SYDNEY, Nov 9 (Reuters) - National Australia Bank (NAB.AX) on Tuesday beat earnings estimates as lower pandemic-related provisions helped profit jump more than three-quarters, but at the same time flagged continuing pressure on lending margins and its shares slid. Australia"s second-largest lender posted above-average growth in home and business lending, and said its "optimism about the future" was reflected in a dividend of 67 Australian cents a share, more than double last year"s payout. [nL4N2P6071 Cash profit of A$6.56 billion ($4.85 billion) for the year ended Sept. 30 beat a Refinitiv estimate of A$6.43 billion.The bank released A$217 million of provisions it had set aside to soak up the COVID-19 pandemic fallout. But the extremely low interest rates that have driven a huge rise in home prices and helped the Australian economy rebound from the coronavirus pandemic have also hurt bank margins - driving a 28% slide in NAB"s markets income for the year.NAB shares fell 1.5% while its big banking peers were between half and one percent lower. "We did see a little bit of margin contraction .. but I think it was a very credible result," said Paul Xiradis, chief investment officer at Ausbil Investment Management. "Reaction initially was taken positively and I think what we are seeing now is a bit of profit-taking."NAB expects to earn more from its interest-earning portfolio this financial year - with markets pricing a hike to Australia"s record low interest rates by July - but stiff competition will mean the pressure on margins would continue, it said. "There"s net (margin) headwinds for next year," Chief Financial Officer Gary Lennon told analysts in a call. "This year we managed to essentially net them off ... I think that will be difficult for 2022, but I also don"t think it"ll be a disaster scenario." NAB"s net interest margin NIM, a key measure of bank profitability, was 6 basis points lower to 1.71% for the year, largely driven by its holding of low-yielding assets. Last week, smaller rival Westpac Banking Corp (WBC.AX) fuelled investor anxiety regarding margin pressures facing Australia"s big four banks, revealing it had to take a big margin hit in order to growth its mortgage business. read more OIL & GAS CAPS NAB has been targeted by environmental activists for continuing to finance gas projects in Australia. On Tuesday is said it would limit its "direct" funding to projects that play a role in national energy security. The bank also said it would not directly finance greenfield gas extraction projects outside Australia, but would continue to finance integrated liquefied natural gas in Australia, New Zealand, Papua New Guinea and other selected regions. It would cap oil and gas exposure at $2.4 billion by 2025, and a reduction thereafter to be aligned with goals set out by the International Energy Agency (IEA) by 2050. "We"ve had a number of very strong activist groups say to us, we want you to abide by the IEA. Actually, we think that"s the right thing to do and that"s what we"ve actually done," Chief Executive Ross McEwan said. But on Tuesday activist group Market Forces criticised the bank, saying the "direct" reference in its new policies kept a loophole that allowed it to fund the companies running "dirty" projects even if not the projects themselves. Extinction Rebellion protesters also targeted the bank"s offices in Sydney on Tuesday, writing "greenwash in progress" on its windows. "We have no intention of being involved in any greenwashing whatsoever," McEwan told reporters in a call from Melbourne. "Our intent is to participate in helping Australia get into a much better position from a carbon emissions perspective." ($1 = 1.3517 Australian dollars)