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AAP
AAP
Business
Prashant Mehra

NAB forecasts rocky road to slow growth

Climate-change protesters outside the NAB annual general meeting in Melbourne. (Luis Ascui/AAP PHOTOS) (AAP)

National Australia Bank has joined its major banking rivals to flag headwinds from rising interest rates and high inflation next year but says it still expects the economy to grow, but at a slower pace.

NAB chairman Philip Chronican told shareholders at the company's annual general meeting on Friday next year could be "a little rocky" and the lender was considering the geopolitical landscape and its impact locally.

The Reserve Bank of Australia last week lifted its benchmark cash rate for the eighth month in a row to 3.1 per cent, in its battle to rein in rising prices.

All the major banks, including NAB, have passed on the rate increases in full, raising concerns defaults could jump next year as borrowers face higher repayments and rising living costs.

The central bank expects inflation to peak at about eight per cent in the current quarter.

"It is clear that 2023 will be a year of slower growth than 2022 and challenges will continue to emerge and evolve," chief executive Ross McEwan told shareholders in Melbourne.

"Many of our customers are now facing conditions they may not have experienced for a number of years. Higher inflation, rising interest rates and slower growth are starting to impact both businesses and consumers."

Resilient business conditions and a return to higher levels of migration mean Australia is well-positioned to deal with the headwinds, Mr McEwan said, but he warned New Zealand's business conditions would be worse with interest rate rises slowing its economy considerably.

The NAB CEO also raised the issue of cyber security, which has become a priority for Australian companies following recent customer data breaches at Optus and Medibank among others.

NAB was devoting more resources to combat cyber-attacks, fraud and scams and was working internally and as part of national efforts to protect all Australians and New Zealanders, Mr McEwan said.

Shareholders voted in favour of the bank's remuneration report and the granting of performance rights stock to the CEO.

However, like its major banking rivals, NAB also faced repeated questioning over its climate policy and came under fire for continuing to lend to fossil fuel companies.

The meeting was briefly marred by a disruption from climate activists, with advocacy group Move Beyond Coal claiming responsibility for the protests inside and outside the venue.

A resolution jointly introduced by environmental group Market Forces calling on NAB to demonstrate its operations will not be used to finance new fossil fuel projects failed to get enough investor support on Friday.

"Climate change is one of - if not the - most significant long-term challenges and opportunities of our time," Mr Chronican said.

"We are playing an important role in progressively redirecting funding from emissions intensive sectors toward low and zero emissions activity. There is no question that this needs to happen."

NAB says it has committed to ending financing of thermal coal projects by 2030.

By 1400 AEDT, NAB shares were trading about one per cent lower in a weak Australian market.

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