The Dividend Reinvestment Plan (DRP) is an optional program offered by National Australia Bank (NAB) that allows eligible shareholders to use their cash dividends to purchase additional NAB shares rather than receiving them as a cash payment. By participating, your dividends are automatically reinvested into new ordinary shares on the dividend payment date, which can be an efficient way to increase your shareholding over time without incurring brokerage costs.
It is important to note that the management of the DRP—and access to your historical dividend records—is handled by NAB’s external share registry, Computershare, rather than through your standard retail banking app or Internet Banking. Shareholders can adjust their DRP participation, update their payment instructions, or download their dividend history by logging directly into the Computershare Investor Centre.
| Category | Details |
|---|---|
| Methods | Computershare Investor Centre (Online) |
| Processing Time | Effective for the next dividend payment cycle (subject to cut-off dates) |
| Eligibility | Existing NAB shareholders |
| Key Requirements | Securityholder Reference Number (SRN) or Holder Identification Number (HIN) |
Pro-Tip: Check your dividend statement for the 'DRP Residual Amount'. When you participate in a DRP, the bank calculates the number of full shares you can buy with your dividend. Any remaining cash that is not enough to purchase another full share is carried forward as a 'residual' balance. This balance is not lost; it is held by the registry and added to your next dividend payment to purchase shares in the following cycle.
Frequently Asked Questions
Q: If I join the DRP today, will my next dividend be reinvested?
Whether your next dividend is reinvested depends on whether you have updated your election before the 'Record Date' for that dividend. If you update your DRP preference after the Record Date has passed, the change will generally take effect from the following dividend payment. Check the NAB Shareholder Centre for the specific 'Important Dates' calendar to confirm the cut-off for the upcoming payment cycle.
Q: Does participating in the DRP affect my tax obligations?
Yes. Even though you are receiving shares rather than cash, the dividend is still considered assessable income for tax purposes in Australia. The number of shares you receive under the DRP is based on a volume-weighted average price (VWAP) calculation, and you will need to keep records of these acquisitions for your capital gains tax (CGT) cost base calculations in the future. Speak with your accountant or tax adviser to understand how to report your DRP activity on your annual tax return.
