Australia’s major lenders have signaled their intention to fight a protracted battle against the government’s plans to abolish fees charged to credit card borrowers who exceed their limit, and ban credit limit upgrades, and the government seeks greater regulatory oversight of the industry.
Three of the big four lenders, including NAB, Westpac and CBA are in the process of finalizing their formal submission to the government in which they all heavily criticize the proposal
Australian banking major CBA is facing a backlash from its mortgage borrowers, after the lenders satisfaction ratings took another dip during January.
CBA’s poor result is the latest in a series of losses by the big four lenders, who have seen their efforts at winning over their customers through the cutting of fees undermined.
Cameron Clyne, chief executive of Australian banking major National Australia Bank intends to deliver on his turnaround of the lender less than five years from his start as CEO, which began in January 2009.
“In many respects, timing (of the turnaround) is not under my control, so we have to just keep making each quarter better than the last. But we’d hope to see a response, certainly before five years.” Mr. Clyne said in an interview with The Australian.
Australian banking major Westpac has fired its first salvo in an emerging war in the market for home loans, after the lender launched an aggressive discount campaign on Tuesday as it seeks to win new customers and expand its market share in the face of more intense competition from rivals.
Australia’s second largest lender in the latest twist to an increasingly bitter battle for market share was responding to NAB’s revelation at the weekend, that it would pay the ext fees for CBA and Westpac borrowers who switch their mortgages to NAB.
Australian banking major ANZ, says it is cutting 45 jobs as part of a restructuring program which will see 20 back office and operational positions cut, with a further 25 positions in Australia, New Zealand and Bangalore also being affected.
“ANZ is completing a small restructure in its retail distribution area with about 20 back office and operational roles being made redundant,” said a spokesman for the bank.
Australian banking major National Australia Bank, which raised its interest rates by less than its big four rivals has managed to capitalize on that differential by increasing its mortgage lending market share, though as the expense of losing some of its deposits.
The Australian Prudential Regulation Authority (APRA) published December statistics earlier this week which showed that NAB has managed to capture some market share at the expense of its rivals with its “Fair Value” banking campaign.
The battle for deposits amongst Australian lenders seems to be petering out, with only two of the country’s top online savings accounts passing on November’s interest rate hike by the Reserve Bank of Australia, to their customers in full.
Despite failing to pass on the interest rate increase to depositors, bank’s continue to make the argument that higher funding costs are the reason behind higher interest rates which have been passed onto borrowers in excess of official rate hikes by the central bank.
Graeme Samuel who heads up the Australian Competition and Consumer Commission (ACCC) says that he would like to have prosecuted Mike Smith, chief executive of Australian banking major ANZ for what Mr. Samuel believes was price signalling that the lender engaged in 2009. Mr. Samuel says he was unable to do so because he did not have the required regulatory powers.
Mr. Samuel made his remarks whilst appearing before the Senate inquiry into competition within the banking industry, and noted that Australian banks and other businesses could engage in price signalling and co-ordination with “a wink and a nod” and without breaking the law.
A survey conducted which polled call centres of Australian banks found that as many as half of all staff are prepared to help individuals who call them access financial records belonging to someone else.
Global Research a customer experience research firm undertook the survey in November, calling the call centres of eight of Australia’s largest lenders including the big four banks.
2010 ended with intense debate over the level of competition within the Australian banking industry. Which critics argue is unhealthily dominated by the Big Four banking groups.
Despite the measures introduced by the government to stimulate competition and all the criticism, new data from the Australian Prudential and Regulatory Authority (APRA) suggests that in the post global financial crisis world, the position of the majors remains strong.