NAB moves to aggressively hike mortgage rates

This is amusing stuff, at the AFR:

The decision by NAB chief executive Andrew Thorburn to stop chasing new business with aggressive discounts and to reward loyal customers has put the bank in uncharted territory after delivering a result that revealed further deterioration in its net interest margin.

…”The discount for the standard variable rate has continued to go up and up and up and up and so as the housing cycle has slowed that increases the pace and increases the intensity, it’s been a long-term trend and its got worse in the last two or three years,” Mr Thorburn said.

…NAB’s results however show the bank’s net interest margin – the difference between the rate at which it borrows and the rate at which it lends – fell to 1.84 per cent from 1.87 per cent in the first half and 1.88 per cent year on year.

That’s the most novel (presumably front book) mortgage rate hike that I can remember. RBA indicator mortgage rates suggests NAB could have as much as three rate hikes to play with (without ever hiking rates!):

BBSW suggests the need for more as the margin squeeze keeps getting worse the longer it doesn’t fall back to the cash rate:

NAB didn’t hike recently when others did so now it’s going to do it in secret.

Just another nail into the popping housing bubble.

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  1. Playing catch-up after being the only 1 of the Big 4 not to hike back in September.

    Still, W-T-F is up with Macquarie? Seems like they’re in a frenzy of dumpster diving.

    • Some Mac trader apparently bought a small block of BHP shares yesterday….. nearly 13 million shares @ about $1 above the market price……

    • They’ve gone all in with a pair of twos, hoping the rest will fold. In most other countries with a financial crisis, it’s SOP to package up all the toxic assets into a single entity, the “bad bank”, releasing the rest to carry on as usual.

      Maybe Macquarie can’t wait!

  2. BBSW are moving lower tough. Not enough, perhaps, but moving lower nevertheless. Can someone explain why is this happening. I thought BBSW would be jumping due increased risks for the banks as house prices keep falling and potential legal costs that are coming Banks’s way as a result of the banking commission’s exposure.

    • Ahahahhahah. Speaking of UBank- just checked them and they are STILL selling 3.59% mortgages.

      Where dem rate hikes? (Paging DaBo!)

      • Don’t worry Eggy, good things take time. If you want to make a few omelets you gotta smash a few eggs 🙂

      • What matters is how fast UBank is growing its mortgage book. If only blue chip borrowers are able to access that eye-catching rate then the advertised rate is irrelevant.

        In September, straya’s money supply growth rate was 0.7% i .e. close to flat-lining. That is what is relevant to the bubble right now. Nothing else.

        (For context, the money supply growth rate at the end of 2007 hit 25% before falling hard as the GFC took hold, -2.5% at the lows in early 2010).

  3. Just spoke with my lender Mortgage House, couldn’t help but ask about lending conditions, have they tightened up? He laughed, said they check all expenses and don’t want anyone on IO, unless substantial assets. This is now compounded by falling house prices.

  4. Sorry I’m a bit confused – is the implication that NAB is leaving back book rates unchanged for now but is removing the discount for new customers?