National Australia Bank Ltd (ASX: NAB) shares are retreating from their 17-year high on Tuesday.

In morning trade, the banking giant's shares are down 2.5% to $38.95.

Why are NAB shares falling?

While nobody likes to see a share price fall, today's weakness in the NAB share price could actually be classed as good news for shareholders.

That's because the decline signifies that pay day is coming for the big four bank's lucky shareholders.

Last week, NAB released its full year results and revealed a 2% decline in revenue and an 8.1% fall in cash earnings to $7.1 billion.

This was driven largely by lower net interest margins (NIM) and lower Markets & Treasury (M&T) income, which was partially offset by volume growth and higher fee income.

Commenting on the result, NAB's CEO, Andrew Irvine, said:

Consistent investment to deliver better customer outcomes has supported another year of strong growth in our leading SME franchise, with Business & Private Banking (B&PB) increasing deposits by 7% and business lending by 8%.

In Australian housing, our growth was sub-system at 3% as we balanced growth against competitive pressures. We will continue to manage portfolio returns through a disciplined approach in this dynamic market.

However, despite this profit decline, the NAB board elected to increase its final dividend by 1 cent to 75 cents per share. This brought its fully franked total dividends for FY 2024 to $1.69 per share.

It is that fully franked final dividend that NAB's shares are going ex-dividend for today, causing its share price to fall.

Why does the ex-dividend date matter?

The reason that NAB shares are falling on the ex-dividend date is because the rights to that payout are now settled.

From today onwards, anyone buying the bank's shares will receive the shares but the dividend will stay with the seller.

And given that nobody wants to pay for something they won't receive, a share price tends to drop to reflect this.

In addition, often investors that want to sell shares will stick around for the ex-dividend date to lock in the dividend before selling. This can put additional pressure on a share price.

When is pay day?

Shareholders won't have to wait overly long before they receive their pay check from NAB.

It is scheduled to pay shareholders its 75 cents per share dividend in a touch over a month on 16 December.