NAB on Thursday unveiled a string of writedowns and provisions, chiefly linked to misconduct by its troubled UK business.
The company expects its cash earnings for the year to September 30 to be between AU$5.1 billion and AU$5.2 billion, down from AU$5.94 billion a year ago.
However, it said that it would lift its fully franked final dividend two cents to 99 cents.
Chief executive Andrew Thorburn, who was appointed to the role in August, said the impairments and provisions were disappointing but necessary.
"Taking these decisions gives us more clarity going into the future, and allows us to focus on the core Australian and New Zealand franchises, which remain in good shape," he said.
"NAB is committed to including these types of adjustments within cash earnings now and in the future."
The new charges include provisions of £420 million and £250 million relating to past misconduct by its UK subsidiary Clydesdale Bank and interest rate hedging products.
Along with other UK banks, the Clydesdale Bank has faced ongoing scrutiny over the selling of its payment protection insurance and interest rate hedging products.
In a statement, NAB said the total cost of the past misconduct to the company is unknown.
"There remains a wide range of uncertain factors relevant to determining the total costs associated with conduct-related matters, including any possible fines," NAB said in a statement.
"The increased conduct provisions are adequate and appropriate based on the information available to us today as part of our year-end review and financial-close process."
NAB also announced an AU$297 million impairment linked to capitalised software, mostly within its Australian business.
The bank said the benefits linked to the software had been substantially below what was expected.
"Where the benefits associated with the software were substantially reduced from what had originally been anticipated, the costs of development are in excess of expectations, or there is uncertainty when the technology capability will be deployed, the software has been written down to its recoverable amount," the company said in its statement to the Australian Securities Exchange.
"Included within the above impairment charge is AU$106 million (AU$74 million after tax) for certain assets related to the NextGen capitalised software balance, other than the core banking platform asset where no impairment is required. This represents approximately 10 percent of the total NextGen capitalised software balance."
It will also take a $120 million hit relating to deferred tax assets in the US, while a reduction in tax offsets linked to research and development will reduce full-year cash earnings by a net AU$28 million, after tax.
Thorburn said the bank's senior executive team would have their bonuses cut as a result of the slide in earnings.
"The feedback that I've had from investors over the last few months is that we do need to improve our performance, and that's what I want as well," he said.
"It's clear this result is well down on expectations and on our plan, and as our bonus pool is based on cash earnings and return on equity, then we can also expect and know that that bonus pool will also be reduced," he said.
But he remains confident about the long-term outlook for the bank, which has consistently underperformed against its "big four" rivals: Commonwealth Bank, Westpac, and ANZ.
"I think we have a core franchise which is really strong and has a lot of potential," he said.
By the time of writing, NAB's share price had recovered almost a full cent from the day's low to sit at AU$32.54.