NAB CEO Ross McEwan spoke to ABC Radio National Presenter Patricia Karvelas on Friday, 3 March 2023.
The full transcript – including comments on the cost of living, rates and inflation, branch closures and government taxes and spending – is below. You can also listen to the broadcast via the ABC website.
Patricia Karvelas (PK): The latest hardship survey from the NAB shows four in 10 Australians are experiencing some form of financial difficulty. Ross McEwan is the bank’s CEO, and he joins me in the studio. Ross McEwan, welcome.
Ross McEwan (RM): Good morning, Patricia.
PK: Your latest survey shows four in 10 people are experiencing financial difficulty, and one in three identified money as a significant form of stress. Can households afford another rate rise?
RM: You’re quite right on the stats we are now starting to see. Households are starting to feel the pressure of not just interest rates going up but also power bills, grocery bills. Everything is moving up on them with inflation, and that’s why the Reserve Bank has to stem the inflation flow we have at the moment. And the tool they have is interest rate rises.
We’re still seeing an economy that’s going forward, even if it’s a little bit slower. And inflation is still a problem. So I think we’re in for another at least two, possibly three interest rate rises over the next six months.
PK: You’ve been meeting with the NAB’s hardship team. What sort of feedback are you getting from them about the people who are either struggling or going to struggle with coming rate hikes?
RM: The first thing is that when people ring our hardship or email in, within 90 days 95% of them are back actually in good shape. So, my first thing for all of your listeners is – if you’re having difficulty, make the call or get online early. Don’t leave it too long. There are things that the NAB team can do to help. NAB Assist – it’s named accordingly. It’s not ‘NAB Recoveries’ or ‘NAB something strange’, it’s NAB Assist. It’s there to assist. Make the call early.
We are finding that people can make the adjustments. There are things we can do to help them, to get them back on their feet, but please make the call early. And people are starting to adjust – we’re seeing that in our surveys. They are starting to not do certain things to make sure the basics are done in life, and I think that a lot of families are getting back to some pretty basic things.
PK: Are they still able to meet their repayments?
RM: The vast majority of them are.
PK: Are some not being able to meet their repayments?
RM: A very, very small number.
PK: Is that going to grow?
RM: I think over the next six to 12 months we will see growth, but most of our customers are well advanced of their payments on their mortgage. We haven’t seen credit card debt grow, which is also a good sign, but with interest rates going up it’s inevitable that more people will have some difficulty.
PK: And what are your estimations around how bad it could get or how many it could be?