Thursday 21 August 2008
National Australia Bank announced today that if the Reserve Bank of Australia (RBA) reduces the official cash rate by 0.25% at its September Board Meeting, NAB will reduce its standard variable interest rate by 0.25% to 9.36% per annum.
Ahmed Fahour, Executive Director and CEO Australia, said NAB had been reviewing the cost of wholesale funding closely and, based on current short term funding costs, the bank would be in a position to pass on a reduction in interest rates to its customers.
“While we continue to see volatility in international markets and increases in the average cost of long term funding, we have experienced some short term funding relief which we are keen to pass on to our customers,” Mr Fahour said.
“While I am pleased to make today’s undertaking, our medium and long term funding and our retail deposit base represent the greatest proportion of our funding costs and the average cost of these sources of funding continue to increase.
“The recent fall in short term funding costs provides an opportunity to undertake to move rates in line with the RBA decision but future interest rate decisions will need to reflect an assessment of all the cost of funding factors.
“All Australian banks are reliant on offshore funding and increases in the average cost of long term funding are likely to be with us for some time.
“Therefore any consideration that the Federal Government can give to enhance the attractiveness of retail bank deposits will help reduce overall funding costs and assist in lowering mortgages rates.”
Media Contacts: Luisa Ford NAB Corporate Affairs M: +61 (0) 411 024 104
Brandon Phillips NAB Group Corporate Affairs M: +61 (0) 419 369 058