Banks have shown they can protect NIM with out of cycle interest...

Banks have shown they can protect NIM with out of cycle interest rate rises. NAB has not done this so far, where the other (mostly) banks have. NAB will surely move in this direction (with the other banks) if required.

A rising interest rate environment is generally helpful for banks, who profit from vast cash or near cash holdings that receive little interest and term deposits with fixed rates. Notice your mortgage rate goes up instantly, whereas your credit account rates move up less and more slowly.

Banks don't really care if real estate falls (in a controlled manner), Australian banking is quite different to US banks, you can't walk away from a loan. Loan to Valuations over 80% are also covered by mortgage insurance. Most Australians, (particularly in Sydney and Melbourne) if they have taken a loan out prior to the last 3- 4 years, are well in front with property prices up by 50% or more. A real estate  "crash" will just see prices return to the baseline. Indeed despite real estate price falls across many Australian markets recently, some quite significant (Perth and Darwin), doubtful debt provisions are falling.

NAB and other banks continue to make massive profits, in the many billions, and a remain quite nimble players. They have the ability to continue to substantially cut costs if loan originations continue to fall. The application of information technology is a great saver for banks (been into a bank branch lately?)