NAB and CBA have a go at switching lenders competition
Home owners and home buyers seem unmoved by the NAB and CBA bank offers to pay lenders to switch from their lending competitors to their home loans.
The Big Bank Rate War rolls on
Australia's banks have had a tongue lashing from all sides of politics over the past few months, and that gave NAB an idea.Playing "good bank, bad bank", and saying that they had parted company with the likes of Westpac and the Commonwealth Bank of Australia [CBA].
The Big Four has lost creditability with the Australian public, and some market share as people thought they could do better elsewhere.
But Australia's big four banks are so far ahead of the thundering herd of home loan lenders, particularly Westpac and the CBA, that they can take the heat all the way to the bank, so to speak.
The Nab and CBA profits are sky high records and the Westpac dividends are the best of Banks anywhere in the world at over 8%.
The Big Four Banks are now seen as not only too big to fail, but too powerful to be pushed around by the Government or opposition.
Westpac and the CBA have a mortgage on Australia's mortgage business.
So we had the “Soapie” like drama unfold as Nab and the CBA thrashed it out for creditability and belief from an increasing disbelieving mortgage borrowers.
We will pay you to switch and lower interest rates are unconvincing because people know that banks manipulate interest rates when it suits them. They also know banks treat them like milking cows for the investors, so are starting to look for other options.
Bank Show down or showpiece?
The end result looks like petering out into a stalemate between the NAB and the CBA.Westpac can afford not to play but try to hold onto its client base which fell under the spell of the Banana Smoothie pitch, and those poor sods are paying over the top mortgage rates because they won’t shift their home loans.
The CBA offer of up to $1200 in cash to NAB customers looking to switch loans, was a move seen by most as a threat to NAB to stop rocking the boat. The communication was seen as not genuine by borrowers, just a bit of bullying by CBA.
In a recent survey a quarter of active mortgage shoppers did not know there was a price war. I am in the business and I forgotten about it myself. Hardly gripping stuff.
We haven’t seen much from the ANZ lately, so they may be playing a stealth game.
