NAB has repriced home loans more than peers in the past year and its SVRs are now the highest of the majors, with a ~20bp premium on IPL. CBA’s SVRs are at the lower end of peers, but we think ANZ and WBC are likely to reprice next.
What’s theimpact of NAB’s repricing? NAB today announced it is repricing standard variable rates (SVRs) by 7bp on owner-occupier loans (OOL) and by 25bp on investment property loans (IPL). In last week’s COTW (refer Lower Housing Loan Growth), we showed that NAB’s housing loan book is 58% OOL and 42% IPL(other majors ~34-39%). Therefore, NAB’s weighted average repricing is ~15bp. Given we already assume ~5bp re-pricing in early 2H17E and another ~5bp at the end of thathalf year, profitupside from today’s moves could be ~1% annualised. However, we think the repricing is necessary to offset margin pressure evident in the latest reporting season and is likely to push NAB’s Australian loan growth below system.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
