For ASX investors seeking steady passive income, blue-chip financial shares like National Australia Bank Ltd (ASX: NAB) are a great option.
ASX bank stocks are generally considered cyclical, rather than traditional defensive shares. But large-scale banking majors like NAB also have some defensive qualities.
What makes NAB stand out from the other banks is that it earns a large portion of its revenue from loans and deposits. This means it is able to create a steady stream of net income.
The bank also has exposure to business banking and holds a leading market position in Australian business and SME banking. This, combined with home lending, means NAB has a more diversified earnings base than other banking majors that lean heavily into residential mortgages.
And this is great news for its investors looking for passive income.
Like its peers, NAB is also huge in scale. It is the fourth-largest company on the Australian sharemarket, by market capitalisation, and the third-largest Australian bank.
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What's the latest from NAB shares?
At the time of writing, NAB shares are trading for $42.68 a piece. That's around 1% increase for the year-to-date, and 12% higher than 12 months ago.
NAB shares surged to an all-time high of $49.10 in February this year but quickly crashed back down. The impressive thing is that NAB shares have now rebounded around 20% from when the shares reached an annual low in June.
NAB's share price recovery is one thing, but what does the bank's passive income look like?
Let's break it down.
What is NAB forecast to pay shareholders in FY27?
NAB has been paying regular dividends to shareholders since 2003.
The bank usually pays two fully-franked dividend payments per year, in July and December.
NAB paid its shareholders an interim dividend of 85 cents per share, fully franked, last month.
Based on the latest forecasts, the bank is expected to pay a total dividend of $1.70 per share in FY26 (ending 30th September).
NAB is then forecast to pay $1.72 per share in FY27.
At the time of writing, that translates to a forward dividend yield of around
Based on the current share price of $37.86, that translates to a forward dividend yield of nearly 4% for FY26. For FY27, the dividend yield is just over 4%.
How many NAB shares do I need to buy to generate $10,000 in passive income from dividends?
At the time of writing, NAB shares are trading for $42.68 a piece.
Assuming NAB pays the expected $1.70 per share dividend in FY26, investors would need to buy around 5,882 shares in order to earn around $10,000 per year in passive income.
To earn the same amount in FY27, assuming the bank pays the forecasted $1.72 per share dividend, investors would need to buy around 5,813 shares to earn roughly the same amount.
What will that cost me?
Using the current trading price of $42.69.
That means, in order to buy the 5,882 NAB shares needed for a $10,000 annual passive income in FY26, you would need to invest around $251,100.
For the same level of passive income in FY27, investors would need to spend around $249,000 on NAB shares.
It's not a small investment, but it's one that could pay off over the long term.
And in the meantime, you'd earn a regular passive income from NAB dividends, while also benefiting from any share price increase.
And remember, you don't have to invest the full amount at once. You can slowly build your investment over time and let compounding do the rest.
