Sign of the times

NAB has had a professional package for as long as I can remember – at least 20 years. However, it’s the first time ever that they have advertised this package on TV. The standard package has been pretty ordinary until 12 months ago when they brought it into line. This week they have reduced the competitiveness of the package. Before the change this week, the bank used to provide a 70 bpt discount if you borrowed more than $250k. Today, to get the same discount you need to borrow in excess of $500k. Clearly, the bank has advertised and subsequently realised how easy it is to get business in this post-CFG world (with 4 major’s controlling nearly 95% market share). Consequently, they have decided “we don’t need to provide these discounts”. To me, this is a sign of the “less competitive” times. It’s not a good sign. Home loan customers should brace themselves for more “non-competitiveness” ahead.