NAB breaks away from rest of Big Four, keeps rates on hold
UNLIKE its Big Four rivals, NAB has made an unexpected move to keep its variable mortgage rates on hold.
Economy
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NAB is keeping its variable mortgage rates on hold despite moves by its Big Four rivals to hike rates in response to increased funding costs.
Chief executive Andrew Thorburn on Monday says National Australia Bank will continue to monitor funding conditions, but will continue to hold its standard variable rate at 5.24 per cent.
MORE: NAB MOVES TO ‘REBUILD TRUST’
Westpac, Commonwealth Bank and ANZ have over the past two weeks said they would raise their standard variable rates for owner-occupiers to 5.38, 5.37 and 5.36 per cent respectively.
Mr Thorburn indicated that NAB’s decision was a direct result of an environment in which huge profits and revelations of misconduct aired at the royal commission had damaged the big banks’ public standing.
“We need to rebuild the trust of our customers, and by holding our NAB standard variable rate longer, we help our customers for longer,” Mr Thorburn said.
“By focusing more on our customers, we build trust and advocacy, and this creates a more sustainable business.”
Sharing the announcement on Twitter, NAB said “we know that by holding our rates longer, we’re helping our customers more.”
The move was praised by Prime Minister Scott Morrison as a “good call”.
Good call by @NAB not to lift mortgage rates. They seem to get it.
— Scott Morrison (@ScottMorrisonMP) September 10, 2018
The out-of-cycle hikes by NAB’s rivals led to economists last week suggesting the Reserve Bank of Australia would keep the cash rate on hold at a record low of 1.5 per cent for even longer than previously thought.
The RBA, which has not moved on rates since August 2016, would be wary of increasing the load on borrowers — and decreasing the amount they can spend elsewhere in the economy — and could even cut the cash rate if the banks hike further, AMP chief economist Shane Oliver said.
Remember when NAB said they were 'breaking up' with the Big 4? #BankingRC https://t.co/y0Oep9R9VX
— Dan Ziffer (@danziffer) September 9, 2018
Good on you nab. Whilst this might cost in terms of short term profit, this decision will build long term brand value in my opinion. ðŸ‘ðŸ‘👠#interestrates https://t.co/tz1qd6j6qb
— Stuart Wemyss (@StuartWemyss) September 9, 2018
Originally published as NAB breaks away from rest of Big Four, keeps rates on hold