NAB raises businesses rates
(3 February 2016 – Australia) National Australia Bank (NAB) yesterday raised some business lending rates, naming “increased costs” as key driver in the decision.
In a statement, the bank said it increased its short-term borrowing rates by between 8 basis points and 29 basis points though it left its benchmark and long-term rates unchanged.
In 2015, Australian lenders raised a record A$20 billion and are passing on the cost of holding more capital to borrowers to protect net interest margins and return on equity. It is expected the Big Four may need to raise an additional A$30 billion in capital.
NAB’s rate hike follows an increase in mortgage rates by the biggest banks for property investors in July and owner-occupiers in November last year.
“We need to ensure we are getting the balance right between serving our customers and shareholders while considering the broader economic and regulatory environment,” Antony Cahill, group executive for product and markets at the Melbourne-based bank, said in the statement.
Business credit increased up to 6.3 percent in December, RBA data shows. East & Partners Deposit Funding & Debt Index provides further demand side analysis of the business deposit and lending landscape.
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