NAB CEO sees ‘more pain’ for households

Bloomberg

One of Australia’s largest banks is expecting further interest rate increases next year as consumers face price rises on “everything they touch.”
National Australia Bank (NAB) Chief Executive Officer Ross McEwan said while there’s currently no impact on loan arrears from surging inflation and higher borrowing costs in the country, 2023 will likely see that change.
“There’s going to be a little bit more pain,” McEwan said in a Bloomberg TV interview. Consumers are seeing “everything they touch is going up” in price. “At this stage people are able to absorb it, but that will become a little bit more difficult as we head into 2023.”
Australia’s economy is expected to slow next year as the central bank keeps tightening monetary policy to rein in inflation. National Australia says it’s been reaching out to customers with upcoming maturities on fixed-rate home loans in a bid to preemptively identify signs of stress in its mortgage book.
“We’ve been assessing which customers are likely to face the most stress” and in some cases National Australia has been making contact with households, he said. “At this stage generally people are saying look I’m ok, thank you.”
Business banking remains the firm’s key area of focus, though McEwan expects between a 3.5% and 4% expansion in this market next year, rather than the double-digit growth of the last few years, he said.
The lender reported a 22% profit increase in its business and private banking unit for the full year ended September 30. Corporate and institutional banking saw earnings expand 35%.