Today NAB CEO Ross McEwan delivered an opening statement to the House of Representatives Standing Committee on Economics. Below is Mr McEwan’s statement.
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Thank you Chair. Today is an opportunity to consider issues and opportunities affecting our customers, our industry and the broader community and economy and we are looking forward to the conversation.
Before we get started, I would like to acknowledge the Ngunnawal People, traditional owners of the land on which we meet today, and pay my respects to their Elders past and present.
I am pleased to be joined today by Shaun Dooley, NAB’s Chief Risk Officer, and Rachel Slade, who leads our Personal Bank.
Last time here we spoke about Australia’s prospects following a global pandemic.
Australia and the world did emerge strongly but the rebound did not last as long we wanted.
Households and economies globally are now grappling with inflation that has triggered rapid increases in interest rates and applied pressure on households and businesses.
Australia remains well placed relative to the rest of the world to deal with this. Unemployment is low, there is strong demand for our natural resources and migration is returning.
While the economy has slowed, we will still have growth and many businesses are still ambitious.
But we know it feels hard, and is hard, for many Australians. NAB’s Wellbeing survey shows financial stress is growing, with one in four feeling worse off financially than just a year ago.
Despite this, our customers are proving resilient. They are adapting and making considered changes to where they spend. Our research shows Australians are saving by re-prioritising their spending.
Since interest rates started rising in May 2022, we have contacted more than half a million customers to see how they’re doing. This includes 8,600 home loan customers who we thought were most at risk, but after checking in with them, surprisingly only 14 wanted immediate help.
The number of customers in hardship, while growing, remains below pre-covid levels.
NAB is also talking with our community partners who work with vulnerable Australians.
Good Shepherd, who we’ve partnered with to provide no interest loans for 20 years, as well as the Salvation Army and Financial Counselling Australia, tell us they are seeing ‘newly vulnerable’ cohorts.
We expect more pressure to come on households in the form of one or two more moves by the Reserve Bank of Australia to tackle persistent inflation.
It is my view that the sooner we get to the top of this cycle the better, because while it hurts, it is the uncertainty that is harder to manage through. Certainty will help people trying to budget for what’s ahead.
It’s also important to remember that while around 35 percent of Australians have a home loan, 100 percent are impacted by the increasing cost of living.
