NAB's chief executive has played down the Reserve Bank's worries about increasing risky lending to property investors.
Andrew Thorburn defended the bank's lending standards, saying it did not put its capital or shareholders at risk.
The RBA recently said mortgage markets were becoming overheated as investor lending jumped to 40 per cent of housing loans, and even higher in Sydney and Melbourne, while owner occupiers dropped.
RBA Governor Glenn Stevens has indicated the central bank is discussing with banking regulators potential temporary policies to cool the double digit growth in the market, which has not been justified by rental demand.
Mr Thorburn argued housing price growth across Australia was inconsistent, with double digit growth uncommon outside Sydney and Melbourne.
"It is not all uniform growth across other cities, regional centres and even parts of Sydney and Melbourne," he told reporters.
"Demand is increasing, population growth and inward migration of people moving to cities is a phenomena that has been occurring for some time, and it's a question of whether hosing stock and apartment stock and the quality of it can keep up with demand."
The bank's borrowers were generally staying ahead on their repayments, he said, with NAB's bad debts down more than 50 per cent in the past year at $877 million.
"We go through a very thorough process to assess people's ability to repay," he said of the bank's investment housing lending.
"The performance of the book shows that so far, in recent history, it's been a good investment that we've made."
Relatively low unemployment was helping with loan quality, he said.
However NAB's net interest margin, a measure of the profitability of its loans, fell during the year due to a price war between the the banks for home loan customers.
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