“However, strong employment conditions along with substantial household and business savings give us confidence in the resilience of our customers and the broader economy.”

NAB said for the full year to September 30 its revenue was up 8.9 per cent. Its loan books rose by 9.3 per cent on the back of a 13.3 per cent lift in deposits.

Over the year NAB made $104 billion in new home loans and lent an additional $122 billion to businesses. But it said market dynamics are changing and in home lending, “volume growth is expected to slow” in 2023 as fixed loans mature amid “intense price competition in a rising rate environment”.

Like the other banks, NAB has reported pressures on margins and costs: the net interest margin, a key revenue driver, was down 6 basis points to 1.65 per cent, with the bank citing higher holdings of liquid assets and housing market competition as the primary cause.

Earnings in the consumer bank fell by 3.6 per cent to $1.5 billion “primarily reflecting the impact of home lending competition on margins”, NAB said. The business and private bank performed better, with cash earnings up 21.5 per cent to $3 billion.

Expenses were up 5.8 per cent to $8.3 billion, including higher banker pay, technology costs and remediation of customers as the clean-up from its AUSTRAC action continues.

NAB will pay a 78¢-per-share final dividend, fully franked, to bring the full-year dividend to $1.51, up from $1.27 last year and 2¢ higher than expectations. The market expected the cash profit to come in just above $7 billion.

Mr McEwan said the economy is expected to soften as higher interest rates hit household budgets. NAB expects the cash rate to peak at 3.6 per cent in March 2023 and unemployment to rise to 4.5 per cent by the end of 2024.

But for now, bad debts, already near rock bottom, continue to fall. NAB said the number of loans more than 90 days overdue is just 0.66 per cent of its book, which fell by 0.28 percentage points over the year. It took charge of just $125 million for credit impairments. It is carrying provisions against potential losses of $4.8 billion.

Earlier this week, Westpac reported a full-year cash profit of $5.276 billion for the year to September 30, which was down 1 per cent.