Owning National Australia Bank Ltd (ASX: NAB) shares has usually been a very useful choice for dividends over the years. Experts think the ASX bank share could continue to deliver pleasing passive income.
As an already-huge bank, the company does not have rapid growth prospects. The ASX bank share is able to send a lot of its profit each year to investors because there are not many places for the bank to invest for a good return. This results in a relatively low price/earnings (P/E) ratio.
Therefore, the business is able to support a generous dividend payout ratio for shareholders.
So, let's look at projections on how generous the bank may be.
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FY26
We're more than halfway through the NAB 2026 financial year, which ends in September 2026, rather than June.
The ASX bank share has already told investors about its FY26 half-year result, which saw the bank report statutory net profit of $2.75 billion and underlying cash earnings of $3.6 billion. That represents 0.1% growth year-over-year and 2.3% growth half over half.
The bank reported that its growth was driven by its business and private banking segment, which delivered 9.9% cash earnings growth to $1.85 billion, thanks to lending volume growth, broadly stable margins and improved markets and fee income.
Within that result, NAB decided to maintain its dividend per share at 85 cents. That's understandable considering underlying cash profit moved very little.
One of the biggest problems for the ASX bank share was its credit impairment charge of $706 million, partially as a result of potential stress related to the Middle East conflict.
In terms of the potential dividend for the 2026 financial year, the forecast on Commsec suggests the ASX bank share could pay an annual payout of $1.70 in FY26. That translates into a possible grossed-up dividend yield of 6.4%, including franking credits, at the time of writing.
That's a solid level of passive income compared to many other passive income options, in my opinion.
FY27
The next financial year could be particularly interesting for investors, considering all of the global impacts on the economy and how interest rate changes could impact profitability.
According to the forecast on Commsec, the business could deliver a slightly higher annual dividend per share of $1.72. That translates into a potential grossed-up dividend yield of 6.5%, including franking credits, at the time of writing.
The projections also suggest the bank could deliver higher earnings per share (EPS) in both FY26 and FY27. The forecasts would put the NAB share price at under 15x FY27's estimated earnings, at the time of writing, according to Commsec.
The collation of analyst opinions on NAB shares suggests there are currently two buy ratings, five sell ratings and nine hold ratings on the business.
Therefore, there could be better opportunities out there than NAB shares.
