NAB CEO Opening Statement to the House of Representatives Standing Committee on Economics
Thank you Chair, and good afternoon everyone.
Thank you for the invitation to appear for the first time since I became CEO. I am pleased to introduce our Chief Risk Officer, Shaun Dooley who is here with me today.
With Australians and businesses across our country suffering, the scrutiny provided by this committee has never been more important.
Our bank exists to serve customers well and help our communities prosper. That means it is our job to step up and support them through this crisis. How we treat our customers will define how they think of us for years to come.
In my experience leading the Royal Bank of Scotland after the GFC, what matters most in a time like this is acting decisively and working together.
The measures put in place by government to protect lives and support both income and cash flow – such as JobKeeper, JobSeeker, the SME loan guarantee and instant asset write-offs – have been vital.
This has meant that while the impact on lives and livelihoods has been devastating, overall Australia is handling this virus better than most other developed countries, both in economic and in health terms.
Together, we need to keep doing what we can to get through this while giving Australia every opportunity to emerge as a stronger global player on the other side.
National Australia Bank will continue to be an active partner in this effort and advocate for new ideas that can help our customers.
For a sustainable recovery, it is important that we make a gradual shift from support to stimulus. Australia needs a national plan for living with the virus. We all need this certainty.
This will come from a nationally agreed approach to reopening the domestic economy and getting our borders open – and keeping them open. Without this certainty we risk wasting the support provided so far and further crushing business confidence.
I see five further actions we can take now to strengthen our economy and I know the Government has a number of these on its agenda.
Firstly, bringing forward already-legislated tax cuts in the Budget will get cash back in the hands of households and businesses.
Secondly, accelerating infrastructure spending in both construction and digital projects will create jobs.
Thirdly, streamlining approvals for residential construction and providing consistent rules and regulations across states will speed up growth.
Fourthly, cutting complexity for small businesses will make it easier for them to employ and pay people.
And last, planning for the return of skilled migration and international students which is critical for growth.
While we focus on what we must do now, this crisis presents the opportunity to rebuild a stronger, more competitive Australia through practical reform.
This means greater investment in our digital economy.
It means energising manufacturing across the country, particularly in high-potential sectors like medical technology, defence, agriculture and clean energy.
And it means targeting our investment in skills, education and research. This is how we will get our share of jobs for the future.
The responsibility for this is not just on government. Businesses like NAB must step up, and we will.
As Australia’s largest business bank, it is our responsibility to keep lending and supporting our customers. Every month through this crisis we’ve provided about $2.4 billion to businesses small and large, and we stand ready to do more.
We will live up to our responsibilities to our customers, many of whom have seen their incomes disappear overnight. The empty shops I see on my nightly walk before curfew in suburban Melbourne sadly illustrate that.
To help them, we have deferred repayments on 77,000 home loan accounts and 37,000 business loan accounts. Since June our bankers have been doing check-in conversations with almost 40,000 homeowners on deferrals and pleasingly 15% have chosen to start paying down their loans again.
For those continuing to need assistance we are helping in many ways, from further deferral to going interest only.
At the same time, we will sometimes need to make the hard but right decisions. Lending more money to customers who have little chance of repaying it will cause more harm in the long term. I saw this in the UK and it was an important lesson from other customer cases this committee is aware of.
I am acutely aware that these customers may approach their Member of Parliament questioning our decisions not to lend.
Even though looking after customers will at times mean saying no, we will be compassionate when dealing with something as painful as selling a home or closing a business.
How we run our bank is evolving to support more people who are hurting financially. Nowhere is this more evident than in our growing hardship teams. We’re creating hundreds more jobs where our customers need them.
Our 34,000 colleagues are adapting quickly and I could not be more proud of how they have supported customers while facing significant challenges themselves.
We continue to learn from the Royal Commission and are focussing on building a culture that gets the basics right and earning back the trust of our customers and community. This is why I am investing in the education of our colleagues and raising the bar of professionalism in our industry.
We know what we must do and we’re getting on with it. This situation is not permanent. I am optimistic for the future and I am determined to work together with you and your colleagues to achieve a clear plan that delivers the best outcome for Australians.
I welcome any questions you have.