In a move that shows just how profitable home loan lending really is, the SMH reports this morning that the from today, the NAB is going to offer new customers $1,000 to take a home loan from the bank.
It’s an unashamed grab for market share in the $1.3 trillion home loan market but it is a move that highlights the increasing emphasis on home loans from Australia’s major banks perfectly.
Likely it is also a move which will raise the interest, perhaps even ire, of the prudential regulator APRA as well as the RBA at a time when so-called macro-prudential rules are being openly discussed, even though Treasurer Joe Hockey yesterday said he didn’t favour them.
The last time these sorts of inducements were championed by the NAB, APRA sent a letter to all ADIs – widely seen as a direct response to the NAB – warning them not to grow their home loan book above system.
The NAB’s tactics may even be discussed at the ACCC and certainly, given the Murray Inquiry is interested both in competition and financial system stability, this latest tactic to grow their already concentrated market share might rate a mention in the final report.
But the NAB is unabashed. The SMH reports NAB group executive for product and markets Antony Cahill said: “An extra $1000 in the pocket this spring can help cover any unexpected costs that can crop up in the process of moving.”
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