NAB CEO Ross McEwan spoke with the ABC’s Peter Ryan about the support the bank is providing to customers. Below is a transcript of the interview.
Thursday, 22 July 2021.
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FRANK KELLY: Well, with lockdowns in New South Wales, Victoria and South Australia, a lot of us are worried about our futures. So, it’s no surprise that the National Australia Bank’s Consumer Stress Index, out this morning, shows people are struggling to pay their rent or mortgage, while others are anxious about funding their retirement nest eggs. NAB chief executive Ross McEwan says a faster vaccination rollout is the only way to avoid more economically damaging lockdowns. He’s speaking with senior business correspondence Peter Ryan.
ROSS McEWAN: Well, certainly as the lockdowns go longer, we are starting to see more customers ringing in, looking for assistance. Last week, for example, it was about 10 per cent. This week the volume is up at about 40 per cent. So, the longer the lockdowns go, obviously the more people it impacts, and their financial buffers start to get hit.
PETER RYAN: When distressed customers are calling in, what are they telling your staff about the difficulties that they’re having during the lockdown?
ROSS McEWAN: Well, the biggest thing they’re worried about is their ability to pay, particularly their mortgage or even things like their credit cards or personal loans and if it is a business, you know, “I need some buffers to get myself and my staff through this.” So, these are the calls that we’re taking and able to help customers get their – find their way through this. And the piece that’s really important to remember is it’s not their fault.
PETER RYAN: How much pain is being felt, though, by low-income groups who rent their homes, rather than own them and live from paycheck to paycheck and probably don’t have the financial buffers that other customers might have?
ROSS McEWAN: Let’s be quite clear. This hurts. That’s why we want people to call us early so that we can intervene with them and put in place some sort of arrangements.
PETER RYAN: Like many other major banks, you’ve reinstated loan repayment deferrals because of the lockdown. Are you now bracing for defaults that might see people lose their homes or businesses if they can’t get back to work and the lockdowns continue?
ROSS McEWAN: Look, we’ve had no foreclosures of a single homeowner impacted by COVID over the last what’s been 14 months. Our intention is to keep homeowners in their homes as much as we possibly can and work with them, and we want to get people through this. I go back to my earlier comments: this is not their fault.
PETER RYAN: But in the end, you’re a bank and you need to make money, so how long can you hold back from foreclosing mortgages?
ROSS McEWAN: There will be some situations where customers, it’s the best thing for them to do to put the house on the market if they themselves don’t see themselves getting back into employment for a long period of time.
PETER RYAN: Just to the vaccine rollout, how critical is it to now get those vaccines rolled out faster, given what we’re seeing with the spread of the Delta variant?
ROSS McEWAN: This is now the way the country gets out of this COVID situation; getting people vaccinated gets us back to the freedoms that we had pre-COVID and it does come down to getting as many people vaccinated as quickly as possible. It is the answer to getting back to what will be normal life after COVID.
PETER RYAN: The Prime Minister’s been copping a lot of criticism over the slow vaccine rollout and confusion over who should get the AstraZeneca vaccine and who shouldn’t. Does he need to lift his game?
ROSS McEWAN: Well, I think it’s around supply, which is the biggest issue. We’ve got to get more supply and we’re hearing that the government has secured more supply coming in at one million cases per week now, which would be fantastic, but really it needs us all to get out and once these supplies are there, roll our sleeves up and have our vaccinations.
PETER RYAN: So, have you had your vaccination?
ROSS McEWAN: I’ve had my first one. In the next two weeks, I’ll get my second one and I’m encouraging every staff member as soon as they’re available to have it, let’s get on and get it done so we can get back to normality.
PETER RYAN: Are we at a critical point that without wider and greater vaccinations, there will be more lockdowns and we’ll remain hostage?
ROSS McEWAN: Look, I think we’re seeing that right now. Because we don’t have a vaccination rate, you know, up in the sort of 80s or 90s, we’re having to close down with this latest variant and close down very severely, but we’ve got to get the vaccinations before we can move to the next stage, which is less of these lockdowns.
PETER RYAN: Of course, it’s all in hindsight, but should the New South Wales Premier Gladys Berejiklian have acted harder and much earlier, putting a ring-fence around Sydney’s eastern suburbs given the spread we’re seeing now?
ROSS McEWAN: I think if we look at New South Wales’s history, it’s been pretty good. This variant though is very rapid and New South Wales is having to be much more severe in its closedown than it would have intended I think originally.
PETER RYAN: There seems to be little doubt that the economic rebound will take a hit with a negative GDP in the September quarter, but how worried are you about the risk of a second GDP contraction and a possible double-dip recession?
ROSS McEWAN: We certainly look like we will be going back into negative territory but what we have seen after each of those lockdowns the opening-up does bring economic activity back very, very quickly. We’re still seeing unemployment at a very low level, 4.9 per cent; by the end of this year, we’ll be around 4.8. But that won’t be the case with more severe lockdowns.
FRAN KELLY: NAB chief executive Ross McEwan speaking with Peter Ryan.
You can also listen to the interview here on the ABC website.
You can read the NAB Consumer Sentiment Survey (Q2 2021) here.