Australian Banking Oligopoly Needs To Change NAB Chief Says

Post by Sharat on April 8, 2010 · Under Australian Economy, Business News, Company News, banking, interest rates, mortgages · Comment

Cameron Clyne, chief executive of Australian banking major, National Australia Bank (NAB) says that oligopoly which effectively controls the banking industry is running the risk of heavy handed regulatory intervention if it does not improve its reputation.

Mr. Clyne has held the top job at NAB for over a year, and developed a retail banking strategy centred on transparent interest rate adjustments, financial service provision for the disadvantaged, and the scrapping of unpopular banking fees.

Mr. Clyne, speaking at an Australia-Israel Chamber of Commerce lunch in Melbourne yesterday said that the challenge was far harder than he had expected.

“I said it would be a long journey, and the last year has only suggested to me it will harder and substantially longer than I anticipated. (But) if an oligopoly blindly charges on, ignorant of its broader obligations to the community and all those stakeholders, it invites far greater intervention than would otherwise be the case.” Mr. Clyne said

Since Mr. Clyne assumed the top job at NAB, the lender has cut the extremely unpopular dishonour fees and last December it capped its rate hike in line with that of the central bank, despite many rivals raising rates in excess of the hike undertaken by the RBA.

The NAB chief said the financial services industry had shifted dramatically in the wake of the financial crisis, but it was only “halfway through the second quarter”.

NAB expects further regulatory pressure and for Australians to react to the way customers were treated by their banks during the height of the crisis to change the industry further. Mr. Clyne says he believes that the ultimate winners of the battle for hearts and minds would not be known for many years.

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