NAB Struggles for Productivity Amidst Expansion and Payroll Issues
As one of the four largest financial institutions in Australia, the National Australia Bank (NAB) continues to face challenges in its quest for productivity enhancement. Recent data indicates a struggle to extract significant productivity gains, despite an increase in the number of full-time equivalent employees, and a concurrent expansion in its home loan business. Additionally, the bank has been dealing with payroll discrepancies leading to substantial remediation costs.
Employee Count and Productivity
According to recent data, NAB’s full-time equivalent employees in continuing operations were tallied at 41,723 at the end of September 2025. This represents an increase of 7.0% over one year and a rise of 4.4% over six months. However, this increase in workforce does not seem to translate directly into productivity gains. It’s important to note that some of these newly added employees are part of the bank’s “modular” program of technology modernisation, which likely contributes to future efficiency rather than immediate productivity.
Home Loan Business Expansion
NAB’s strategy of augmenting the level of new proprietary home loan business has led to an increase in workforce as well. The bank reported that it added 270 home loan lenders over the financial year 2025. This expansion resulted in proprietary channel drawdowns increasing to 41% of total drawdowns in FY2025 from 38% in FY2024. The new business generated through this channel is typically marked by returns of 20% or more than the same business sourced through mortgage brokers. This strategic growth, while increasing NAB’s market share, also places a demand on resources, which could affect overall productivity levels.
Payroll Issues and Remediation Costs
Compounding the productivity concerns is the issue of payroll discrepancies. NAB has acknowledged that it has not been able to accurately pay its employees. This has led to the bank incurring costs of $130 million for “payroll review and remediation costs,” with $44 million expensed in the second half of the financial year. Further payroll remediation costs are expected in the current financial year, although the exact figure is yet to be quantified. This not only impacts the bank’s financial position but also potentially affects employee morale and trust, key components of productivity.
Despite these challenges, NAB remains committed to its growth strategy and technological modernisation. It is anticipated that with the resolution of payroll issues and the successful integration of the new workforce, the bank will be able to enhance its productivity and maintain its competitive position in the market.
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