The National Australia Bank Ltd (ASX: NAB) share price is an interesting investment consideration after some surprisingly positive news that was released this week by the Australian Prudential Regulation Authority (APRA).
Unlike Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC), NAB makes the biggest portion of its profit from business banking. Therefore, its performance in business lending is integral for its overall profitability and the direction of profit.
Amid all of the uncertainty created by US tariffs, there are some positives for NAB shareholders to focus on.
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June loan growth
The latest APRA statistics showed that NAB achieved its best-ever month of business lending, according to the Australian Financial Review, under the leadership of Andrew Auerbach, the new boss of the division.
Business lending has become increasingly competitive following efforts by some of NAB's peers, particularly CBA, which want a higher market share. That could be problematic for the NAB share price if it continued losing market share.
The APRA stats showed that NAB lent $4.5 billion of new loans in June, beating the previous best month of June 2021.
Areas where NAB delivered the strongest lending growth in June were agriculture, construction, commercial real estate, and accommodation, as well as the category of small and medium-sized businesses.
The AFR also noted that NAB recorded solid business lending growth in May after a challenging first few months of 2025. The newspaper reported that Andrew Auerbach said this week:
This growth isn't by accident. Our team of more than 6000 bankers have been getting out in market over the past few months and visiting customers to understand how we can help them grow.
[NAB has a] strong pipeline of lending opportunities that we're seeing pull through over the past few months. We're focused on continuing to build on this momentum and deliver for our customers.
Is the NAB share price a buy?
The broker UBS currently has a neutral rating on the bank, with a price target of $37.50, implying little movement over the next 12 months.
UBS said in a note earlier this week:
Business banking in our view remains a growth vector for the Australian banking sector, and NAB is well placed to benefit from this despite recent mkt share losses. Digital lending should drive improved efficiency, and client outcomes (overtime). Costs within B&PB recently (FY24) rose above $3B (+6.9% 3YR CAGR), although it's uncertain if digital adoption will offer cost out opportunities in the short term. Driving the primacy of client relationships on deposits remains key too, and we think NAB is delivering in this vertical with the loan to deposit ratio falling to ~116% from 130%.
On the valuation, UBS said the NAB share price is "trading at the top end of its historical range". The next key update for the business will be the FY25 third-quarter trading update, to be released on 18 August. UBS predicts NAB's net profit will very slightly increase in FY25 compared to FY24.
