NAB CEO on the economy, simplification, and the future of banking

  • Customers

NAB CEO Ross McEwan has expressed optimism about the state of the economy during a wide-ranging discussion at the ABA/TTBC Economic Forecast 2024 event, while also noting the need to reduce red tape to better support the growth of small businesses in Australia.

  • 26.02.2024
  • Time to read 1 min read
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NAB CEO Ross McEwan has expressed optimism about the state of the economy, while also noting the need to reduce red tape to better support the growth of small businesses in Australia.

In a wide-ranging discussion at the Australian Banking Association and Trans-Tasman Business Circle ‘Economic Forecast 2024’ event in Sydney, Mr McEwan said both the Australian and New Zealand economies had been resilient amid challenging conditions.

Read NAB CEO Ross McEwan’s full speech here

“The economies of both countries have stood up pretty well, and individuals have stood up, I think very well,” he said.

“Full employment helps. When you are running unemployment levels at 4, 4.1 per cent, those are amazingly good levels, which keeps money in people’s pockets and helps them manage to pay their mortgage.”

Mr McEwan said he remains optimistic the economy will improve by the end of 2024.

“We’ll see how the tax changes go and when interest rates start coming back,” he said.

“But [the economy] is very resilient and I think will continue to be. And we’ll be in okay shape the rest of the year.”

Supporting customers

Mr McEwan said he had been struck by just how resilient customers had been through the slower economic conditions.

“People want to be good with their money. You should never work from the base that people are trying to avoid paying – 99.9% are not,” he said.

“Our 30, 60, 90-day arrears have ticked up, and it showed through in our quarterly results this week. But the vast majority of our [arrears rates] are still below 2019 levels where we started.

“[Customers] are making decisions. They just need certainty and as soon as they get certainty, they get on with life.

“So I’ve been pleasantly surprised, but there’s still a way to go in the next 12 months to see how it all plays out.”

He thanked organisations providing support to people struggling to make ends meet.

“You talk to the Salvation Army and some of those amazing groups – they are desperate to help because [some people are] really struggling.”

With the recent boost to NAB Assist of an additional 700 colleagues, Mr McEwan said there was help available to customers who need it.

Simplification

Mr McEwan said urgent action should be taken to reduce red tape so businesses could operate more efficiently and effectively.

He said it was a significant issue across the banking sector, especially for smaller operators.

“We’ve got to be very careful, if we want these banks there, to make sure we don’t overburden them with the regulation and the requirements of running a bank, and the obligations of running a bank as well,” he said.

“Some of our smaller banks, that [we] sit around the table with, you can see their faces going ‘what now, I’m just trying to keep up with the last change you made that was pushed on us’.

“It’s a delicate situation of how much regulation do we push through to keep things in the right shape and do the right thing, and how much is it a real burden.”

Transformation of banking

Mr McEwan also discussed the changing landscape of banking and how cash circulation would change into the future, noting it was unlikely Australia would become a cashless society.

“Covid itself probably meant the use of cash has really gone down quite quickly, much faster than anybody anticipated,” he said.

“[And there] is a massive complexity in moving huge amounts of different notes and coinage, and there is nothing free about that.”

He said cash circulation was a top priority for the ABA and RBA – but that it required a collaborative approach.

“So there’s a whole lot of things that we do in the system that I think need to be worked through in a logical, sensible, unemotional way to get to a conclusion about how we distribute cash,” Mr McEwan said.

“What’s the cost? How does it all work? Who should pay? Because it’s not just banks [involved].”

“[We] need to be thinking long term on this, not short term. And that’s why I’m delighted about the work that Anna [Bligh] and the team are doing on this thinking long term on this, not just the next six months.”

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