(26 July 2012 – Australia) National Australia Bank (NAB) has hit back at “competitive propaganda” that business customers are subsidising the banks aggressive push into mortgages.NAB announced a 20 basis point increase in some business lending loans on Tuesday, citing high wholesale funding costs and greater costs for deposits.
The increase in the ”liquidity premium” for mid to large-sized businesses is NAB’s second such increase this year.
However, the group executive of NAB Business Banking, Joseph Healy, told BusinessDay he did not expect a customer backlash.
”It’s not a decision taken lightly because obviously we’re conscious that many businesses are doing it tough and confidence generally is not as strong as we would all like to see it,” Healy said.
”We treat these businesses quite separately.
“Our business lending book is one of the core strengths of the company; we’re not going to start doing anything that will weaken our core strength,” Healy said.