does not entitle its Holder to attend or vote at a general meeting of NAB.

18 Amendment of these Terms

18.1 Amendments without consent

Subject to complying with all applicable laws, to clause 18.1(c) and to obtaining APRA's prior written approval where required in accordance with clause 18.4, NAB may without the authority, assent or approval of the Holders, amend these Terms and the NAB Capital Notes 4 Deed Poll if NAB is of the opinion that the amendment:
1. is of a formal, minor or technical nature;
2. is made to cure any ambiguity or correct any manifest error;
3. is necessary or expedient for the purpose of enabling the Notes to be listed or to remain listed on a stock exchange or lodged in a clearing system or to remain lodged in a clearing system or to be offered for sale or for subscription under the laws for the time being in force in any place;
4. is necessary or expedient for the purpose of complying with the provisions of any statute, the requirements of any statutory authority, ASX Listing Rules or the listing or quotation requirements of any securities exchange on which NAB may propose to seek a listing or quotation of the Notes;

is necessary and appropriate to effect the substitution under clause 19;
is made to amend any date or time period stated, required or permitted in connection with any Conversion, Redemption or Resale (including, without limitation, when the proceeds of Redemption are to be reinvested in a new security to be issued by NAB or a member of the Group);
is made to:
1. amend the terms of the Notes to align them with any Relevant Tier 1 Capital Instruments issued after the Issue Date; or
2. amend the definition of Relevant Tier 1 Capital Instruments on account of the issue after the Issue Date of capital instruments of any member of the Group; or
is not materially prejudicial to the interests of Holders as a whole.

For the purposes of determining whether the amendment is not materially prejudicial to the interests of Holders as a whole, the taxation and regulatory capital consequences to Holders (or any class of Holders) and other special consequences which are personal to a Holder (or any class of Holders) do not need to be taken into account.

Subject to complying with all applicable laws and clause 18.1(c) and with APRA's prior written approval where required in accordance with clause 18.4, NAB may without the authority, assent or approval of the Holders, amend these Terms if NAB is
of the reasonable opinion that the amendment is necessary and appropriate to effect the substitution of an Approved NOHC as issuer of the Ordinary Shares on Conversion in the manner

contemplated by these Terms including without limitation amendments and additions to effect a substitution in accordance with clause 19.

If NAB considers that the amendment will be materially prejudicial to the interests of Holders as a whole, the amendment may only be made if it has been approved by a Special Resolution of Holders. In considering the rights of Holders as a whole NAB need not take into account the taxation and regulatory capital consequences to Holders (or any class of Holders) or other special consequences which are personal to a Holder (or any class of Holders).

18.2 Amendment with consent

Without limiting clause 18.1, NAB may amend or add to these Terms or the NAB Capital Notes 4 Deed Poll if the amendment or addition has been approved by a Special Resolution of Holders. An amendment or addition to these Terms or the NAB Capital Notes 4 Deed Poll which may affect the eligibility of the Notes as Additional Tier 1 Capital cannot be approved by Holders under this clause 18 without the prior written approval of APRA.

18.3 Notification of amendment to APRA

NAB will promptly notify APRA of any amendments made in accordance with this clause 18.

18.4 Requirement for APRA approval

A requirement in this clause 18 for an amendment to be made with APRA's prior written approval applies only where the amendment may affect the eligibility of Notes as Additional Tier 1 Capital.

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18.5 Meaning of amend and amendment

In this clause 18, amendincludes modify, cancel, alter or add to and amendmenthas a corresponding meaning.

19 Substitution

19.1 Substitution of Approved NOHC as issuer of Ordinary Shares

Where:

NAB proposes to implement a NOHC Event involving an Approved NOHC; and
the Approved NOHC agrees for the benefit of Holders:
1. to deliver fully paid ordinary shares in its capital under all circumstances when NAB would otherwise have been required to deliver Ordinary Shares and upon the occurrence of an Acquisition Event with respect to the Approved NOHC, subject to the same terms and conditions as set out in these Terms (with all necessary modifications); and
2. to use all reasonable endeavours and furnish all such documents, information and undertakings as may be reasonably necessary in order to procure quotation of all ordinary shares in the capital of the Approved NOHC issued under these Terms (with all necessary modifications) on the securities exchange on which the other ordinary shares in the capital of the Approved NOHC are quoted at the time of a Conversion,

NAB may give a notice (an Approved NOHC Substitution Notice) to the Holders (which, if given, must be given as soon as practicable before the NOHC Event and in any event no later than 10 Business Days before the NOHC Event occurs) specifying the amendments

to these Terms which will be made

in accordance with clause 19.2 to effect the substitution of an Approved NOHC as the issuer of ordinary shares on Conversion (the Approved NOHC Substitution Terms). An Approved NOHC Substitution Notice, once given, is irrevocable. If NAB gives an Approved NOHC Substitution Notice to Holders in accordance with clause 19.4, the Approved NOHC Substitution Terms will have effect on and from the date specified in the Approved NOHC Substitution Notice. No proposal to implement a NOHC shall prevent, impede or delay a Conversion required on account of a Loss Absorption Event.

19.2 Amendment without consent for substitution of an Approved NOHC

Subject to complying with all applicable laws and with APRA's prior written approval, if the circumstances described in clauses 19.1(a) and 19.1(b) apply, without the authority, assent or approval of Holders, NAB may give an Approved NOHC Substitution Notice which:

amends the definition of "Conversion" such that, unless APRA otherwise agrees, on the date Notes are to be Converted:
1. each Note that is being Converted will be automatically transferred by each Holder free from Encumbrance to the Approved NOHC (or another member of the Group which is a holding company of NAB) (theTransferee) on the date the Conversion is to occur;
2. each Holder (or in the circumstances contemplated in clause 7.12, the Eligible Nominee) will be issued a number of ordinary shares in the capital of the Approved NOHC equal to the Conversion Number; and
3. as between NAB and the Transferee, each Note held by the Transferee as a result of the transfer will be automatically

Converted into Ordinary Shares, in a number such that the total number of Ordinary Shares held by the Transferee increases by the number which equals the number of ordinary shares in the capital of the Approved NOHC issued by the Approved NOHC to Holders on Conversion; and

makes such other amendments as in NAB's reasonable opinion are necessary and appropriate to effect the substitution of an Approved NOHC as the provider of the ordinary shares on Conversion in the manner contemplated by these Terms, including without limitation:
1. amendments and additions to the definition of "Group", "Acquisition Event", "Common Equity Trigger Event", "Non- Viability Trigger Event", "Loss Absorption Event", "Regulatory Event", "Tax Event" and "Mandatory Conversion";
2. where the terms upon which the Approved NOHC acquires NAB are such that the number of ordinary shares in the capital of the Approved NOHC on issue immediately after the substitution differs from the number of Ordinary Shares on issue immediately before the substitution (not involving any cash payment, or other distribution (or compensation) to or by the holders of any such shares), an adjustment to any relevant VWAP or Issue Date VWAP consistent with the principles of adjustment set out in clause 7;
3. amendments to the mechanics for adjusting the Conversion Number; and
4. any term defining the rights of Holders if the Conversion is not effected which is appropriate for the Notes to remain as Tier 1 Capital.

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19.3 Further substitutions

After a substitution under clause 19.1, the Approved NOHC may, without the consent of the Holders, effect a further substitution in accordance with clause 19.1 (with necessary changes).

20.2 No other rights

A Holder of the Notes has no right to participate in the issue of any other securities of NAB and has no claim on NAB other than as expressly set out in these Terms or on any other member of the Group.

21.5 Receipt - publication in newspaper

If published in a newspaper, communications are taken to be received on the first date that publication has been made in all the required newspapers.

19.4 Notice to Holders

NAB or the Approved NOHC must notify the Registrar, ASX and the Holders of the particulars of any substitution according to clause 19.1 or clause 19.3 in writing as soon as practicable after the substitution.

19.5 Acknowledgement of Holders

Each Holder irrevocably acknowledges and agrees that an Approved NOHC may in accordance with these Terms be substituted for NAB as issuer of the Ordinary Shares on Conversion and that if such a substitution is effected, the Holder is obliged to accept ordinary shares in that Approved NOHC on

a Conversion, and will not receive Ordinary Shares in NAB.

20 Further issues and no other rights

20.1 Further issues permitted

Each of the following is expressly permitted and authorised by these Terms:

the allotment or issue of notes, preference shares or other securities, or the conversion of existing securities into preference shares or other securities, ranking equally with, in priority to or junior to, or having different rights from, the Notes then on issue;
a redemption, conversion, buy- back or return or distribution of capital in respect of any share capital (except as provided by clause 2.8) or any other securities issued by NAB, whether ranking behind, equally with, or in priority to, the Notes; and
the incurring or guaranteeing by NAB of any indebtedness upon such terms as NAB thinks fit in its sole discretion.

21 Notices

21.1 Notices to Holders

All notices, certificates, consents, approvals, waivers and other communications in connection with a Note to the Holders must be in writing and may be:

so long as the Notes are quoted on ASX, given by publication of an announcement on ASX;
given by an advertisement published in the Australian Financial Review or The Australian, or any other newspaper nationally circulated within Australia; or
sent by prepaid post (airmail if appropriate) or left at the address of the relevant Holder (as shown in the Register at the close of business on the day which is 3 Business Days before the date of the relevant notice or communication).

21.2 Notices to NAB and the Registrar

All notices, and other communications to NAB and the Registrar must be in writing and may be sent by prepaid post or left at the address of the registered office of NAB or the Registrar or such other address as is notified to Holders from time to time.

21.3 When effective

Communications take effect from the time they are received or taken to be received (whichever happens first) unless a later time is specified in them.

21.4 Receipt - publication on ASX

If published by an announcement on ASX, communications are taken to be received when the announcement is made on ASX.

21.6 Receipt - postal

Unless a later time is specified in it, a notice, if sent by post, it is taken to be received on the sixth succeeding Business Day in the place of the addressee.

21.7 Non-receipt of notice

If there are two or more Holders, the non-receipt of any notice by, or the accidental omission to give any notice to, a Holder does not invalidate the giving of that notice.

22 Governing law and jurisdiction

22.1 Governing law

The Notes are governed by the laws in force in Victoria, Australia.

22.2 Jurisdiction

NAB submits to the non-exclusive jurisdiction of the courts of Victoria and courts of appeal from them. NAB waives any right it has to object to an action being brought in those courts including by claiming that the action has been brought in an inconvenient forum or that those courts do not have jurisdiction.

22.3 Serving documents

Without preventing any other method of service, any document in any action in connection with the Notes may be served on NAB by being delivered or left at NAB's address as set out below:

Attention: Company Secretary

Address: Level 1, 800 Bourke Street, Docklands, VIC 3008

or such other address as NAB notifies to ASX as its address (as the case may be) for notices or other communications in respect of the Notes from time to time.

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23 Power of attorney

Each Holder appoints each of NAB, its Authorised Officers and any External Administrator of NAB (each anAttorney) severally to be the attorney of the Holder with power in the name and on behalf of the Holder to sign all documents and transfers and do any other thing as may in the Attorney's opinion be necessary or desirable to be done in order for the Holder to observe or perform the Holder's obligations under these Terms including, but not limited to, effecting any transfers of Notes, making any entry in the Register or the register of any Ordinary Shares or exercising any voting power in relation to any consent or approval required for Conversion, Redemption or Resale.
The power of attorney given in this clause 23 is given for valuable consideration and to secure the performance by the Holder of the Holder's obligations under these Terms and is irrevocable.

24 Interpretation and definitions

24.1 Definitions

Acquisition Conversion Date has the meaning given in clause 5.2.

Acquisition Conversion Notice has the meaning given in clause 5.1.

Acquisition Event means any one of the following events:

a takeover bid is made to acquire all or some of the Ordinary Shares and such offer is, or becomes, unconditional, all regulatory approvals necessary for the acquisition to occur have been obtained and either:
1. the bidder has at any time during the offer period, a relevant interest in more than 50% of the Ordinary Shares on issue; or
2. the directors of NAB, acting as a board, issue a statement that at least a majority of its

directors who are eligible to do so have recommended acceptance of such offer (in the absence of a higher offer); or

a court orders the holding of meeting(s) to approve a scheme of arrangement under Part 5.1 of the Corporations Act, which scheme would result in a person having
a relevant interest in more than 50% of the Ordinary Shares that will be on issue after the scheme is implemented and:
1. all classes of members of NAB pass all resolutions required to approve the scheme by the majorities required under the Corporations Act to approve the scheme; and
2. all conditions to the implementation of the scheme, including any necessary regulatory approval (but not including approval of the scheme by the court) have been satisfied or waived

provided that none of the events described above will constitute an Acquisition Event if:

the event is a NOHC Event;
the ordinary shares of the NOHC are listed on an internationally recognised stock exchange; and
the NOHC makes the agreements for the benefit of Holders contemplated by clause 19.1(b).

Additional Tier 1 Capital means the Additional Tier 1 Capital of the NAB Level 1 Group or the NAB Level 2 Group as defined by APRA from time to time.

Adjustment Notice has the meaning given in clause 7.8.

amendfor the purposes of clause 18, has the meaning given in clause 18.5.

Approved NOHCmeans a NOHC of the Group arising from a NOHC Event in circumstances where the proviso to the definition of Acquisition Event will be satisfied.

Approved NOHC Substitution Notice

has the meaning given in clause 19.1.

Approved NOHC Substitution Terms

has the meaning given in clause 19.1.

APRAmeans the Australian Prudential Regulation Authority or any authority succeeding to its powers and responsibilities.

ASXmeans ASX Limited (ABN 98 008 624 691) or the securities market operated by it, as the context requires, or any successor.

ASX Listing Rules means the listing rules of ASX as amended, varied or waived (whether in respect of NAB or generally) from time to time.

ASX Operating Rules means the market operating rules of ASX as amended, varied or waived (whether in respect of NAB or generally) from time to time.

Attorneyhas the meaning given in clause 23(a).

Attributable Proceeds means, in respect of a Holder to whom clause

7.12 applies, an amount equal to the Net Proceeds per Ordinary Share multiplied by the number of Ordinary Shares issued and sold in accordance with clause 7.12 in respect of that Holder.

Australian Dollar means the lawful currency of the Commonwealth of Australia.

Authorised Officers means each director and secretary of NAB and any person delegated on the authority of the board of directors of NAB

to exercise the power of attorney conferred by clause 23.

Bank Bill Ratehas the meaning given in clause 2.4.

Banking Actmeans the Banking Act 1959 (Cth).

Bookbuildmeans the process conducted by NAB or its agents before the opening of the Offer whereby certain institutional investors and brokers lodge bids for Notes and,

on the basis of those bids, NAB determines the Margin and announces its determination on ASX before the opening of the Offer.

Business Daymeans a day which is both:

a day on which banks are open for general banking business

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in Melbourne and Sydney (not being a Saturday, Sunday or public holiday in that place); and

a day which is a business day for the purposes of the ASX Listing Rules.

Buy-Backmeans a transaction involving the acquisition by NAB of its Ordinary Shares pursuant to an offer made at NAB's discretion in accordance with the provisions of Part 2J of the Corporations Act.

Capital Reduction means a reduction in capital initiated by NAB in its discretion in respect of its Ordinary Shares in any way permitted by

the provisions of Part 2J of the Corporations Act.

CHESSmeans the Clearing House Electronic Subregister System operated by ASX or its affiliates or any system that replaces it relevant to the Notes (including in respect of the transfer or Conversion of the Notes).

Common Equity Tier 1 Capital means in respect of each of the NAB Level 1 Group and the NAB Level 2 Group has the meaning determined for that term (or its equivalent) by APRA from time to time.

Common Equity Tier 1 Ratio means:

in respect of the NAB Level 1 Group, the ratio of Common Equity Tier 1 Capital in respect of the NAB Level 1 Group to risk weighted assets of the NAB Level 1 Group; and
in respect of the NAB Level 2 Group, the ratio of Common Equity Tier 1 Capital in respect of the NAB Level 2 Group to risk weighted assets of the NAB Level 2 Group,

in each case as calculated by the methodology prescribed by APRA from time to time.

Common Equity Trigger Event has the meaning given in clause 4.2.

Constitutionmeans the constitution of NAB as amended from time to time.

Controlhas the meaning given in the Corporations Act.

Controlled Entitymeans, in respect of NAB (or any NOHC that is the holding

company of NAB), an entity that NAB (or such NOHC) Controls.

Conversionmeans, in relation to a Note, to convert that Note into a number of Ordinary Shares in accordance with clause 7, and Convert, Convertedand Convertinghave corresponding meanings.

Conversion Date means a Mandatory Conversion Date, a Loss Absorption Event Conversion Date, Acquisition Conversion Date or an Optional Conversion Date in respect of a Conversion.

Conversion Number has the meaning given in clause 7.1.

Corporations Act means the Corporations Act 2001 (Cth).

CS Facilitymeans ASX Settlement Pty Limited (ABN 49 008 504 532) or such other applicable clearing and settlement facility prescribed as a CS Facility under the Corporations Act from time to time.

CS Facility Operator means the operator of a CS Facility.

Cum Valuehas the meaning given in clause 7.2.

Defaulting Nominated Purchaser has the meaning given in clause 11.6.

Deferred Acquisition Conversion Notice has the meaning given in clause 5.4.

Deferred Conversion Date has the meaning given in clause 6.5.

Delisting Eventmeans, in respect of a date, that:

NAB has ceased to be listed or Ordinary Shares have ceased to be quoted on ASX on or before that date (and where the cessation occurred before that date, NAB or the Ordinary Shares continue not to be listed or quoted (as applicable) on that date);
trading of Ordinary Shares on ASX is suspended for a period of consecutive days which includes:
1. at least 5 consecutive Business Days prior to that date; and
2. that date; or

an Inability Event subsists preventing NAB from Converting Notes of Holders generally.

Directorsmean the directors of NAB acting as a board or an authorised committee of the board.

Distributionhas the meaning given in clause 2.1.

Distribution Payment Date has the meaning given in clause 2.2.

Distribution Period means in respect of:

the first Distribution Period, the period from (and including) the Issue Date until (but not including) the first Distribution Payment Date after the Issue Date; and
each subsequent Distribution Period, the period from (and including) the preceding Distribution Payment Date until (but not including) the next Distribution Payment Date.

Distribution Rate has the meaning given in clause 2.4.

Eligible Nominee has the meaning given in clause 7.12.

Encumbrancemeans any mortgage, pledge, charge, lien, assignment by way of security, hypothecation, security interest, title retention, preferential right or trust arrangement, any

other security agreement or security arrangement (including any security interest under the Personal Property Securities Act 2009 (Cth)) and any other arrangement of any kind having the same effect as any of the foregoing.

Equal Ranking Instruments means in respect of the payment of distributions or the payment in a winding up:

the NIS preference shares;
NAB CPS II;
NAB Capital Notes;
NAB Capital Notes 2;
NAB Capital Notes 3;
each other preference share that NAB has issued or may issue that has the same identifying number as the identifying number provided in the Constitution with respect to priority of payment of dividends or

132| NAB Capital Notes 4

payment in a winding up of NAB as any of the preference shares listed in (a) to (b) above; and

any securities or other instruments that rank in respect of distributions or in a winding up equally with those preference shares.

External Administrator means, in respect of a person:

a liquidator, a provisional liquidator, an administrator or a statutory manager of that person; or
a receiver, or a receiver and manager, in respect of all or substantially all of the assets and undertakings of that person,

or in either case any similar official.

Face Valuehas the meaning given in clause 1.2.

FATCAmeans sections 1471 through 1474 of the United States Internal Revenue Code of 1986, as amended ("the Code") (or any consolidation, amendment, re-enactment or replacement of those sections) and including any current or future regulations or official interpretations issued, agreements entered into pursuant to section 1471(b) of the Code or non-US laws enacted or regulations or practices adopted pursuant to

any intergovernmental agreement in connection with the implementation of those sections.

FATCA Withholding means any withholding or deduction imposed or required pursuant to FATCA.

First Mandatory Conversion Condition

has the meaning given in clause 3.3.

First Optional Conversion Restriction has the meaning given in clause 6.4.

First Test Date has the meaning given in clause 3.3(a).

Foreign Holder means a Holder whose address in the Register is a place outside Australia or who NAB otherwise believes may not be a resident of Australia.

Franking Rate(expressed as a decimal) means the franking percentage (within the meaning of Part 3-6 of the Tax

Act or any provisions that revise or replace that Part) applicable to the franking account of NAB at the relevant Distribution Payment Date.

Government Agency means any governmental,semi-governmental,administrative, fiscal, judicial or quasi- judicial body, department, commission, authority, tribunal, agency or entity.

Groupmeans NAB (or any NOHC that is the holding company of NAB) and the Controlled Entities of NAB (or of such NOHC).

Holdermeans a person for the time being Registered as the holder of a Note.

Inability Eventmeans NAB is prevented by applicable law or order of any court or action of any government authority (including regarding the insolvency, winding up or other external administration of NAB) or any other reason from Converting the Notes.

IRSmeans the United States Internal Revenue Service or any authority succeeding to its powers and responsibilities.

Issue Datemeans the date on which the Notes are issued.

Issue Date VWAP means the VWAP during the period of 20 Business Days on which trading in Ordinary Shares took place immediately preceding (but not including) the first date on which Notes were issued, as adjusted in accordance with clauses 7.4 to 7.7 (inclusive).

Issue Pricehas the meaning given in clause 1.2.

Level 1 and Level 2 mean those terms as defined by APRA from time to time.

Loss Absorption Event has the meaning given in clause 4.1.

Loss Absorption Event Conversion means the Conversion of Notes to Ordinary Shares on the Loss Absorption Event Conversion Date in accordance with clause 4.4.

Loss Absorption Event Conversion Date has the meaning given in clause 4.4.

Loss Absorption Event Notice has the

meaning given in clause 4.6.

Mandatory Conversion means the mandatory conversion of Notes to Ordinary Shares on the Mandatory Conversion Date in accordance with clause 3.

Mandatory Conversion Conditions has the meaning given in clause 3.3.

Mandatory Conversion Date has the meaning given in clause 3.2.

Marginhas the meaning given in clause 2.4.

Maximum Conversion Number has the meaning given in clause 7.1.

Meetings Provisions means the provisions for the convening of meetings and passing of resolutions by Holders set out in Schedule 2 of the NAB Capital Notes 4 Deed Poll.

NABmeans National Australia Bank Limited (ABN 12 004 044 937).

NAB Capital Notes means the mandatorily convertible subordinated perpetual debt securities in the form of unsecured notes issued by NAB on 23 March 2015.

NAB Capital Notes 2 means the mandatorily convertible subordinated perpetual debt securities in the form of unsecured notes issued by NAB on 7 July 2016.

NAB Capital Notes 3 means the mandatorily convertible subordinated perpetual debt securities in the form of unsecured notes issued by NAB on 20 March 2019.

NAB Capital Notes 4 has the meaning given in clause 1.1.

NAB Capital Notes 4 Deed Poll means the deed poll relating to the Notes made by NAB on or about 17 February 2020.

NAB CPS IImeans convertible preference shares, being fully paid preference shares issued by NAB on 17 December 2013.

NAB Level 1 Group means NAB and those of its controlled entities included by APRA from time to time in the calculation of NAB's capital ratios on a Level 1 basis.

NAB Level 2 Group means NAB and together with each other Related Entity

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included by APRA from time to time in the calculation of NAB's capital ratios on a Level 2 basis.

NAB New York Branch means NAB acting through its branch office in New York City.

Net Proceeds per Ordinary Share means, in respect of Ordinary Shares issued and sold in accordance with clause 7.12, an amount equal to the proceeds of sale of such Ordinary Shares actually received by the Eligible Nominee after deduction of any applicable brokerage, stamp duty and other taxes, charges and expenses (including the Eligible Nominee's reasonable out of pocket costs, expenses and charges properly incurred by it or on its behalf in connection with such sale from the sale price of the Ordinary Shares), divided by the number of such Ordinary Shares issued and sold.

Next Distribution Payment Date means the scheduled quarterly Distribution Payment Date immediately following the date on which the Optional Conversion Notice, Optional Redemption Notice or Optional Resale Notice (as applicable) was given by NAB provided that if such Distribution Payment Date is less than 20 Business Days following the date on which such notice was given then it shall be the immediately following Distribution Payment Date.

NISmeans the income securities issued by NAB in 1999 comprising fully paid notes issued by NAB through NAB New York Branch stapled to unpaid preference shares issued by NAB.

NIS preference shares means the preference shares issued by NAB in connection with the NIS which, if paid up in accordance with the terms of the NIS, will be outstanding in an aggregate liquidation amount of up to A$2.0 billion.

NOHCmeans a "non-operating holding company" within the meaning of the Banking Act.

NOHC Eventmeans an event which would otherwise be an Acquisition Event which is initiated by the

Directors, acting as a board, and the result of which is that the ultimate holding company of NAB would be a NOHC.

Nominated Purchaser means, subject to clause 11.3, one or more third parties selected by NAB in its absolute discretion, provided that such party cannot be NAB or any Related Entity of NAB.

Non-Conversion Notice has the meaning given in clause 3.4.

Non-Conversion Test Date has the meaning given in clause 6.4.

Non-Viability Trigger Event has the meaning given in clause 4.3.

Noteshas the meaning given in clause 1.1.

Offermeans the invitation made under the Prospectus issued by NAB for persons to subscribe for Notes.

Optional Conversion Date has the meaning given in clause 6.3.

Optional Conversion Notice has the meaning given in clause 6.1.

Optional Conversion Restrictions has the meaning given in clause 6.4.

Optional Redemption Notice has the meaning given in clause 8.1.

Optional Resale Notice has the meaning given in clause 10.1.

Ordinary Resolution means a resolution:

passed at a meeting of Holders by a simple majority of the votes validly cast by Holders in person or by proxy and entitled to vote on the resolution; or
made in writing by Holders representing more than 50% of the outstanding Notes,

in each case in accordance with the Meetings Provisions.

Ordinary Sharemeans a fully paid ordinary share in the capital of NAB.

Ordinary Share Dividend means any interim, final or special dividend payable in accordance with the Corporations Act and the Constitution in relation to Ordinary Shares.

Payment Condition means in respect of Distributions scheduled to be paid on a Distribution Payment Date:

the payment of Distributions will result in NAB or the Group not complying with APRA's then current Prudential Capital Requirements;
unless APRA otherwise approves in writing, making the Distribution payment would result in NAB or the Group exceeding any limit on distributions of earnings applicable under (and calculated in accordance with) APRA's then current capital conservation requirements as they are applied to NAB or the Group (as the case may be) at the time;
APRA otherwise objects to the payment of Distributions;
making the Distribution payment would result in NAB becoming, or being likely to become, insolvent for the purposes of the Corporations Act; or
NAB is not permitted to pay the Distribution under the Corporations Act.

Potential Acquisition Event means any one of the following events:

an event within paragraph (a) of the definition of Acquisition Event occurs (without the need that all regulatory approvals necessary for the acquisition to occur have been obtained); or
a court orders the holding of meetings to approve a scheme of arrangement under Part 5.1 of the Corporations Act and the scheme would result in a person having a relevant interest in more than 50% of the Ordinary Shares that will be on issue after the scheme is implemented,

in each case other than where such event is a NOHC Event.

Preference Share means a notional preference share in the capital of NAB conferring a claim in the winding up of NAB equal to the Face Value and ranking equally in respect of return of

134| NAB Capital Notes 4

capital in a winding up with each of the preference shares, securities or other instruments which is an Equal Ranking Instrument in respect of payment in a winding up.

Prospectusmeans the prospectus for the Offer including these Terms.

Prudential Capital Requirements means at any time the requirements of APRA with respect to the ratio of Common Equity Tier 1 Capital, Tier

1 Capital or Total Capital to total risk weighted assets as applicable to NAB or the Group at that time.

Publication Time has the meaning given in clause 2.4.

Rate Disruption Event has the meaning given in clause 2.4.

Record Datemeans, in the case of:

payments of a Distribution, the date which is 8 calendar days before the date of payment (or as otherwise prescribed by the ASX Listing Rules or if not prescribed by the ASX Listing Rules, a date determined by NAB and notified to ASX); and
payments of any other amount, a date determined by NAB and notified to ASX (or such other date as may be prescribed by ASX).

Redemptionmeans, in relation to a Note, redemption in accordance with clause 9.2 and Redeem, Redeemableand Redeemedhave corresponding meanings.

Redemption Date means the date on which Notes are to be redeemed or, if Notes are not redeemed on that day, the date on which the Notes are Redeemed.

Registermeans a register of Holders of Notes established and maintained by the Registrar. The term Register includes:

anysub-register maintained by, or on behalf of NAB under the Corporations Act, the ASX Listing Rules or the rules and regulations of CHESS; and
any branch register, provided that, in the event of any inconsistency, the principal register will prevail

over any sub-register or branch register.

Registeredmeans recorded in the Register.

Registrarmeans Computershare Investor Services Pty Limited (ABN 48 078 279 277) or any other person who from time to time maintains the Register on behalf of NAB.

Regulatory Change means any amendment to, clarification of or change (including any announcement of any change that will be introduced) in any law or regulation or any official administrative pronouncement or action or judicial decision interpreting or applying such laws or regulations or any direction, order, standard, requirement, guideline or statement of APRA (whether or not having the force of law) in each case which event is announced on or after the Issue Date and which NAB did not expect as at the Issue Date.

Regulatory Event means:

the receipt by the Directors of an opinion from a reputable legal counsel that, as a result of a Regulatory Change, more than de minimis additional requirements would be imposed on NAB in relation to or in connection with Notes (which were not expected by NAB at the Issue Date) which the Directors determine, in their absolute discretion, to be unacceptable; or
the determination by the Directors that, as a result of a Regulatory Change, NAB is not or will not be entitled to treat some or all Notes as Additional Tier 1 Capital except where the reason NAB is not or will not be entitled to treat some or all Notes as Additional Tier 1 Capital is because of a limit or other restriction on the recognition of Additional Tier 1 Capital which is in effect on the Issue Date or which on the Issue Date is expected by NAB may come into effect.

Related Entityhas the meaning given to it by APRA from time to time.

Relevant Distribution has the meaning

given in clause 2.8.

Relevant Distribution Payment Date has the meaning given in clause 2.8.

Relevant Fraction has the meaning given in clause 7.1.

Relevant Mandatory Conversion Date

has the meaning given in clause 3.2.

Relevant Tier 1 Capital Instruments means Tier 1 Capital instruments of NAB (on a Level 1 or Level 2 basis) (including the Notes) that, in accordance with their terms or by operation of law, are capable of being converted into Ordinary Shares or written off at the Loss Absorption Event Conversion Date.

Relevant Timemeans, in the case of:

payment of a Distribution, 7:00 pm (or such other time as may be prescribed by ASX or, if not prescribed by ASX, a time determined by NAB and notified to ASX); and
payments of the Face Value, a time determined by NAB and notified to ASX (or such other time as may be prescribed by ASX).

Reorganisationmeans, in relation to NAB, a division, consolidation or reclassification of NAB's share capital not involving any cash payment or other distribution (or compensation) to or by the holders of Ordinary Shares.

Replacement Rate has the meaning given in clause 2.4.

Resalemeans, in relation to a Note, the taking effect of the rights specified in clause 10 in relation to that Note, and Resoldand Resellhave corresponding meanings.

Resale Datehas the meaning given in clause 10.3.

Resale Pricemeans, for a Note, a cash amount equal to its Issue Price.

Scheduled Mandatory Conversion Date has the meaning given in clause 3.2.

Second Mandatory Conversion Condition has the meaning given in clause 3.3 (but in clauses 5.4 and 6.5, as adjusted in those clauses).

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Second Optional Conversion Restriction has the meaning given in clause 6.4.

Senior Creditorsmeans all present and future creditors of NAB, including depositors and holders of Tier 2 Capital Instruments, whose claims are:

entitled to be admitted in the winding up of NAB; and
not in respect of Equal Ranking Instruments.

Special Resolution means a resolution:

passed at a meeting of Holders by a majority of at least 75% of the votes validly cast by Holders in person or by proxy and entitled to vote on the resolution; or
made in writing by Holders representing at least 75% of the outstanding Notes,

in each case in accordance with the Meetings Provisions.

Subsequent Mandatory Conversion Date has the meaning given in clause 3.2.

Taxesmeans taxes, levies, imposts, deductions or charges and duties (including stamp and transaction duties) imposed by any authority together with any related interest, penalties and expenses in connection with them.

Tax Act means:

the Income Tax Assessment Act 1936 (Cth) or the Income Tax Assessment Act 1997 (Cth) as the case may be and a reference to any section of the Income Tax Assessment Act 1936 (Cth) includes a reference to that section as rewritten in the Income Tax Assessment Act 1997 (Cth);
any other law setting the rate of income tax payable; and
any regulation made under any of those laws.

Tax Eventmeans on or after the Issue Date, NAB receives an opinion from a reputable legal counsel or other tax adviser in Australia experienced in such matters that there is more than an

insubstantial risk that, as a result of a Tax Law Change:

NAB or another member of the Group would be exposed to more than a de minimis increase in its costs (including without limitation through the imposition of any amount of other Taxes, duties, assessments or other governmental charges) in connection with the Notes; or
NAB or the tax consolidated group of which it is a member would not be entitled to treat any Distribution as a frankable distribution within the meaning of Division 202 of the Tax Act (or may do so only subject to requirements which the Directors determine, in their absolute discretion, to be unacceptable).

Tax Law Change means:

an amendment to, change (including any announcement of any change that will be introduced) in any laws or regulations under those laws affecting taxation in Australia;
a judicial decision interpreting, applying or clarifying laws or regulations affecting taxation in Australia;
an administrative pronouncement, ruling, confirmation, advice or action (including a failure or refusal to provide a ruling) affecting taxation in Australia that represents an official position, including a clarification of an official position of the governmental authority
or regulatory body in Australia making the administrative pronouncement or taking any action; or
a challenge asserted or threatened in connection with the Notes
in writing from the Australian Taxation Office,

which amendment or change is announced or which action or clarification or challenge occurs on or after the Issue Date and which NAB did not expect as at the Issue Date.

Tax Ratehas the meaning given in clause 2.4.

Termsmeans these terms of issue of Notes.

Third Mandatory Conversion Condition has the meaning given in clause 3.3.

Tier 1 Capitalmeans Tier 1 Capital as defined by APRA from time to time.

Tier 2 Capitalmeans Tier 2 Capital as defined by APRA from time to time.

Tier 2 Capital Instruments means securities issued by NAB or a member of the NAB Level 2 Group which qualify as Tier 2 Capital.

Total Capitalmeans Total Capital as defined by APRA from time to time.

Transfereehas the meaning given in clause 19.2.

VWAPmeans, subject to any adjustments under clause 7, the average of the daily volume weighted average sale prices (such average being rounded to the nearest full cent) of Ordinary Shares sold on ASX during the relevant period or on the relevant days but does not include any "Crossing" transacted outside the "Open Session State" or any "Special Crossing" transacted at any time, each as defined in the ASX Operating Rules, or any overseas trades or trades pursuant to the exercise of options over Ordinary Shares.

VWAP Period means:

in the case of a Conversion resulting from a Potential Acquisition Event or an Acquisition Event, the lesser of:
1. 20 Business Days on which trading in Ordinary Shares takes place; and
2. the number of Business Days on which trading in Ordinary Shares takes place that the Ordinary Shares are quoted for trading on ASX after the occurrence of the Potential Acquisition Event or Acquisition Event (as the case may be);

136| NAB Capital Notes 4

in each case immediately preceding (but not including) the Business Day before the Optional Conversion Date or Acquisition Conversion Date in respect of that event (as the case may be);

in the case of a Conversion resulting from a Loss Absorption Event, the period of 5 Business Days on which trading in Ordinary Shares took place immediately preceding (but not including) the Loss Absorption Event Conversion Date;
in the case of any other Conversion, the period of 20 Business Days on which trading in Ordinary Shares took place immediately preceding (but not including) the date on which Conversion is to occur in accordance with these Terms; or
otherwise, the period for which VWAP is to be calculated in accordance with these Terms.

Written Offhas the meaning given in clause 4.5 and Write Offhas a corresponding meaning.

24.2 Interpretation

Unless the context otherwise requires, if there is any inconsistency between the provisions of these Terms and the Constitution then, to the maximum extent permitted by law, the provisions of these Terms will prevail.
Unless otherwise specified, a reference to a clause or paragraph is a reference to a clause or paragraph of these Terms.
Headings and boldings are for convenience only and do not affect the interpretation of these Terms.
The singular includes the plural and vice versa.
A reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments,re-enactments or replacements of any of them.
Other than in relation to a Loss Absorption Event and a conversion on a Loss Absorption Event

Conversion Date and other than as otherwise specified in these Terms, if an event under these Terms must occur on a stipulated day which

is not a Business Day, then the stipulated day will be taken to be the next Business Day.

A reference to dollars, AUD, A$, $ or cents is a reference to the lawful currency of Australia.
Calculations, elections and determinations made by or on behalf of NAB under these Terms are binding on Holders in the absence of manifest error.
Any provisions which refer to the requirements of APRA or any other prudential regulatory requirements will apply only if NAB is an entity, or the holding company of an entity, or is a direct or indirect subsidiary of an entity (including a NOHC), subject to regulation and supervision by APRA at the relevant time.
Any provisions which require APRA's consent or approval will apply only if APRA requires that such consent or approval be given at the relevant time.
Any provisions in these Terms requiring the prior approval of APRA for a particular course of action to be taken do not imply that APRA has given its consent or approval to the particular action as of the Issue Date. Where under these Terms, APRA approval is required, for any act to be done or not done, that term does not imply that APRA approval has been given as at the Issue Date.
The terms "holding company","wholly-owned subsidiary" and "subsidiary", when used in these Terms have the meaning given in the Corporations Act.
A reference to a party to an agreement or deed includes a reference to a replacement or substitute of the party according to that agreement or deed.
A reference to an agreement or deed includes a reference to that agreement or deed as amended,

added to or restated from time to time.

The words "includes" or "including", "for example" or "such as" do not exclude a reference to other items, whether of the same class or genus or not.
Words importing any gender include all other genders.
The terms takeover bid, relevant interest, scheme of arrangement, buy‑back, related body corporate and on-marketbuy-back when used in these Terms have the meaning given in the Corporations Act.
A reference to any term defined by APRA (including, without limitation, "Additional Tier 1 Capital", "Common Equity Tier 1 Capital", "Level 1", "Level 2", "Prudential Capital Requirements", "Tier 1 Capital" and "Total Capital") shall, if that term is replaced
or superseded in any of APRA's applicable prudential regulatory requirements or standards, be taken to be a reference to the replacement or equivalent term.
A reference to a term defined by the ASX Listing Rules or the ASX Operating Rules shall, if that term is replaced in those rules, be taken to be a reference to the replacement term.
If the principal securities exchange on which Ordinary Shares are listed becomes other than ASX, unless the context otherwise requires a reference to ASX shall be read as a reference to that principal securities exchange and a reference to the ASX Listing Rules, ASX Operating Rules or any term defined in any such rules, shall be read as a reference to the corresponding rules of that exchange or corresponding defined terms in such rules (as the case may be).
Where NAB is required to give or serve a notice by a certain date under these Terms, NAB is required to despatch the notice by that date (including at NAB's discretion, by

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TERMS OF NAB CAPITAL NOTES 4

posting or lodging notices with a mail house) and delivery or receipt (or deemed delivery) is permitted to occur after that date.

Where a Holder is required to give or deliver a notice to NAB by a certain date under these Terms, the notice must be received by NAB by that date.
A reference to time is to Melbourne time unless otherwise specified.

24.3 Inconsistency with ASX Listing Rules

So long as Notes are quoted on ASX, these Terms as they relate to those Notes are to be interpreted in a manner consistent with applicable ASX Listing Rules, except to the extent that an interpretation consistent with the ASX Listing Rules would affect the eligibility of Notes as Additional Tier 1 Capital.

138| NAB Capital Notes 4

APPENDIX B

GLOSSARY

NAB Capital Notes 4 | 139

APPENDIX B:

GLOSSARY

Where indicated, certain terms in this Glossary are defined by reference to the Terms provided in Appendix A.

Term	Meaning
Australian Accounting	Australian Accounting Standards and other authoritative pronouncements issued by the
Standards	Australian Accounting Standards Board
ABN	Australian Business Number
Acquisition Conversion	The date on which Conversion as a result of an Acquisition Event is to occur
Date	For the full definition - see clause 5.2 of the Terms

Acquisition Conversion	Has the meaning given to it in clause 5.1 of the Terms
Notice
Acquisition Event	Broadly, when certain takeover bids or schemes of arrangement occur in relation to NAB
	For the full definition - see clause 24.1 of the Terms
Additional Tier 1 Capital	The Additional Tier 1 Capital of the NAB Level 1 Group or the NAB Level 2 Group as defined
	by APRA from time to time
ADI	Authorised Deposit-taking Institution regulated by APRA
Allocation	The number of NAB Capital Notes 4 allocated under this Offer to a Syndicate Broker
Annual Financial Report	The financial report for NAB for the year ended 30 September 2019
2019
Applicant	A person who lodges an Application Form in accordance with this Prospectus
Application	A valid application for NAB Capital Notes 4 made through a completed Application Form in
	accordance with this Prospectus
Application Form	A paper or electronic form (as the context requires) attached to, or accompanying, this
	Prospectus upon which an Application for NAB Capital Notes 4 may be made
Application Monies	The amount payable on each Application, being the Face Value multiplied by the number of
	NAB Capital Notes 4 applied for
Approved NOHC	Has the meaning given to it in clause 24.1 of the Terms
APRA	Australian Prudential Regulation Authority
Arranger	National Australia Bank Limited
ASIC	Australian Securities and Investments Commission
ASX	ASX Limited (ABN 98 008 624 691) or the securities market operated by it (as the context
	requires)
ASX Listing Rules	The listing rules of ASX, with any modification or waivers which ASX may grant to NAB from
	time to time
Bank Bill Rate	Has the meaning given to it in clause 2.4 of the Terms
Banking Act	Banking Act 1959 (Cth)

140| NAB Capital Notes 4

Term	Meaning
Basel III Prudential	The APRA Prudential Standards and reporting standards which became effective on
Standards	1 January 2013 and which give effect to the capital reforms of the Basel Committee on
	Banking Supervision applicable to ADIs
BCBS	Basel Committee on Banking Supervision
BNZ orBank of New	Bank of New Zealand (New Zealand company number 428849)
Zealand
Bookbuild	The process through which certain investors bid for a firm Allocation of NAB Capital Notes 4
	to determine the Margin
Broker Firm Applicant	A retail client of a Syndicate Broker who applies for a broker firm allocation from a
	Syndicate Broker under the Broker Firm Offer
Broker Firm Offer	The offer to clients of Syndicate Brokers as described in Section 4 "Applying for NAB Capital
	Notes 4"
Business Day	Has the meaning given to it in clause 24.1 of the Terms
CHESS	Has the meaning given to it in clause 24.1 of the Terms
Closing Date	The closing date for the Offer which is expected to be 5.00 pm on 17 March 2020
Co-Managers	Bell Potter Securities Limited, Crestone Wealth Management Limited, JBWere Limited and
	Shaw and Partners Limited
Common Equity Tier 1	Common Equity Tier 1 Capital as defined by APRA from time to time
Capital
Common Equity Tier 1	The ratio of NAB's Common Equity Tier 1 Capital to RWA
Ratio
Common Equity Trigger	Has the meaning given to it in clause 4.2 of the Terms
Event
Constitution	The constitution of NAB, as amended from time to time
Controlled Entity	Has the meaning given to it in clause 24.1 of the Terms
Conversion	The conversion of NAB Capital Notes 4 into Ordinary Shares in accordance with clause 7 of
	the Terms
	Convert, Convertedand Convertinghave corresponding meanings
Conversion Date	A Mandatory Conversion Date, a Loss Absorption Event Conversion Date, Acquisition
	Conversion Date or an Optional Conversion Date in respect of a Conversion
Conversion Number	Has the meaning given to it in clause 7.1 of the Terms
Corporations Act	Corporations Act 2001 (Cth)
D-SIB	Domestic systemically important bank
DDOPIP Legislation	Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention
	Powers) Act 2019 (Cth)

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APPENDIX B:

GLOSSARY

Term	Meaning
Delisting Event	Broadly, when NAB is delisted, its Ordinary Shares have been suspended from trading for a
	certain period or NAB is prevented by applicable law or order of any court or action of any
	government authority or any other reason from Converting NAB Capital Notes 4 of Holders
	generally - see clause 24.1 of the Terms
Directors	The directors of NAB acting as a board or an authorised committee of the board or
	individually (as the context requires)
Distribution	Has the meaning given to it in clause 2.1 of the Terms
Distribution Payment	In respect of a NAB Capital Note 4, each 17 March, 17 June, 17 September and 17 December
Date	commencing on 17 June 2020 until the date that NAB Capital Note 4 is Converted or
	Redeemed
	For the full definition - see clause 2.2 of the Terms
Distribution Period	The period in respect of which a Distribution is scheduled. The first Distribution Period
	is from (and including) the Issue Date until (but not including) the first Distribution
	Payment Date. Each subsequent Distribution Period is from (and including) the preceding
	Distribution Payment Date until (but not including) the next Distribution Payment Date
	For the full definition - see clause 24.1 of the Terms
Distribution Rate	The distribution rate on NAB Capital Notes 4 calculated using the formula described in
	Section 2.1
	For the full definition - see clause 2.4 of the Terms
Eligible NCN Holder	A NCN holder who:
	• was registered as a holder of NCN at 7.00pm on 12 February 2020;
	• is shown on the NCN register as having an address in Australia;
	• is not an individual residing in a member state of the European Union; and
	• is not in the United States or acting as a nominee for, or for the account or benefit of,
	a U.S. Person or not otherwise prevented from receiving the Reinvestment Offer or
	NAB Capital Notes 4 under the laws of any jurisdiction
Eligible Nominee	Has the meaning given to it in clause 7.12 of the Terms
Eligible Securityholder	Holders of Ordinary Shares, National Income Securities, NAB Subordinated Notes 2, NAB
	Convertible Preference Shares II, NCN, NAB Capital Notes 2 or NAB Capital Notes 3 as at
	7.00pm on 12 February 2020 who are shown on the relevant register as having an address
	in Australia
Equal Ranking	Has the meaning given to it in clause 24.1 of the Terms
Instruments
Exposure Period	The seven day period commencing after the date the Original Prospectus was lodged
	with ASIC
Face Value	The face value for NAB Capital Notes 4 under this Prospectus, being $100 per
	NAB Capital Note 4
	For the full definition - see clause 1.2 of the Terms
FATCA	Sections 1471 through 1474 of the United States Internal Revenue Code of 1986, as
	amended (or any consolidation, amendment, re-enactment or replacement of those
	sections and including any current or future regulations or official interpretations issued,
	agreements entered into or non-US laws enacted with respect to those sections)

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Term	Meaning
FATCA Withholding	Any withholding or deduction imposed or required pursuant to FATCA
First Mandatory	Has the meaning given to it in clause 3.3 of the Terms
Conversion Condition
Foreign Holder	Has the meaning given to it in clause 24.1 of the Terms
Group	NAB (or any NOHC that is the holding company of NAB) and the Controlled Entities of NAB
	(or of such NOHC)
Group CEO	The Group Chief Executive Officer and Managing Director
GST	Goods and Services Tax
Holder	A registered holder of NAB Capital Notes 4
Holding Statement	A statement issued to Holders by the Registry which sets out the number of NAB Capital
	Notes 4 issued to that Holder
Inability Event	If NAB is prevented by applicable law or order of any court or action of any government
	authority (including regarding the insolvency, winding up or other external administration
	of NAB) or by any other reason from Converting NAB Capital Notes 4 which would
	otherwise be Converted on a Loss Absorption Event Conversion Date
	For the full definition - see clause 24.1 of the Terms
Institutional Investor	An investor invited to participate in the Institutional Offer
Institutional Offer	The invitation to Institutional Investors to apply for NAB Capital Notes 4 under this
	Prospectus
Issue Date	Expected to be 23 March 2020
Issue Date VWAP	Has the meaning given to it in clause 24.1 of the Terms
Joint Lead Managers or	National Australia Bank Limited, Morgan Stanley Australia Securities Limited,
JLMs	Morgans Financial Limited, Ord Minnett Limited, UBS AG, Australia Branch and
	Westpac Institutional Bank
Loss Absorption Event	Has the meaning given to it in clause 4.1 of the Terms
Loss Absorption Event	Has the meaning given to it in clause 4.4 of the Terms
Conversion Date
Mandatory Conversion	The mandatory conversion of NAB Capital Notes 4 to Ordinary Shares on the Mandatory
	Conversion Date in accordance with the Terms
Mandatory Conversion	Has the meaning given to it in clause 3.3 of the Terms
Conditions
Mandatory Conversion	Has the meaning given to it in clause 3.2 of the Terms
Date

NAB Capital Notes 4 | 143

APPENDIX B:

GLOSSARY

Term	Meaning
Margin	2.95% per annum, as determined under the Bookbuild
Maximum Conversion	Has the meaning given to it in clause 7.1 of the Terms
Number
MLC	MLC Limited (ABN 90 000 000 402)
MLCN	MLC Nominees Limited
MLC Wealth Divestment	The divestment of the Group's advice, platform & superannuation and asset management
	businesses
NAB	National Australia Bank Limited (ABN 12 004 044 937)
NCN	Capital notes, being fully paid mandatorily convertible subordinated perpetual notes issued
	by NAB on 23 March 2015
NAB Capital Notes 2	Capital notes, being fully paid mandatorily convertible subordinated perpetual notes issued
	by NAB on 7 July 2016
NAB Capital Notes 3	Capital notes, being fully paid mandatorily convertible subordinated perpetual notes issued
	by NAB on 20 March 2019
NAB Capital Notes 4	Capital notes, being fully paid mandatorily convertible subordinated perpetual notes which
	are to be issued by NAB under this Prospectus
NAB Capital Notes 4	The deed poll relating to NAB Capital Notes 4 made by NAB on or about 17 February 2020
Deed Poll
NAB Convertible	Convertible preference shares, being fully paid preference shares issued by NAB on
Preference Shares II	17 December 2013
NAB Level 1 Group	Has the meaning given to it in clause 24.1 of the Terms
NAB Level 2 Group	Has the meaning given to it in clause 24.1 of the Terms
NAB Subordinated	The fully paid subordinated unsecured notes issued by NAB on 20 March 2017
Notes 2
National Income	The securities issued under a prospectus dated 10 May 1999
Securities
NCN Nominated	UBS AG, Australia Branch (or permitted successor)
Purchaser
NCN Reinvestment	An Eligible NCN Holder who applies directly to NAB under the Reinvestment Offer
Applicant
NCN Resale	The purchase of NCN by the NCN Nominated Purchaser on 23 March 2020 pursuant to the
	resale notice issued by NAB in accordance with the NCN Terms on 17 February 2020
NCN Resale Proceeds	$100 per NCN acquired by the NCN Nominated Purchaser pursuant to the NCN Resale
NCN Terms	The terms of NCN as set out in Appendix A of the Prospectus for NCN dated
	25 February 2015 (which replaced the Prospectus dated 17 February 2015)
Nippon Life	Nippon Life Insurance Company
NOHC	A "non-operating holding company" within the meaning of the Banking Act
NOHC Event	Has the meaning given to it in clause 24.1 of the Terms

144| NAB Capital Notes 4

Term	Meaning
Non-Conversion Test	Has the meaning given to it in clause 6.4 of the Terms
Date
Non-Viability Trigger	Has the meaning given to it in clause 4.3 of the Terms
Event
NULIS	NULIS Nominees (Australia) Limited (ABN 80 008 515 633)
Offer	The offer made under this Prospectus by NAB of NAB Capital Notes 4 to raise $1,950 million,
	with the ability to raise more or less. The offer comprises the Broker Firm Offer,
	Securityholder Offer, the Institutional Offer and the Reinvestment Offer
Offer Management	The offer management agreement entered into between NAB, the Arranger, and the Joint
Agreement	Lead Managers as summarised in Section 9.5
Offer Period	The period from the Opening Date to the Closing Date
Opening Date	The opening date of the Offer, which was 25 February 2020
Optional Conversion	Has the meaning given to it in clause 6.3 of the Terms
Date
Optional Conversion	Has the meaning given to it in clause 6.4 of the Terms
Restriction
Ordinary Resolution	A resolution passed at a meeting of Holders by a simple majority of the votes validly cast by
	Holders in person or by proxy and entitled to vote on the resolution, or made in writing by
	Holders representing more than 50% of the outstanding NAB Capital Notes 4
	For the full definitions and provisions relating to written resolutions - see the Meetings
	Provisions set out in the NAB Capital Notes 4 Deed Poll
Ordinary Share	A fully paid ordinary share in the capital of NAB
Original Prospectus	The Prospectus dated 17 February 2020 and lodged with ASIC on that date, which this
	Prospectus replaces
Payment Condition	Has the meaning given to it in clause 24.1 of the Terms
Potential Acquisition	Has the meaning given to it in clause 24.1 of the Terms
Event
Prospectus	This Prospectus which was lodged with ASIC on 25 February 2020
Protected Account	Broadly subject to certain conditions, an account or a specified financial product:
	• where NAB is required to pay the account-holder, on demand or at an agreed time, the
	net credit balance of the account; or
	• otherwise prescribed by regulation
	The Australian Treasurer has published a declaration of products prescribed as protected
	accounts for the purposes of the Banking Act and the declaration has now largely been
	restated in regulations
Prudential Capital	Has the meaning given to it in clause 24.1 of the Terms
Requirements
Prudential Standards	A prudential standard issued by APRA under its powers in the Banking Act

NAB Capital Notes 4 | 145

APPENDIX B:

GLOSSARY

Term	Meaning
Record Date	Has the meaning given to that term in clause 24.1 of the Terms
Redemption	In relation to a NAB Capital Note 4, a redemption in accordance with clause 9.2 of the Terms
	Redeemand Redeemedhave corresponding meanings
Registrar orRegistry	Computershare Investor Services Pty Limited (ABN 48 078 279 277) or any other registry
	that NAB appoints
Regulatory Change	Has the meaning given to it in clause 24.1 of the Terms
Regulatory Event	Has the meaning given to it in clause 24.1 of the Terms
Reinvestment Offer	The invitation to Eligible NCN Holders under this Prospectus to reinvest the NCN Resale
	Proceeds relating to all or some of their NCN into NAB Capital Notes 4
Reinvestment Offer	The reinvestment form available to Eligible NCN Holders online at nab.com.au/ncn4offer
Application Form	or accompanying this Prospectus sent to Eligible NCN Holders at their request on which
	they can reinvest all or some of their NCN Resale Proceeds in NAB Capital Notes 4 as
	described in Section 4
Related Entity	Has the meaning given to it in clause 24.1 of the Terms
Relevant Fraction	Has the meaning given to it in clause 7.1 of the Terms
Relevant Tier 1 Capital	Has the meaning given to it in clause 24.1 of the Terms
Instruments
Relevant Tier 2 Capital	Tier 2 Capital Instruments that, in accordance with their terms or by operation of law, are
Instruments	capable of being Converted into Ordinary Shares or written off
Resale	Has the meaning given to it in clause 24.1 of the Terms
	Resoldand Resellhave corresponding meanings
Resale Price	Has the meaning given to it in clause 24.1 of the Terms
Royal Commission	The Royal Commission into Misconduct in the Banking, Superannuation and Financial
	Services Industry
RWA	Risk-weighted assets
Second Mandatory	Has the meaning given to it in clause 3.3 of the Terms
Conversion Condition
Securityholder	An Applicant who applies under the Securityholder Offer
Applicant
Securityholder Offer	The offer as described in Section 4 "Applying for NAB Capital Notes 4"
Senior Creditors	All present and future creditors of NAB, including depositors and holders of Tier 2 Capital
	Instruments whose claims are entitled to be admitted in the winding up of NAB and whose
	claims are not in respect of Equal Ranking Instruments
Shareholder	A holder of Ordinary Shares from time to time
Special Resolution	A resolution passed at a meeting of Holders by a majority of at least 75% of the votes
	validly cast by Holders in person or by proxy and entitled to vote on the resolution, or made
	in writing by Holders representing at least 75% of the outstanding NAB Capital Notes 4
	For the full definitions and provisions relating to written resolutions - see the Meetings
	Provisions set out in the NAB Capital Notes 4 Deed Poll

146| NAB Capital Notes 4

Term	Meaning
Syndicate Broker	Any of the Joint Lead Managers (or their affiliated retail brokers), Co-Managers and any
	other participating broker in the Offer
Tax Event	Has the meaning given to it in clause 24.1 of the Terms
Tax Rate	Has the meaning given to it in clause 2.4 of the Terms
Terms	The terms of NAB Capital Notes 4 as set out in Appendix A
TFN	Tax File Number
Third Mandatory	Has the meaning given to it in clause 3.3 of the Terms
Conversion Condition
Tier 1 Capital	Tier 1 Capital as defined by APRA from time to time
Tier 2 Capital	Tier 2 Capital as defined by APRA from time to time
Tier 2 Capital	Securities issued by NAB or a member of the Group which qualify as Tier 2 Capital
Instruments
Total Capital	Has the meaning given by APRA from time to time (or as the context otherwise requires)
U.S. Person	Has the meaning given to it in Regulation S under the U.S. Securities Act
U.S. Securities Act	United States Securities Act of 1933, as amended
VWAP	Has the meaning given to it in clause 24.1 of the Terms
Written Off	Has the meaning given to it in clause 4.5 of the Terms
	Write Offhas a corresponding meaning

NAB Capital Notes 4 | 147

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148| NAB Capital Notes 4

National Australia Bank Limited ABN 12 004 044 937

BROKER FIRM OFFER APPLICATION FORM

Closing Date 5.00pm (Melbourne time) Tuesday, 17 March 2020*

This Application Form relates to the Broker Firm Offer by NAB of NAB Capital Notes 4 under the prospectus dated 25 February 2020

(Prospectus). This Application Form should be read in conjunction with the Prospectus. This Application Form must not be distributed unless attached to, or accompanied by the Prospectus. Capitalised words and certain terms used in this Application Form have the meanings given to them in the Prospectus. This Application Form is important. If you have any questions in relation to the Offer or how to deal with this Application Form, you should contact your Syndicate Broker or seek advice from your financial adviser or other professional adviser.

Apply online under the Securityholder Offer

If you are an Eligible Securityholder, you may also apply under the Securityholder Offer by completing an online Application Form via nab.com.au/ncn4offeror by contacting the NAB Information Line on 1300 367 647(within Australia) or +61 3 9415 4299(outside Australia), Monday to Friday from 8.00am to 7.30pm (Melbourne time) to request a paper copy of the Securityholder Offer Application Form.

CAUTION: NAB Capital Notes 4 are complex and may not be suitable for all investors. They are not guaranteed or secured, are not Protected Accounts and are not deposit liabilities for the purposes of the Banking Act. The overall complexity of NAB Capital Notes 4 may make them difficult to understand and the risks associated with them could result in the loss of all or some of your investment and any associated income. If you do not fully understand how NAB Capital Notes 4 work or the risks associated with them, you should obtain professional advice from your stockbroker, solicitor, accountant or other independent and qualified professional adviser about the Offer.

Acknowledgements
By submitting this Application Form and applying to participate in the Offer,
I/we represent and warrant that I/we have read and understood the Prospectus
and this Application Form in full including acknowledgements overleaf.	Broker Firm Offer Allocation Number

STEP 1	Apply for NAB Capital Notes 4	NAB

			,						,					0	X	A$100.00	= A$				,						,	0		0		0	.	0		0
Number of NAB Capital Notes 4 applied for			Price per NAB Capital Note 4	Full application payment of

The Application must be for a minimum of 50 NAB Capital Notes 4 (A$5,000) and thereafter in multiples of 10 NAB Capital Notes 4 (A$1,000).

STEP 2

Provide your details in the correct form of the registrable titles. Refer overleaf.

Individual / Joint Applicants

Title or Company Name Given Name(s)

Surname

Joint Applicant 2 or Account Designation

Joint Applicant 3 or Account Designation

Postal Address

Unit

Street Number

Street Name or PO Box

Street Name or PO Box (continued)

City/Suburb/Town

State

Postcode

Contact Details

(

)

Contact Name

Telephone Number (Business Hours)

STEP 3

CHESS Holdings Only - supply your Holder Identification Number

STEP 4

Make your paymentPlease refer to instructions on page 65 or provided to you by your Syndicate Broker or contact them

immediately if you are unsure how to fill out this section.

Drawer

Cheque Number

BSB Number

Account Number

Amount of Cheque

* This date is indicative only. NAB reserves the right to change it without prior notice. You are encouraged to lodge your Application as soon as possible.

Acknowledgements

By submitting this Application Form and applying to participate in the Offer, I/we:

Prospectus

represent and warrant that I/we have read and understood the Prospectus and this Application Form in full
declare that this Application Form has been completed and lodged according to the Prospectus, and subject to the declarations, statements and acknowledgements on this Application Form
acknowledge that the information contained in the Prospectus (or any supplement or replacement) and this Application Form is not investment advice or a recommendation that NAB Capital Notes 4 are suitable for me/us, given my/our investment objectives, financial situation or particular needs

Risks

acknowledge that NAB Capital Notes 4 are not Protected Accounts or deposit liabilities for the purposes of the Banking Act or any other accounts, are not guaranteed or insured by any government or other person, give Holders no claim on NAB (or any other member of the Group) except as provided in the Terms and that the investment performance of NAB Capital Notes 4 is not guaranteed
by NAB

Terms and NAB's Constitution

provide authorisation to be registered as the holder of NAB Capital Notes 4 issued to me/us and to be bound by NAB's Constitution, the Prospectus, the Terms, and the NAB Capital Notes 4 Deed Poll
agree to become a member of NAB and be bound by NAB's Constitution upon Conversion in accordance with the Terms

Eligibility and selling restrictions

declare that each Applicant named on this Application Form (if a natural person) is at least 18 years old
declare that each Applicant named on this Application Form is an Australian resident
declare that each Applicant named on this Application Form is not an individual residing in a member state of the European Union
declare that each Applicant named on this Application Form is not in the United States or other place outside Australia or a U.S. Person, nor acting for the account or benefit of any U.S. Person
represent and warrant that I/we have not distributed the Prospectus or any other materials concerning the Offer in the United States or to any U.S. Person
declare that I/we understand that the NAB Capital Notes 4 have not been and will not be registered under the U.S. Securities Act and may not be offered or sold, directly or indirectly, in the United States or to, or for the account or benefit of, any U.S. Person unless an exemption from such registration applies
represent and warrant that the laws of any other place, including the restrictions set out on page 3 of the Prospectus, do not prohibit me/us from being given the Prospectus or any supplementary or replacement Prospectus or making an Application on this Application Form or being issued with NAB Capital Notes 4

Application Form

represent and warrant that all details and statements on this Application Form are complete and accurate
apply for the number of NAB Capital Notes 4 set out on or determined in accordance with this Application Form and agree to be allocated that number of NAB Capital Notes 4 or a lesser number or no NAB Capital Notes 4
at all
authorise NAB and the Joint Lead Managers to do anything on my/our behalf necessary for NAB Capital Notes 4 to be allocated to me/us, including to act on instructions received by the Registry using the contact details provided overleaf
acknowledge that my/our Application to acquire NAB Capital Notes 4 is irrevocable and may not be varied or withdrawn except as allowed by law
acknowledge that my/our Application may be rejected without giving
any reason, including where this Application Form is not properly completed or where a cheque submitted with this Application Form is dishonoured or for the wrong amount
acknowledge that if I/we are not issued any NAB Capital Notes 4 or issued fewer NAB Capital Notes 4 than the number that I/we applied and paid for as a result of the scale back, all or some of my/our Application Monies (as applicable) will be refunded to me/us (without interest) as soon as practicable after the Issue Date

Correct forms of registrable titles

Applications must be made in the name(s) of natural persons, companies or other legal entities in accordance with the Corporations Act. At least one full given name and surname is required for each natural person. The name of the beneficial owner or any other registrable name may be included by way of an account designation or completed as described in the correct forms of registrable title(s) below.

Type of Investor	Correct form of registration	Incorrect form of registration

Individual
- Use given name(s) in full, not initials	Mr John Alfred Smith	J.A Smith

Joint
- Use given name(s) in full, not initials	Mr John Alfred Smith & Mrs Janet Marie Smith	John Alfred & Janet Marie Smith

Company
- Use company title, not abbreviations	ABC Pty Ltd	ABC P/L; ABC Co

Trusts
- Use trustee(s) personal name(s)
- Do not use the name of the trust	Ms Penny Smith	Penny Smith Family Trust

Deceased Estates
- Use executor(s) personal name(s)
- Do not use the name of the deceased	Mr Michael Smith	Estate of Late John Smith

Minor(a person under the age of 18)
- Use the name of a responsible adult with an appropriate designation	Mr John Alfred Smith	Peter Smith

Partnerships
- Use partners personal name(s)	Mr John Smith & Mr Michael Smith
- Do not use the name of the partnership		John Smith & Son

Clubs/Unincorporated Bodies/Business Names
- Use office bearer(s) personal name(s)	Mrs Janet Smith
- Do not use the name of the club etc		ABC Tennis Association

Superannuation Funds
- Use the name of trustee of the fund	John Smith Pty Ltd	John Smith Pty Ltd
- Do not use the name of the fund		Superannuation Fund

How to apply

Type of Offer	Who is eligible to	When to apply	How to apply
	participate?

Broker Firm	The Broker Firm Offer	Applications will	If you are applying under the Broker Firm Offer
Offer	is available to clients	only be accepted	(including to reinvest your NCN Resale Proceeds),
	of a Syndicate Broker,	during the Offer	you should contact the Syndicate Broker who has
	including Eligible	Period, which	offered you an allocation in the Broker Firm Offer
	Securityholders and	opened on	for information about how and when to lodge
	Eligible NCN Holders,	25 February 2020.	your Application and accompanying cheque(s)
	who are Australian	Applications will not	and/or money order(s) (if required).
	resident retail	be accepted after
	investors.	the Closing Date,	Generally, your Application will be lodged with the
		which is expected	Syndicate Broker.
		to be 5.00pm on
		17 March 2020.

Step 1: Apply for NAB Capital Notes 4

Insert the numberof NAB Capital Notes 4 you wish to apply for as per the instructions in Step 1 and then fill out the A$ amountto be paid, i.e. the number of NAB Capital Notes 4 you are applying for multiplied by the A$100 issue price. Applications must be for a minimum of 50 NAB Capital Notes 4 (A$5,000) and thereafter in multiples of 10 NAB Capital Notes 4 (A$1,000).

Step 2: Provide your Details

Individual/Joint Applications:Fill in your full name or the name of a company. Up to 3 joint applicants can register. Refer to the Correct Forms of Registrable Titles table on the previous page as applications using the wrong form may be rejected.

Postal Address:This will be used for all postal correspondence.

Contact Details:Please enter a telephone number including area code and contact name.

Step 3: CHESS Holdings Only

If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold NAB Capital Notes 4 issued to you under this Application on the CHESS Subregister, enter your CHESS Holder Identification Number (HIN). Otherwise leave Step 3 blank and on issue you will be sponsored by NAB and allocated a Securityholder Reference Number (SRN).

Note:If the name and address details you give on this form do not match the details held at CHESS, your Application will be deemed to have been submitted without the CHESS HIN and any NAB Capital Notes 4 issued will be held on the NAB issuer sponsored subregister.

Step 4: Make your Payment

Complete your cheque or money order as per the instructions provided to you by your Syndicate Broker.

Step 5: Submit your application

Broker Firm Offer Applicants MUSTcontact their Syndicate Broker for instructions on how and when to submit this Application Form and the Application Monies. If you have been offered an allocation by a Syndicate Broker, you must return this form directly to that broker in accordance with their instructions. Your Broker Firm Offer Application must be received by your Syndicate Brokerin time for them to arrange settlement on your behalf by 10.00am (Melbourne time) on 20 March 2020.

Important: Contact your Syndicate Broker for instructions on how and when to submit !this Application Form and Application Monies.

For details including the basis on which your personal information is collected, the primary purposes for which your collected information will be used, the parties to which your personal information may be disclosed, the manner in which you can gain access to your personal information and how the Registry handles privacy complaints, please see Computershare Investor Services Pty Limited's Privacy Policy at computershare.com/au/privacyor contact the Registry's Privacy Officer at privacy@computershare.com.au

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152| NAB Capital Notes 4

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NAB Capital Notes 4 | 153

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154| NAB Capital Notes 4

CORPORATE DIRECTORY

Issuer	Australian Legal Adviser
National Australia Bank Limited	King & Wood Mallesons
Level 1, 800 Bourke Street	Level 50, 600 Bourke Street
Docklands VIC 3008	Melbourne VIC 3000

Arranger & Joint Lead Manager	Australian Tax Adviser
National Australia Bank Limited	Greenwoods & Herbert Smith Freehills Pty Limited
Level 25, 255 George Street	ANZ Tower
Sydney NSW 2000	161 Castlereagh Street
Joint Lead Managers	Sydney NSW 2000

Morgan Stanley Australia Securities Limited	Auditor
Level 39, Chifley Tower	Ernst & Young
2 Chifley Square	8 Exhibition Street
Sydney NSW 2000	Melbourne VIC 3000
Morgans Financial Limited	Registry
Level 29, Riverside Centre	Computershare Investor Services Pty Limited
123 Eagle St	Yarra Falls
Brisbane QLD 4000	452 Johnston Street
Ord Minnett Limited	Abbotsford VIC 3067

Level 8, NAB House	How to contact us
255 George Street
Call us on the NAB Information Line
Sydney NSW 2000
UBS AG, Australia Branch	1300 367 647(within Australia) or
+61 3 9415 4299(outside Australia)
Level 16, Chifley Tower	(Monday to Friday - 8.00am to 7.30pm)
2 Chifley Square	Find us on the web at
Sydney NSW 2000
Westpac Institutional Bank, a division of Westpac Banking	nab.com.au/shareholder

Corporation
Level 2, Westpac Place, 275 Kent Street
Sydney NSW 2000
Co-Managers
Bell Potter Securities Limited
Aurora Place
Level 38, 88 Phillip St
Sydney NSW 2000
Crestone Wealth Management Limited
Level 32, Chifley Tower
2 Chifley Square
Sydney NSW 2000
JBWere Limited
Level 16, 101 Collins Street
Melbourne VIC 3000
Shaw and Partners Limited
Level 7, Chifley Tower
2 Chifley Square
Sydney NSW 2000

NAB Capital Notes 4 | 155

A153983-0220

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NAB - National Australia Bank Ltd. published this content on 25 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 February 2020 08:53:07 UTC

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