Irvine appears optimistic with a healthy dose of caution heading into 2026
“I have hope for our nation and remain optimistic for the year ahead,” Andrew Irvine (pictured), chief executive of Australia’s third-largest bank NAB, has proclaimed in his annual address to the public.
He has a multitude of reasons to be optimistic, to be fair.
Employment remains super strong in Australia, which has served to keep the economy ticking over nicely; perhaps too nicely, though, given the spike in annual inflation seen towards the tail end of 2025.
Nonetheless, household spending remains buoyant, with the latest spending data showing a stronger-than-expected 1% month-on-month rise in November 2025, following an upwardly revised 1.4% in October. This made for the first back-to-back months of 1%-plus gains in three years.
Australia’s red-hot housing market has shown signs of cooling, with December house price growth across the capitals rising by 0.5% month on month – the softest rise in eight months.
This could give some breathing room for first-home buyers trying their best to get onto the property market, although the jury is still out on the inflationary impact of the government’s generous First Home Guarantee incentive scheme expansion.
Irvine questioned whether the Reserve Bank of Australia (RBA) will need to slap a 25-basis-point hike on the cash rate to take the edge off Australia’s niggling inflation concerns, even if the challenge “is that we don’t have any excess capacity”.
This leads to one of Australia’s biggest existential questions of the moment: How can we lift flailing productivity?
The Labor Government under Prime Minister Anthony Albanese is acutely aware of this problem, having outlined 10 key reform areas last August in a bid to tackle the country’s productivity crisis.
Ideas included progressing towards a single national market and modernising the federation, accelerating approvals in national priority areas, building a skilled and adaptable workforce, and creating a better tax system.
These are of course big-picture proposals of which the specifics remain very much in the ‘to be announced’ category, but Irvine believes it’s a challenge that cannot be ignored.
"Finding ways to help productivity is going to be important to help the economy grow faster,” he said.
He also raised concerns of the widening gap between the haves and have nots, warning that widening intergenerational inequality poses a threat to the prosperity of the younger generations.
“In Australia, for the last hundred years this has been one of the best countries in the world to live and people could have confidence that their children would have a better life than them. I think for the first time that is uncertain and that’s a problem,” Irvine said.
However, “I think it is fixable”, he added.
Backing risky businesses
Speaking as the leader of Australia’s largest business back, Irvine called for a shift in Australia’s approach to business risk.
He advocated for stronger support systems for entrepreneurs and growth lending to foster innovation and competitiveness.
“Bankruptcy in Australia is still viewed as failure by many,” said Irvine.
“In the US, failure is almost seen as a rite of passage and many entrepreneurs have failed twice or more. In Australia we don’t have as much venture capital and banks don’t do much growth lending due to our risk settings. More incentives to help businesses to start and grow are also needed.”
NAB’s fortunes
Despite some salacious coverage of Irvine’s drinking habits in 2025, he has steered NAB into the new year on firm footing.
Per the latest data from the Australian Prudential Regulation Authority (APRA), NAB increased its loan book by NAB by $17.7 billion, or 5.5%, on a year-on-year basis as of 30 November.
This was a better result than Westpac and ANZ, although it trailed Commonwealth Bank by 150 percentage points.
On the stock market, shares are up nearly 12% year on year, far above overpriced CBA’s 1%, although trailing Westpac and ANZ (the latter which has enjoyed a strong sentiment rally with the hiring of Nuno Matos as chief executive last May).
One notable headwind for NAB, as Australia’s largest business bank, is the renewed push by its competitors into business lending.
Matos has business lending square in his sights as he attempts to lift ANZ’s fortunes, while Westpac has made leaps and bounds in this space, with total business lending up 15% in its financial year ending 30 September.
