National Australia Bank’s (NAB) ratio of troubled loans climbed to its highest level in seven years in January, largely due to mortgage borrowers falling behind on repayments after exiting Covid-19 moratoria.

Impaired assets – made up of defaulted exposures and loans in arrears by 90 days or more – equalled 1.18% of gross loans and advances in January, up 17 basis points on end-December and well above the prior end-June peak of 1.06%. It was the highest ratio for NAB’s continuing operations