NAB Re-balances Mortgage Rates

NAB today has announced changes to its home loan fixed rates.

From today, NAB will decrease its 1 year Package Fixed Rate for Home Loans to a highly competitive rate of 3.89% per annum for owner occupiers. NAB will also decrease its 1 year Package Fixed Rate for Residential Investment Home Loans to 3.99% per annum.

Meanwhile, NAB’s 2, 3 and 4 year Package Fixed Rate for Home Loans will increase effective today, to 3.98%, 4.09%, and 4.59% per annum respectively; and 2, 3, 4 and 5 year Package Fixed Rate for Residential Investment Home Loans will change to 4.19%, 4.29%, 4.79%, and 4.79% per annum respectively.

“There are a range of factors that influence the funding that NAB – and all Australian banks – source, so we can provide home loans to our customers,” NAB Chief Operating Officer, Antony Cahill, said.

“The cost of providing our fixed rate home loans has increased over recent months.”

“We continue to watch market and economic conditions to ensure we continue to lend and manage our business responsibly, so we remain strong and stable for the benefit of our customers, shareholders, and the broader economy,” Mr Cahill said.

Today’s decision applies to new fixed rate home loans only. NAB continues to closely monitor the various factors that influence its Variable Rate for Home Loans (Standard Variable Rate) for owner occupier customers, which remains at 5.25% per annum at this time.

Mr Cahill said NAB’s fixed rate home loans remain highly competitive – especially with today’s new one year rates.

“We know that fixed rate home loans have become increasingly popular with our customers. We saw these applications more than double as a share of total applications in December, compared to in September last year,” Mr Cahill said.

Customers who want to have certainty about their monthly repayments should speak with their banker or broker to find out more about what’s available, and if a fixed rate home loan might be right for their circumstances. Conditions, fees and eligibility criteria apply to NAB’s products.

NAB will also change NAB Homeplus Fixed Indicator Rates, available through NAB Broker, as stated above.

 

Advertised Fixed Rates for NAB Tailored Home Loan (Choice Package)

Principal and Interest Interest Only
New Rate Old Rate New Rate Old Rate
1 year 3.89% p.a. 3.99% p.a. 3.89% p.a. 4.09% p.a.
2 years 3.98% p.a. 3.75% p.a. 3.98% p.a. 3.85% p.a.
3 years 4.09% p.a. 3.89% p.a. 4.09% p.a. 3.89% p.a.
4 years 4.59% p.a. 3.99% p.a. 4.59% p.a. 3.99% p.a.
5 years 4.59% p.a. 4.59% p.a. 4.59% p.a. 4.69% p.a.

 

Advertised Fixed Rates for NAB Tailored Home Loan (Choice Package) – Residential Investment

Principal and Interest Interest Only
New Rate Old Rate New Rate Old Rate
1 year 3.99% p.a. 4.14% p.a. 3.99% p.a. 4.24% p.a.
2 years 4.19% p.a. 3.90% p.a. 4.19% p.a. 4.00% p.a.
3 years 4.29% p.a. 3.89% p.a. 4.29% p.a. 3.89% p.a.
4 years 4.79% p.a. 3.99% p.a. 4.79% p.a. 3.99% p.a.
5 years 4.79% p.a.

 

Only One In Four Australians Has a Financial Plan

One in two Australians don’t believe they’re doing enough to reach their wealth goals according to new research from MLC, but a boost in confidence and a financial plan may be the key to helping Aussies get on track. However only 1 in 4 had a financial plan within the last 5 years.

The latest MLC Wealth Sentiment Survey released today for the first time identifies the reasons why Australians believe they may not have done enough to reach their goals, finding that self-doubt ranks second to not earning enough money (50% compared with 32%). These two factors were nominated by respondents as more significant than being scared of risk or even spending more than they earn.

Lara Bourguignon, General Manager, Corporate Super, NAB, says the research captures the strong link between confidence and achieving financial goals.

“We often think that getting where we want to go with our money hinges on how much we earn, but self-doubt appears to be a major factor. If we doubt our abilities with our money, it makes sense that we would struggle to achieve our goals.”

Closely tied to the lagging confidence of Australians is the considerable number who do not have a plan to save and invest. Only one in four respondents reported having a financial plan, which MLC says may be a key reason many lack confidence in dealing with money and investments.

“The research highlights an important connection between planning and confidence in reaching financial goals. With so few people having a financial plan, we perhaps shouldn’t be surprised that Australians doubt themselves and don’t believe they have done enough to reach their wealth goals. Having a financial plan is crucial to feeling empowered and getting where you want to go with your money,” said Ms Bourguignon.

For the first time, the survey has also asked Australians to define “wealth”. On average, 33 per cent reported their definition as income, 29 per cent lifestyle wealth, and 24 per cent net worth. The most important aspects of lifestyle wealth were being debt free, having enough for emergencies, and being able to fund our desired lifestyles.

The MLC Wealth Sentiment Survey also identified that while a majority of Australians report a significant shortfall between their anticipated financial needs at retirement and their expected savings and investments, most do not factor their primary residence in calculating their wealth. If Australians included the family home in their wealth, most would have enough once they left the workforce. Despite this, only 11 per cent reported that they planned to sell the family home to fund their retirement.

MLC Quarter 3 Wealth Sentiment Survey – key findings:

    • One in two Australians don’t believe they have done enough to reach their wealth goals
    • The top reasons nominated are insufficient income and self-doubt
    • Australians on average estimate they will need about $818,000 in savings and investments to retire, but expect to retire with only $557,000 (excludes home equity), an average shortfall of $261,000
    • Women face a bigger retirement shortfall than men: $297,000 compared with $226,000
    • If Australians included the equity in their homes, they would have an additional $442,000 in wealth available for retirement
    • Only 11 per cent of respondents say they will sell their homes to fund retirement
    • Four in ten respondents said they can achieve their desired lifestyle on less than $100,000 per year

The MLC Quarterly Australian Wealth Sentiment Survey interviews more than 2,000 people each quarter. It aims to assess the investment environment by asking questions related to current financial situation, investment intentions, level of concern related to superannuation and other investments, change in life insurance, and distance to retirement and investment strategy.

ASIC accepts enforceable undertaking from NAB and CBA to address inadequacies within their wholesale spot FX businesses

ASIC says it has today accepted enforceable undertakings (EUs) from each of the National Australia Bank Limited (NAB) and the Commonwealth Bank of Australia (CBA) in relation to the banks’ wholesale spot foreign exchange (FX) businesses.

As a result of ASIC’s investigation, ASIC is concerned that between 1 January 2008 and 30 June 2013, both banks failed to ensure that their systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by ASIC.

ASIC Commissioner Cathie Armour said, ‘A well-functioning foreign exchange market depends on all participants acting with integrity and fairness. ASIC is committed to ensuring that major financial institutions have in place effective mechanisms for ensuring that their employees are trained, monitored and supervised to provide financial services efficiently, honestly and fairly.’

NAB

ASIC identified the following conduct by employees of NAB between 1 January 2008 and 30 June 2013:

  • on several occasions, a NAB employee on an offshore spot FX desk, acting together with an employee of another Australian bank, shared confidential information and entered offers into the trading platform without any apparent legitimate commercial reason for placing the offers;
  • on a number of occasions, NAB employees disclosed specific confidential details of pending client orders to external market participants, including identification of the client through the use of code names; and
  • on several occasions, NAB employees on an offshore spot FX desk inappropriately exchanged confidential and potentially material information about the bank’s client flow or proprietary positions.

ASIC is concerned that NAB did not ensure that its systems, controls and supervision were adequate to prevent, detect and respond to such conduct, which had the potential to undermine confidence in the proper functioning of the market.

Under the EU, NAB will develop a program of changes to its existing systems, controls, monitoring and supervision of employees within its foreign exchange business to prevent, detect and respond to, amongst others, the following types of conduct:

  1. attempts to manipulate the market for a currency, including by placing offers without a legitimate commercial reason and attempts to influence benchmark rates;
  2. inappropriate trading while in possession of confidential and potentially material information; and
  3. disclosures of client confidential information.

The program and its implementation will be assessed by an independent consultant appointed by ASIC.

Upon implementation of that program, for a period of three years, NAB will provide to ASIC an annual attestation from its senior executives that the systems and controls in its spot FX business are appropriate and adequate to effectively prevent, detect and respond to specified conduct. The program will also be subject to annual internal reviews and assessment by the independent consultant for a period of three years.

NAB will also make a community benefit payment of $2.5 million towards advancing financial literacy education related to the aged care sector and the promotion of ethical behaviour in Australian financial markets.

CBA

ASIC identified the following conduct by employees of CBA between 1 January 2008 and 30 June 2013:

  • on two occasions, CBA employees on an offshore spot FX desk acquired proprietary positions in a currency after coming into possession of knowledge of large CBA fix orders in that currency;
  • on at least two occasions, CBA employees traded in a manner that may have been intended to cause the trigger price for a stop loss order to trade when it might not have traded at that time; and
  • on a number of occasions, CBA employees on an offshore spot FX desk disclosed confidential details of pending client orders to external third parties, including identification of the client through the use of code names.

ASIC is concerned that CBA did not ensure that its systems, controls and supervision were effective in relation to such conduct by its employees. Such conduct had the potential to undermine confidence in the proper functioning of the market.

Under the EU, CBA will develop a program of changes to its existing systems, controls, monitoring and supervision relating to the management of fix orders, management of stop loss orders, and external communications containing specific confidential information to address such conduct. The program will incorporate changes already made by CBA as part of an existing review of its Global FX business.

The program and its implementation will be assessed by an independent consultant appointed by ASIC. Upon implementation of the program, CBA will also provide ASIC with an annual attestation from a senior executive, for a period of three years, that the systems and controls in its spot FX business are appropriate and adequate to effectively manage specified conduct risks.

CBA will also make a community benefit payment of $2.5 million towards advancing financial literacy education related to the aged care sector.

ASIC encourages market participants to adhere to high standards of market practice, including those set out in the Global Code of Conduct for the Foreign Exchange Market, published by the Bank of International Settlements (BIS Global FX Code). The BIS Global FX Code provides a global set of good practice guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. Phase 1 of the Code was published in May 2016, and Phase 2 is due for publication in May 2017.

ASIC is grateful for the assistance of our international regulatory counterparts in progressing our investigation, including the UK Financial Conduct Authority and the NZ Financial Markets Authority.

Background

The wholesale spot FX market is an important financial market for Australia. It facilitates the exchange of one currency for another and thus allows market participants to buy and sell foreign currencies. As part of their spot FX businesses, both banks entered into different types of spot FX agreements with their clients, including Australian clients.

Spot foreign exchange refers to foreign exchange contracts involving the exchange of two currencies at a price (exchange rate) agreed on a date (the trade data), and which are usually settled two business days from the trade date.

NAB Says Up To 60,000 Migrant Bank Customer Details Emailed In Error

In a statement released by NAB Executive General Manager International Branches Peter Coad, he advises that NAB has written to customers who migrated to Australia, regarding accounts they established through the bank’s migrant banking team while they resided overseas.

In this letter, NAB notified these customers that an email confirming their account had been established was also sent in error to an incorrect email address.

This error does not impact customers who set up an account in Australia.

Our number one priority was to notify our customers.

The email included customer information such as a name, address, email address, BSB and account number and in some cases NAB identification number – but it did not include any passwords.

We take the privacy and the protection of our customers’ personal information extremely seriously.

We also take full responsibility and we sincerely apologise to our customers for this mistake.

The error was caused by human error and identified following our own internal checks and as soon as we realised what had happened we took action.

We have reviewed these customers’ accounts, over and above our rigorous normal checks, and have not identified any unusual activity.  We will continue to monitor 24/7 to protect our customers’ accounts.

We are reaching out to approximately 60,000 migrant banking customers to notify them about this error.

Approximately 40 per cent of these customers have either closed or have not used their account this year.

Furthermore, 19,000 of these accounts have a balance of less than $2.

We have also notified and are working with industry regulators, including the Office of the Australian Information Commissioner and ASIC.

We do not consider that customers need to take any action with their account.

Advantedge to increase rates for variable loans

Advantedge Financial Services (Advantedge) is increasing its interest rates for all variable rate loans by 0.10% per annum.

The new rates will apply to all of Advantedge’s white label partners, and will come into effect from Tuesday 24 January 2017.

Brett Halliwell, General Manager of Advantedge, said Advantedge remains committed to providing aggregators and brokers with the best possible products in Australia’s dynamic home loan market.

“Our white label products are simple, high-value and flexible, and continue to be highly competitive. This rate change is needed due to the challenging economic environment, increased regulatory requirements, and financial market conditions that we, and all lenders, are facing,” Mr Halliwell said.

Advantedge is part of the National Australia Bank Group (NAB) and is Australia’s leading wholesale funder and distributor of white-label home loans.  

Advantedge supports mortgage brokers and mortgage managers with end-to-end loan processing and administration support. From pre- to post-settlement stages, Advantedge also gives brokers access to a personalised lending team that prides itself on excellent service.

White label loans are an alternative to major bank loans, designed to give customers the essential home loan features they need, at competitive rates. Through Advantedge customers have access to simple, quality home loans that’s easy to manage and offers value.

White-label home loans are available through just over 85% of Australia’s mortgage brokers, and distributed under the brands of mortgage aggregators and mortgage managers. Those mortgage aggregators include PLAN Australia, FAST, Choice Aggregation Services, Australian Finance Group, Connective, Smartline, Astute, Loan Market and LJ Hooker Home Loans

NAB to launch API Developer Portal

National Australia Bank (NAB) says it will become the first major Australian bank to launch an Application Programming Interface (API) Developer Portal as part of its commitment to improving customer experiences through collaboration.

The portal, which will go live before Christmas, will make selected NAB APIs publicly available to allow third party developers to connect to select sets of NAB data.

The developer portal will begin as a closed beta with NAB approving a small number of developers to take part in the initial concept, before running an open beta more broadly early next year.

The platform will start with two NAB APIs which will host data relating to NAB branch and ATM locations and NAB foreign exchange rates.

Developers approved to take part in the beta will be able to plug into the NAB data for testing and possible integration to their own systems (websites or mobile apps, etc).

NAB Chief Operating Officer Antony Cahill said: “We have invested in our technology and built a rich source of APIs that we have been using for both internal purposes and external partnerships to leverage capabilities and deliver better experiences for our customers.

“With the rise of the digital age and evolving customer expectations, APIs have become core to banking infrastructure to enable rapid deployment of various functions across multiple channels to meet those customer needs and quickly keep pace as those needs evolve.

“Our API strategy is based on three key streams of customer enablement, partnership arrangements and open API categorisation which this portal will be an integral part of.

“We are collaborating with a number of partners to both provide and receive data leveraging API technology including Xero, MYOB and VISA. We want to keep building our ecosystem with likeminded organisations to allow us opportunities to innovate and improve our experiences for customers,” he said.

NAB started using API technology in 2013 with the NAB Flik product (now Pay to Mobile in the new NAB mobile banking app) and has continued to evolve, with the new mobile banking platform rebuilt on our strategic API architecture and the establishment of numerous partnerships to both provide and receive data using APIs.

What is an API?

Application Programming Interfaces (API), allow the exposure of new and existing functionality from core systems within organisations. This in turn enables others (internal or external – depending on access) to place these features in their websites or mobile apps.

How does the NAB Developer Portal (closed beta) work?

NAB will provide two sets of open API data (branch and ATM locations and FX rates). For the closed beta, NAB will approve a small handful of developers to test and learn with, before opening the beta to further third parties early in the New Year. All participants will be vetted by NAB to meet our security standards.

Business Conditions Decline – NAB

The November NAB Monthly Business Survey gave more hints of a moderation in the non-mining economic recovery.

Business conditions slid further in the month, dropping back to long-run average levels for the first time since April 2015 – largely driven by profitability and trading conditions (sales), as employment conditions were steady at already subdued levels.

However, in spite of the declining trend in business conditions, business confidence has remained relatively resilient, tracking broadly sideways in recent times and showing a modest improvement in November. For the month of November, the business conditions index dropped 2 points, to +5 index points, which is in line with the series long-run average. The retail industry continues to be a major drag on conditions, despite signs of improved retail sales recently, and now has the equal worst business conditions (along with mining). Inflation measures in the Survey remained subdued, with retail price growth remaining flat – despite notable increases in upstream retail costs.

In the context of numerous global uncertainties and weakening business conditions, the resilience of business confidence has been encouraging. With that said, it is not clear what effect (if any) the recent US election result has had on confidence. The business confidence index rose 1 point, to +5 index points in November – although this is slightly below the series long-run average (+6). But while confidence has been relatively resilient, it is not at levels conducive of higher levels of investment activity – confirmed by disappointingly soft investment intentions in the recent ABS Capex Survey. Nonetheless, the capex measure in the NAB Business Survey remained positive this month, consistent with an increase in capacity utilisation rates, although forward orders remained soft.

New Banking Model For Latrobe Valley

Nab says Latrobe Valley residents will for the first time have access to a unique model of financial services – with plans for Victoria’s fourth Good Money store to open in Morwell next year.

A partnership between the Victorian Government, Good Shepherd Microfinance and the National Australia Bank (NAB), Good Money stores offer responsible financial products and services including no interest and low interest loans, financial counselling and affordable insurance.

The Minister for Families and Children, the Honourable Jenny Mikakos MP, said that the Latrobe Valley Good Money store would also be the first to offer in-house financial counselling services.

“We’re working to make sure that local people have improved access to appropriate and affordable financial services and products now and into the future,” said Minister Mikakos.

“Importantly, this will be the first Good Money store in regional Victoria and it will have a financial counsellor on site providing free support, information and advocacy for people who are experiencing financial difficulty,” she said.

The Victorian Government is investing $2.9 million to establish and operate the store over four years. Good Money will initially provide services from the Latrobe Valley Authority site in Morwell until the store opens in May 2017.

Chief Executive Officer of Good Shepherd Microfinance, Adam Mooney, said that the Victorian Government investment in the new Good Money store was an important step in helping to secure the economic future of the Latrobe Valley.

“Over the coming years, Good Money will enable people in the Latrobe Valley to keep their cars on the road, meet the costs associated with education and retraining, and afford the things that keep families running like washing machines and fridges,” said Mr Mooney.

“There is high demand for safe, fair and affordable finance options in many parts of regional Victoria and we’re delighted to open a Good Money store here in Morwell. This store will provide valuable services to individuals and families who are excluded from mainstream finance in the Latrobe Valley region,” said Mr Mooney.

NAB General Manager of Retail (Victoria), Mary Scoutas, said the announcement is part of NAB and Good Shepherd Microfinance’s joint commitment to provide more than one million people on low incomes with access to fair and affordable finance by 2018.

“We know there is a real need for initiatives such as this within the community to help build resilience and reduce the risk of falling into a situation of long-term financial hardship,” said Ms Scoutas.

“The Latrobe Valley Good Money store meets the evolving needs of the local community, extends the Good Money franchise to regional Victoria for the first time and builds on our growing network of stores, with three in Melbourne, one in South Australia and another two set to open in Queensland next year.”

The products and services offered through Good Money include:

  • No Interest Loan Scheme (NILS) – Loans of between $300 and $1,200 for essential goods and services, including educations costs and equipment needed for training.
  • StepUP Loan – Loans of between $800 and $3,000, typically used for car related expenses, that keep people on the road and enable them to get to work, get the kids to school and stay engaged with their community.
  • Affordable insurance – simple car and contents insurance with flexible payment options.
  • Financial counselling – free, confidential and independent debt management and budgeting advice.

The partnership between Good Shepherd Microfinance and NAB has reached almost half a million people in Australia with no and low interest loans since 2005.

Background

The Victorian Government provides operational funding for three Good Money community finance stores in Collingwood, Dandenong and Geelong, with microfinance loan capital provided by NAB. In 2015 Good Money expanded to South Australia and, in 2017, two stores will open in the Queensland. Good Money is a three-way partnership between Good Shepherd Microfinance, NAB and state governments.

NAB Responds to 7:30 Segment On Commission Driven Product Sales

Bob Melrose, Executive General Manager, NAB Retail, provided this statement on behalf of NAB to the ABC’s 7.30 program

nab-pic

“At NAB we aim to become Australia and New Zealand’s most respected bank. We will get there by putting the customer at the heart of everything we do, and holding all of our people to high standards for ethical conduct.

We are unable to comment in detail on our former NAB employee – however we can confirm that she ultimately resigned from NAB.

We stand by our fair performance management processes.

Regarding NAB’s approach to product based sales and commissions, customer-facing employees in our branches provide help and guidance to identify ways in which we can help our customers meet their goals. Our people are trained on our product features and benefits, to help identify which products can help meet our customers’ individual needs.

But we know more needs to be done on the critical area of product sales commissions and product-based payments. NAB fully supports the review of product based payments and product sales commissions being conducted by Stephen Sedgwick on behalf of the ABA, and we intend to implement the findings of this review.

This year we have also moved away from performance-based, fixed pay increases for customer service and support staff. They will now receive a standard pay rise of 3% per year, under our 2016 NAB Enterprise Agreement – negotiated with the Finance Sector Union.

Safeguards are also in place to ensure we all meet rigorous conduct and compliance standards.

At NAB everyone has a balanced scorecard which includes both financial and non-financial objectives. Performance at NAB is equally balanced against what is achieved based on the scorecard as well as how our people demonstrate NAB’s values and their behaviour.

At NAB we are committed to providing our customers with the right products, the right services and the right advice.”

NAB residential investor home loan variable interest rates to change

NAB has said it will increase its variable rates on new and existing residential investor home loans by 0.15% per annum, effective from Monday 12 December 2016.

nab-pic

This will mean NAB’s Variable Rate for Residential Investment Home Loans will be 5.55% per annum.

There is no change to NAB’s Variable Rate for Home Loans (Standard Variable Rate) for owner occupier customers, which remains at 5.25% p.a.

NAB Chief Operating Officer, Antony Cahill, said NAB takes a disciplined approach to managing its entire portfolio, and needs to make adjustments to ensure it continues to lend responsibly and sustainably to all customers.

“We don’t make these decisions lightly, and these changes reflect the increasingly challenging environment we are currently operating in as we seek to meet the needs of all our customers and our shareholders,” Mr Cahill said.

“As was evident during the recent bank reporting season, net interest margins – the difference between what we pay to borrow funds to lend to our customers and what our customers pay – are down, particularly in home lending, and they remain under pressure.

“A low-rate environment poses considerable challenges to all lenders, and we must respond to what is happening in the economy and the market. In doing so, we have to consider a range of factors including the ongoing need to hold longer-term stable sources of funding, continued elevated funding costs, regulatory requirements, and the competitive pressures at play.

“We will continue to regularly review our products and pricing, and make decisions that enable us to achieve a balance for all stakeholders – borrowers wanting to buy a home or grow their business, depositors and investors seeking a return on their investment, and our shareholders who rely on our dividends.”

Earlier this year, NAB made changes to the way it prices its home loans based on loan purpose and repayment type.

“We can now be more specific in how we manage our entire home lending portfolio in line with economic conditions and regulatory requirements,” Mr Cahill said.

He said the investor segment continues to be important to NAB, and interest rates for all home buyers are around their lowest levels in more than 50 years.

“NAB is committed to providing customers with great value and service, and home loan products that suit their needs at a competitive price,” Mr Cahill said.

NAB continues to offer highly competitive fixed rate terms, and borrowers seeking certainty about their repayments may want to consider fixing part or all of their home loan.

“Switching to a fixed rate loan is a straightforward and easy process, and I encourage borrowers to speak with their banker or broker to find out more about what’s available, and if a fixed rate home loan might be right for their circumstances.

“We’re here to help our customers as they make choices about which product may best suit their needs,” Mr Cahill said.

Conditions, fees and eligibility criteria apply to NAB’s products. Customers who want to know more about these changes are encouraged to contact their banker about what works best for them.