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Did the 'Big 4' just become the 'Big 3'?


It was a unexpected change in the 'big four' banks 'interest rate behaviour' today when NAB announced that it would not be joining the other majors in raising their interest rates.

It's a stunning move on a few levels:

  1. It gives its customers some breathing room

  2. It buys brownie points with customers, or potential customers, who may think less that NAB is a sheep along with the other big four banks when raising interest rates

  3. It buys good will in the market for potential customers

In a statement announcing NAB's decision today Andrew Thorburn NAB's Chief Executive said 'We are listening and acting differently. We need to rebuild the trust of our customers and by holding our NAB standard variable rate longer, we help our customers for longer.' Reading this we'd assume that it means a rate rise will come from NAB but that holding it off saves their customers some money for 'a time'.

Today's decision was reminiscent of NAB's Valentine's Day 2011 move to 'break up with the banks'. Over the span of a few days, NAB became the #1 most trending topic on Twitter across all of Australia and received 100,000+ visits to their break-up blog. (source below).

According to one article at the time, (source below) NAB said the campaign was to prove, 'they act and think different than other banks'. Although there were news stories and articles over the ensuing few months asserting that the campaign had no effect, later that year according to the Herald Sun (link below) 'The bank's controversial "Breaking Up'' campaign has begun to pay dividends, with the full-year net profit to the end of September 30 up 23.6 per cent to a record $5.2 billion'.

I suspect that this move is talking that same talk, but time will tell how effective this decision has been.

Sources; here, here, here and here

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