National Australia Bank’s first-half profit tumble underlined the toll intense mortgage competition is still claiming on margins, demonstrating the value of its No.1 business banking franchise where the pipeline for new loans swelled to the largest on record.

After reporting a 12.8 per cent drop in first-half cash profit to $3.55 billion and further squeeze in net interest margin to 1.72 per cent from 1.77 per cent a year ago, new chief executive Andrew Irvine said the March pipeline for business lending was “frankly astonishing”.