It may seem surprising that Australia’s banks are not more bullish at present, given their need to present a case of strong future direction and growth to help secure support in volatile times. However, considering the backlash from the Royal Commission inquiry into financial misconduct, such feats are not so easy to pull off.

This has led to Anthony Healy, Head of National Australia Bank’s (NAB’s) business arm, to admit that he is ‘nervous’ about how his bank is going to generate additional credit, which goes against the typical bluster that many associate with bankers and their platitudes.

Such admissions seem to fly in the face of previous rhetoric and may well indicate that the banks are dealing with an uphill battle to rectify their public image. They damaged their level of trust with the average Australian following a series of scandals revealed in 2018. As well as affecting consumers’ perception of the banks in general, their actions may have raised issues with their integrity when it comes to credit growth.

Healy is not proclaiming that the sky is falling in, and in a recent interview, he described NAB as ‘tracking well in the current year.’ However, he was quick to point out that ‘these things can turn, and I’m just nervous.’ Such stark revelations show just how much pressure that the banking sector might be facing to do something about flagging share prices and begin to ameliorate the levels of public distrust in many of the major lenders.

Business credit levels come second to the home lending market but are still one of the most important indicators of progress. In the past, and possibly before the inquiry leaned so heavily on the banks to be more honest in their predictions and dealings, there was more blunt optimism within the industry that business credit lines would bounce back quickly.


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With mortgage growth stalling this year as the housing market begins to correct from a range of serious peaks, and Sydney and Melbourne in particular see their figures for real estate averages drop up to 8%, more of a spotlight is on business credit developments.

Given that half of all NAB’s profits come from business banking, there is little surprise that this would be the next port of call when mortgage lending revenue dips. However, Healy’s admissions suggest that the banks have felt less of a strong positive sentiment from small and medium enterprises (SMEs) than expected.

One of the knock-on effects from the inquiry thus far has been the tightening of credit strings, especially for SMEs, as the amount of background checks on potential borrowers increases.

Healy said that ‘some of the emerging and increasing regulatory scrutiny could impact on the bank’s preparedness to extend credit, or on the ease or difficulty of the process.’ He voiced NAB customers’ concerns and added that the media’s reporting of the commission investigation had caused some confusion about the future direction and dealings of business credit from a banking perspective.