The unthinkable has just happened – one of Australia’s major banks has chosen not to increase its rates, citing a need to “rebuild the trust of our customers”.
National Australia Bank (NAB) had been widely expected to follow Westpac, ANZ and CBA in raising its interest rates, given that bank funding costs are rising. Additionally, the four banks have historically acted in unison on out-of-cycle rate movements.
Those rate hikes came after the Reserve Bank left interest rates on hold again in September, having been stable for the last two years.
However, NAB CEO Andrew Thorburn issued a video statement on YouTube saying that his bank would keep its standard variable home loan rate on hold for the time being.
“This announcement is to confirm that, if you are a NAB home loan customer, our standard variable home loan remains on hold,” he said.
“Our commitment is to listen more, and to act differently, and this is another step in this direction.”
In a written statement accompanying the video on NAB’s website, Mr Thorburn said the decision not to pass on costs to its customers is an exercise in rebuilding trust.
“We are listening and acting differently. We need to rebuild the trust of our customers, and by holding our NAB Standard Variable Rate longer, we help our customers for longer,” he said.
“By focusing more on our customers, we build trust and advocacy, and this creates a more sustainable business.”
A spokesperson for NAB declined to comment on whether the rates freeze would be extended to business loans.
Banks have faced a reputational battering in recent months as the royal commission has uncovered many examples of misconduct and poor practices that have harmed individual and business customers.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.