National Australia Bank : 2021 AGM - Chair and CEO Address and Proxy Summary

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395 Bourke Street

Melbourne VIC 3000

AUSTRALIA

www.nab.com.au

Friday, 17 December 2021

ASX ANNOUNCEMENT

2021 Annual General Meeting (AGM) - Chair and CEO Address and Proxy Summary

National Australia Bank Limited (NAB) attaches the following documents to be presented at the

2021 AGM being held today at 9:30am online via the Lumi platform:

• Chair's address.
• CEO's address.
• Slides showing direct and proxy votes received on each resolution in advance of the AGM. The results of the AGM will be communicated to the ASX shortly after the conclusion of the AGM.

Authorised by:

Louise Thomson

Group Company Secretary

For further information:

Media

Mark Alexander	Jessica Forrest
M: [phone]	M: [phone]

Investor Relations

Sally Mihell	Natalie Coombe
M: [phone]
Mob: [phone]

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

2021 ANNUAL GENERAL MEETING - CHAIR'S ADDRESS Mr Philip Chronican, Chair

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Good morning, ladies and gentlemen, and welcome to this meeting.

It is just after 9.30am, this is a properly constituted meeting and a quorum is present.

I therefore declare the Annual General Meeting of National Australia Bank open and welcome shareholders, proxyholders and guests.

I am joining you today from Melbourne and I, too, acknowledge the traditional owners and custodians of the land on which we are hosting today's meeting, the Wurundjeri and Bunurong people of the Kulin nation. I pay my respects to their elders past, present and emerging.

This morning's meeting is an important opportunity to reflect on our performance for shareholders and to discuss the future of our business.

A little over two years ago, the Board took accountability for ensuring the necessary changes were made at NAB; and that our customers, our people and our shareholders would see the benefits.

That work continues. However, I am pleased to say we are now well progressed. We are finishing 2021 a better bank.

In a year characterised by continued challenges requiring resilience and the ability to adapt, NAB has demonstrated a strong focus on customers and on colleagues. We have also shown the ability to grow safely.

Our Chief Executive Officer, Ross McEwan, together with his Executive Leadership Team, has created stability and clarity of strategy, with greater discipline and stronger execution. There is clear evidence of this plan in our business results and we are well placed to deliver improved performance over the long term.

In a little over two years, NAB has grown from the fourth to second largest Australian bank, by market capitalisation. We have increased the dividend over last year's reduced levels.

We know that these are the core performance outcomes that you want to see as owners of the bank.

The successful exit of MLC Wealth earlier this year was a major milestone in the simplification of NAB. It has enabled more focus and investment to be directed back into our core banking business.

NAB's acquisition of the neobank, 86 400, and the proposed acquisition of Citigroup's Australian consumer business, will enable the bank to quickly build scale in our digital and consumer bank offerings.

Meaningful and sustainable change has been made to the way the bank operates. This is as a result of reforms put in place in response to NAB's own self-assessment into governance, accountability and culture in 2018, and following the Financial Services Royal Commission.

Implementation of the applicable and actionable recommendations from the Commission is on track.

Actions to address the root causes identified in our self-assessment are largely complete. We are now engaged with APRA on the assessment of their impact.

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Several regulatory matters have been concluded. The Introducer Payments Program, Plan Service Fees, Consumer Credit Insurance Products and Fee Disclosure Statements matters are closed and customer remediation is complete. In total, we have returned $1.3 billion to customers since June 2018 and are on track to have the bulk of remaining legacy issues behind us by the end of 2022.

We have made it a priority to deliver higher standards of governance and accountability and we have driven a reorientation of the bank around customers and colleagues.

Products and services have been reviewed to improve customer outcomes. In the 2021 financial year, NAB's Strategic Net Promoter Score increased four points to -7. This is equal first amongst our peers and marks a 10-point increase from -17 in 2019.

Investments in NAB colleagues are showing up in employee survey results. NAB achieved staff engagement levels amongst the top quartile of global employers during the financial year 2021.

We're changing the way we pay colleagues, to ensure remuneration supports our desired culture. 12,000 bankers are moving to 100 per cent fixed pay, to ensure that people are rewarded for serving customers well - not for selling. Senior leaders will still have some pay at risk, reflecting their levels of accountability when things go right and wrong.

While we are finding and resolving issues faster, some work remains.

We are acutely aware of the important role the bank plays in monitoring and reporting suspicious, and potentially criminal, activity.

In June, AUSTRAC commenced an enforcement investigation of NAB. At that time, AUSTRAC commented it was not considering civil penalty proceedings. We have not been notified of any change to this position. However, we note the investigation is ongoing and we will continue to fully co-operate.

The Board recognises the focus and diligence shown by management in improving financial crime and fraud controls, and the imperative to get it right.

We are determined to ensure NAB meets the highest standards. We will continue to make investments to keep the bank safe and drive performance over the long-term.

The Board has high ambitions for NAB and is pleased with the direction now set and being acted on.

In a challenging environment, the Board is encouraged by NAB's 2021 full year results. They reflect good momentum across all businesses, capital strength and sound credit quality.

We are pleased to have increased dividends across the full year to 127 cents per share, compared with a reduced level in 2020.

This outcome is closer to the level of shareholder return the Board is targeting going forward. Future dividends will be guided by a target payout ratio in the range of 65 to 75 per cent of sustainable cash earnings, subject to circumstances at the time.

The business delivered a cash Return on Equity of 10.7 per cent for the 2021 financial year. This was 2.4 percentage points higher than last year, although we recognise that this is still lower than 2019.

Our capital ratio at the end of September 2021 was 13 per cent, which is above the target range of

10.75 per cent to 11.25 per cent. Strong capital supports growth, but the Board also looks at returning surplus capital to shareholders.

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Our preference is to continue to reduce our share count, so we can deliver better earnings and dividends per share over the long term. This is underway through a $2.5 billion share buy-back, which started in August and is approximately 40 per cent complete.

Executive and employee remuneration outcomes for 2021 have been set by the Board at a level, that reflects the strong progress we have made on the strategic repositioning of the business and resolution of legacy issues.

It reflects an assessment of performance against the targets set in NAB's 2021 financial year plan, as well as greater employee engagement and significantly better outcomes for customers. This contrasts with remuneration outcomes for the past two years when the CEO and executive team received no short-term incentive payments.

Looking ahead, I am cautiously optimistic that the worst of the economic impact of COVID-19 is behind us. I am confident the Australian economy will rebound in 2022, with the protection of having one of the highest rates of vaccination in the world and a booster program now underway.

The pandemic has accelerated generational shifts in technology. Customers are choosing to bank with NAB in new ways. Today, 94 per cent of customer transactions are online and more than 40 per cent of our home lending appointments are through video conference. We are supporting our customers as they make this change.

Through the investments made in recent years, NAB has strengthened its technology foundations. This enables us to now place greater emphasis on using digital, data and analytics to deliver faster, better and more personalised experiences to customers. We are also strengthening our defences against the growing, global threat of financial and cyber-crimes.

More broadly, new technologies will be central to the decarbonisation of the Australian and New Zealand economies. This will be the greatest economic shift of our lifetime.

NAB's primary contribution to limiting global warming to 1.5 degrees is through the financing we provide to our customers. We are facilitating the investment required to realise the immense economic opportunity for Australia and New Zealand in a low carbon economy.

Our goal is to align our lending portfolio to achieve net-zero emissions by 2050. We were the first Australian member bank of the United Nations' Environment Programme Finance Initiative's Collective Commitment to Climate Action.

We have now also joined the associated Net Zero Banking Alliance, which together set out concrete and time-bound actions for member banks.

NAB is winding down our financing of fossil fuels over time, while at the same time, growing in renewable energy finance. We have made clear statements regarding our targets and approach. We will support an orderly transition of Australia's energy system.

NAB is the only major Australian bank so far to have set an upper limit on oil and gas extraction and production exposures, and to put restrictions on lending to greenfield gas projects.

We will not directly finance any greenfield oil extraction project or onboard new customers predominantly focused on oil extraction. We will not lend to new thermal coal mining projects or take on new thermal coal mining customers. We have set a target for our exposure to thermal coal mining to be effectively zero by 2030, aside from residual performance guarantees to ensure site rehabilitation.

Since 2003 we have lent $11.5 billion to fund more than 150 global renewable energy projects, more than any other Australian bank. We are also well progressed in our target to source 100% of our own electricity from renewable sources by 2025.

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According to the Business Council of Australia, Australia needs a further $50 billion invested in renewables to get to 100 per cent green power generation. That investment alone would still not be enough to take Australia to net zero. It would only address a third of our carbon emissions.

To get to net zero, every business in every industry will have to evolve. Every household will need to make changes. This is where a bank like NAB can help. As a priority, we are working with 100 of our largest greenhouse gas-emitting customers to develop or improve their low carbon transition plans by 2023. We are supporting customers to decarbonise and build resilience to climate change.

Electrifying transport, heating and cooling systems will further reduce reliance on oil and gas fuels. Deloitte analysis shows that this could reduce Australia's emissions by up to 80 per cent by 2050, once electricity generation reaches 100 per cent renewable.

The remaining 20 per cent of Australia's emissions will be harder to abate. As an agricultural nation our farmers and foresters will play a role. Some cutting-edge Australian farms are already using methane capture technology in livestock operations to halve waste-based emissions.

At the same time, there is also increasing recognition of the importance of protecting and restoring natural environments, to mitigate the worst impacts of climate change.

At NAB, we have finalised our work to baseline the estimated attributable financed emissions of eight key sectors of our Australian lending portfolio. These are residential mortgages, commercial real estate, agriculture, power generation, resources, heavy manufacturing, transport, and small and medium enterprises. In the next 12 months we will disclose how we will align our lending to these sectors against the 1.5-degree scenario.

The commercial opportunity to finance the climate transition is significant. Developing and deploying low-carbon solutions will require meaningful backing.

Partnership between business and government is critical. Disruptive innovation involves some risk- taking. History has shown that only a small percentage of inventive concepts reach commercial viability.

The Federal Government's $20 billion Technology Investment Roadmap and the NSW State Government's $3 billion in grants for green hydrogen projects are good examples of partnerships in action.

Before us is an opportunity not just to keep up with the world, but to become a leader in renewable resources and low-carbon technologies. NAB is backing businesses to realise that opportunity.

In this ever-changing environment, ensuring your Board is equipped with the right skills and experience is critical.

We anticipate appointing at least one new director in 2022 to achieve our target Board size of 10, including our Managing Director. We are prioritising experience in transformation using digital technology, and greater diversity across all dimensions.

Anne Loveridge, who has been a member of your Board since 2015, stands for re-election today. Anne is the Chair of NAB's People & Remuneration Committee and a member of the Customer and Nomination & Governance committees.

I can say with confidence that NAB is focused on the right things; serving customers well and helping our communities prosper. That is how we are building long-term value for shareholders.

I thank our team of 32,000 for their hard work in challenging circumstances this year. And I would like to thank you, our shareholders, for your trust and support to build a better bank.

I will now hand over to our Group Chief Executive Officer, Ross McEwan.