Opening statement to Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell

Statement delivered by Executive General Manager Business Direct and Small Business, Leigh O’Neill

How we might support small business, both banks and government, is a critical conversation impacting thousands of business owners, their employees and their families, our cultural diversity and our nation’s economic strength.

National Australia Bank welcomes the opportunity to attend today’s hearing and join the important discussion we will have on the active role banks can play in supporting and advocating for small businesses.  It is not without merit that small business is often named as the driving force of our economy – the sector being critical to the success of our nation – and it is our belief that government and the financial sector working together to support small business will bring with it the best outcomes.

Listening to our customers; small business owners, their employees and their investors is something that the NAB believes is critical to successful ongoing relationships with this significant group.  Continuous improvement should be at the forefront of any business, and banking is no exception.  Every year we invest time and resources to focus on improvement.

NAB has over 350 small business bankers in 250 locations around Australia who are meeting with customers every day.

Having listened to those customers’ needs and aspirations, we take action to deliver to these and fulfil our purpose for small business; to empower our customers to build successful and sustainable businesses, and driver a prosperous Australia.

For we know from listening to our customers that success is different for every small business owner, and that whilst sustaining success can be a challenge, it is one that brings with it the great reward.

There are many important issues that have been identified for discussion today, and at NAB we believe we must continue to address an ever changing environment which can at times makes running a small business more complex than is desirable.

Banking has for centuries connected those who need credit with those who seek a safe place to invest.  NAB recognises that the early function of extending credit to small business is vitally important; however, our responsibility to our customers, our employees and our shareholders does not end there.

We make no underestimation of the significance of this role of credit provider, however we view this as only part of the broader relationship we seek with our customers.  We seek to truly understand our business customers, supporting them through the life of their business, delivering banking relationships through good times and the not so good times, through generations, economic cycles, business cycles and complex cultural landscapes.

NAB has earned its reputation for backing Australian business but every day we must continue to earn it. Our desire is to continually build on the important role we play in support for business and in turn the national economy.  As Australia’s biggest lender to businesses we empower individuals and businesses as they seek to create jobs, support families and generate wealth.   This is a responsibility we do not wear lightly.  Sometimes things go wrong – but our focus and commitment as a bank is that when we find issues or problems, we fix them, and we will continue to do that.

As custodians of our organisation, advocates for our Business Customers, and myself the daughter of a small business owner, Tim and I bring with us today the expectations and experience of NAB’s 150 year history.

It is with this in mind that I would like to turn to the main issue that the Inquiry will examine – Impaired customer loans.  At NAB such files are dealt with through an extensive and inclusive process where our customers are supported in alleviating any challenges that exist in meeting their responsibilities.

• Working constructively with our customers is NAB’s priority.  Early conversations in times of challenge are the best ones, and this support process should continually be considered for improvement and integration as the external landscape and our customers’ needs change.

• In NAB’s view, there is no commercial or economic justification for a financier to artificially accelerate a default. ‘Impairing’ a customer’s loan  through a ‘constructive default’, as defined by the PJC Inquiry, is not an action NAB supports.

• An important consideration in our discussions should be an aim and preference for whatever measures we agree upon, do not add further complexity to the bank customer relationship and importantly, aim to make the customer experience easy to navigate and without undue hassle as we seek to better protect their position.  Simplification for Small Business, ensuring business owners can focus on running their business, should be our mutual goal.

• We are committed to constructively engaging with this Inquiry – there is always time to learn more and consider improvements for the benefit of our customers.

Thank you.