National Australia Bank has reported a three per cent fall in third-quarter cash earnings to $1.65 billion, hurt by higher investment spend and credit impairment charges, and warned of additional provisions in the second-half.

Chief executive Andrew Thorburn says there are “significant uncertainties” in finalising the provisions as the bank works to resolve several “previously disclosed regulatory compliance investigations”.

“The Royal Commission (into Australia’s financial services sector) is challenging us with its focus on where we have let customers down,” Mr Thorburn said.

“We are determined to respond and become a better bank through living our purpose and values every day.”

The additional costs will be excluded from the expense growth guidance of 5 to 8 per cent for 2017/18, Mr Thorburn said in a statement on Tuesday.

For the past few days, NAB has faced a grilling at the royal commission over the fees-for-no-service scandal, with a senior executive fronting the inquiry.

On Tuesday, NAB said credit impairment charges rose nine per cent to $203 million in the third-quarter, with expenses up two per cent.

NAB said its net interest margin declined “slightly”, reflecting higher short-term wholesale funding costs and fierce home loan competition.

Revenue rose one per cent, supported by growth in small to medium-sized lending within business & private banking and a strong contribution from its New Zealand operations.

Cash earnings fell one per cent in the third-quarter from the second quarter of 2017/18.

NAB shares fell 15 cents, or 0.53 per cent, to $27.94 on Monday.