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NAB SME business lending up in 3Q23

by Adrian Suljanovic11 minute read

The major bank has reported a lift in its small- to medium-sized business lending for the quarter ended 30 June 2023.

National Australia Bank (NAB) chief executive Ross McEwan stated the major bank has delivered a “sound 3Q23” result, with lending to small- to medium-sized enterprises (SMEs) rising by 4 per cent for the June 2023 quarter.

Additionally, Mr McEwan noted the major bank had chosen to maintain its “disciplined approach in the competitive Australian home lending market” with below system growth of 1 per cent.

“Our performance during these periods has benefited from the consistent and disciplined execution of our strategy, against a backdrop of higher interest rates but also slowing growth, inflationary pressures and elevated competition,” Mr McEwan said.

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Furthermore, NAB’s cash earnings before tax and credit impairment charges declined 5 per cent when compared with the 1H23 quarterly average. The major bank closed out the June 2023 quarter with unaudited cash earnings of $1.90 billion.

Mr McEwan acknowledged that the major bank knows the current economic environment is “challenging for our customers”.

“But pleasingly, most are proving resilient with only a modest deterioration in asset quality in 3Q23, Mr McEwan said.

“Consistent with our strategy, we are focused on keeping our customers and our bank safe and maintaining prudent risk and balance sheet settings.”

High fixed-rate client retention

Preceding this trading update, NAB head of strategic partnerships, broker distribution Nicole Triandos emphasised (on 10 August) the key role of brokers in supporting customers in navigating the fixed-rate cliff.

Ms Triandos said at the time that bank had retained approximately 85 per cent of customers whose fixed-rate loans matured this year, largely due to the robust performance of the broker channel.

The bank’s strategy of focusing on customer retention rather than the previously offered $2,000 refinance cashback incentive had also contributed to high retention rates.

Equipment financing up

NAB recently revealed that business financing for green equipment increased by 59 per cent (compared to January–March 2023) in the three months between April and June 2023.

The uptick reportedly came as businesses took advantage of government incentives to reduce their carbon footprints while upgrading their equipment.

According to NAB’s data, there has been large demand for energy-efficient agriculture equipment, with financing increasing by 226 per cent, followed by an increase in solar upgrades (129 per cent) and electric vehicles (32 per cent).

The data revealed South Australia as the top state leading growth in green equipment financing, up by 380 per cent, followed by NSW at 89 per cent, Tasmania at 58 per cent, and Western Australia at 33 per cent.

To learn how to capitalise on opportunities in SME lending, brokers are urged to attend the free SME Broker Bootcamp 2023. Speakers will unpack the business models brokers could use to service their clients, what lenders look for in an SME loan application, and how to craft a compelling credit proposal by bringing the client’s story to life. They will also teach brokers how to use simple financial tools and historical data to help their clients make informed business decisions.

The 2023 SME Broker Bootcamp will take place in the following locations:

  • Wednesday, 6 September: Rydges South Bank, Brisbane
  • Tuesday, 12 September: Montage, Sydney
  • Thursday, 14 September: Zinc, Melbourne

Places are limited for this free conference so book your place now by registering here.

For more information about the conference, including agenda and speakers, click here.

[RELATED: NAB retains 85% fixed-rate clients amid cliff]

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