NAB CEO Andrew Thorburn said the bank is “listening and acting differently” to its customers in the wake of the banking royal commission and will keep its standard variable rate for home loans on hold for now, despite the RBA keeping the cash rate on hold for the record-breaking 25th time this month.
This is after Westpac, CBA and ANZ all lifted their home loan rates in quick succession in the last fortnight.
But for Mr Thorburn, it’s a matter of trust.
“We need to rebuild the trust of our customers, and by holding our NAB standard variable rate longer, we help our customers for longer.
“By focusing more on our customers, we build trust and advocacy, and this creates a more sustainable business,” he said.
Mr Thorburn also said that NAB will continue to regularly review its rates.
He said this was to assess whether current market conditions, including funding costs, continue.
NAB has taken a bath in the much-publicised banking royal commission where it admitted to breaking the law as many as 80 times from 2014.
In an earlier media statement on the royal commission, Mr Thorburn said that no leader in the banking industry could be proud of what was heard during the royal commission.
“The Australian community has heard confronting evidence that is unacceptable.
“It is now clear to me that the royal commission is necessary and justified. Customers and their concerns are being heard through this process, and it is important that as an industry we learn from what we hear, and that this intervention becomes the catalyst for the industry to restore the trust and respect of the community.”
On 30 August, Westpac announced it would lift its variable home loan rate 14 basis points on 19 September.
On 6 September, CBA announced it would lift its variable home loan rate by 15 basis points on 4 October.
Also on 6 September, ANZ said it would lift its rates by 16 basis points on 27 September.
All of this was in spite of the RBA announcing on 4 September that it would leave the cash rate on hold at 1.5 per cent for yet another month. It marks the longest ever run of interest rate stability in Australia, with the last movement (a cut) happening back in August 2016.
The decision to keep rates on hold for yet another month had been anticipated.
Head of research at property data firm CoreLogic, Tim Lawless, said at the time that the major lenders might be beginning to feel restless.
“There are plenty of factors keeping interest rates on hold, but top of mind is the fact that mortgage rates are already edging higher as lenders look to balance their profit margins against higher funding costs and a smaller deposit base,” he said in the build up to the RBA’s cash rate announcement last Tuesday.
“With the first of the big four banks announcing an out-of-cycle rate hike, the prospects for a higher cash rate have likely been pushed back even further; we could even see debate for a lower cash rate becoming more prominent.”