NAB chief moots bank mergers

The boss of Australia's largest bank has suggested that it should be allowed to merge with some of its rivals in a bid to stave off the threat of foreign ownership.

Currently, federal government rules regarding competition in the banking sector would block any mergers between the big four banks.

However, the chief executive of the National Australia Bank (NAB) has suggested those rules be scrapped if the banks in question are to remain in Australian hands.

At the moment, all of the four biggest banks - NAB, Commonwealth Bank, ANZ and Westpac - are fully Australian.

John Stewart though suggests that none of the four would be strong enough to stave off a takeover bid from a much larger foreign bank.

"The question is what's going to happen in the next five to ten years and I think we have to find a political solution," he said.

"That is a politically acceptable way to probably have a very strong or perhaps two or three very strong banks that can operate internationally."

The ABC reports that Mr Stewart also told a business luncheon in Sydney that the NAB is "unlikely" to move interest rates on its home loans and savings accounts if the Reserve Bank of Australia decides to increase rates again in the future.

Earlier this month, the Reserve Bank increased rates by 0.25 per cent to seven per cent - the highest it has been for over 12 years.

Mr Stewart added: "We're aware of the fact that there can be hardship caused by things like mortgages and that's why we're prepared not to pass all of it on right now."

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