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NAB 'nabs rate high ground'

NAB 'nabs rate high ground'

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Date Published : Thursday, August 21, 2008

National Australia Bank (NAB) has become the first of the big four banks to promise it will pass on a 0.25 percentage point cut to customers, should the Reserve Bank of Australia (RBA) cut official rates, it has been reported.

NAB's Australian chief executive Ahmed Fahour has confirmed that the bank's standard variable interest rate would be cut if the RBA reduces the official rate next month.

"The recent fall in short-term funding costs provides an opportunity to undertake to move rates in line with the RBA decision, but future interest rate decisions will need to reflect an assessment of all the cost of funding factors," Mr Fahour said.

NAB's rival, CBA, claimed that it will consider funding costs "at the time of any announcement by the RBA" and will take into account any cut in the official rate by the RBA.

The bank said it would do its best "to pass on as much as we can to our customers" but refused to be drawn on its variable rates, the Australian reported.

Federal treasurer Wayne Swan stated that NAB's decision is "a challenge for other banks to follow" after eight interest rate rises in three years has made it tough for mortgage owners.

The Australian reported that should the RBA shave the official rate by 0.25 percentage points it would be the first time it has done so since December 2001.

NAB's personal finance portfolio includes credit cards; personal and car loans; everyday banking and savings; insurance and superannuation and investment and financial planning.

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