Today NAB Group CEO Andrew Irvine delivered an opening statement to the House of Representatives Standing Committee on Economics. Below is Mr Irvine's statement.
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Thank you, Chair and good morning. This is my first time appearing before this Committee. I value the opportunity to have this conversation and your role in the banking sector and broader economy.
I would like to acknowledge the Ngunnawal People, traditional owners of the land on which we meet, and pay my respects to their Elders past and present.
Since becoming NAB Group CEO in April, I have made it a priority to meet many customers and colleagues. Their resilience, their innovation and their optimism, despite the challenging economic conditions, is testament to the "can-do" Australian spirit. Today, I have the privilege of representing their views and their concerns, as well as sharing my thoughts on the economy and several key areas of focus for NAB.
Economy
NAB remains optimistic about the longer-term outlook for Australia, though the reality today is more challenging. Growth is weaker than it has been for many years, though still positive. The job market continues to show resilience but is softening. Business conditions are only slightly below the long-term average. We do however expect the economy to grow more quickly in the second half of the year.
The key question on many minds is how long interest rates will remain at their current restrictive level to bring inflationary pressures into the RBA's target range.
Customers
In terms of what all this means to our customers, my view is that there are two Australias, and a two-speed economy operating at present. Customers in certain sectors and certain geographies are doing well and are ambitious to grow. These include mining and resources businesses and consumers living and working in parts of Western Australia, the Northern Territory and Queensland.
In other sectors and geographies customers are doing it much tougher. These include retail and parts of the construction industry. Victoria and New South Wales are under more pressure than other states. Our data shows people are having to make tough decisions about where they spend their money. They are getting by, but it is tough. Not unexpectedly, we saw some asset deterioration in our balance sheet in our most recent quarter.
There is a lot of focus on homebuyers with a home loan and the pressure of higher interest rates. But we must all remember that one-in-three Australian households have a home loan. On the other hand, inflation hurts everyone. Renters have been particularly hard hit by higher rents and higher living costs.
NAB's consumer sentiment survey continues to show cost-of-living pressures are causing the greatest stress, with 1 in 3 Australians reporting very high stress related to cost of living.
NAB's bankers are helping our customers who need support with assistance tailored to their individual circumstances.
Our message to customers always, is that if you are in difficulty, please call us, and call us early.
There are five other areas of focus for us at NAB. These are topics that have previously been brought to this Committee.
Affordable housing
The first area is the housing crisis. This is Australia's single biggest societal and policy challenge. Scalability is crucial for success. NAB is making good progress on our plan to deliver $6 billion of support to more affordable and specialist housing by 2029.
We are partnering with community housing providers, developers, government and investors to increase the supply and quality of social and affordable housing.
While some progress is being made, we need to work together with more urgency, and be far more innovative in both the type of housing and methods of construction if we are to tackle this crisis.
Scams and fraud
The second is scams and fraud. This is the plague of our times. NAB has a bank-wide strategy to target scammers and protect our customers. Initiatives include removing links from text messages, expanding payment alert types in digital banking, blocking payments to high-risk crypto platforms and working with telcos to prevent spoofing.
This is working. Payment alerts resulted in about $100m of potential scam payments being abandoned by our customers from March 2023 to June this year. NAB customer losses fell 24% between October 2023 and June 2024 compared with the same period a year before.
As part of Scam Awareness Week this week, we had more than 15,000 people register for our free webinars with NAB's experts who shared red flags about scams and ways to protect yourself, your family and your business.
I also want to acknowledge the Government and its agencies for their work in this space and we welcome the new Scam Code.
NAB supports the approach the Government is taking on this, which focuses on prevention. It is clear we need to do more, collectively, to ensure Australia is the hardest country in the world for criminals to steal our money. Banks, telcos, social and digital media companies all need to play their part to stop scams happening before they reach customers.
Making things easier for businesses and creating growth
Thirdly, productivity together with housing availability drive living standards and economic growth. Small and medium businesses continue to tell us it can be too hard to run and grow a business and be more productive. They say there's too much complexity and that takes too much time away from running their business.
We are working with our business customers to better understand the opportunities and the barriers they face.
We will continue to advocate for our business customers through policy settings that make them more productive and help them grow.
Delivery of banking services
The fourth area that we are focused on is delivering banking services that meet the needs and preferences of our customers. We are constantly thinking about how our digital and physical footprint evolves as customer behaviour changes. This includes the issue of access to cash, especially in rural and remote areas. We continue to work constructively with government, regulators, Australia Post and customers on the future of banking services.
Climate transition
The final area is working with customers and our community to support Australia's transition to net zero. We want to help our customers reduce emissions and build climate resilience. At the same time, we are acutely aware of the need for reliable energy supply, including the role of gas, particularly as rising power costs hurt Australian families and hurt Australian businesses.
There needs to be an orderly transition to net zero that balances the social, economic and environmental requirements. We look forward to playing our role.
Thank you for the opportunity to speak with you today. Shaun and I look forward to discussing these issues and other important topics with the Committee.
