NAB sees upside of the credit crunch

by Richard Kilner

Story link: NAB sees upside of the credit crunch

The worsening credit markets has led to a positive aspect for Australian banks, according to John Stewart, National Australia Bank’s (NAB) chief executive.

Because of the credit crunch banks now have a surplus of business available with strong profit margins.

In recent times credit has been undervalued, but following the credit crunch there are now many customers content with a more reasonable price for credit.

This has seen profits margins on credit, which were extremely tight, become much more attractive for banks.

Nor is Stewart alone in his assessment of the positive side to the credit crunch.

ANZ chief executive Mike Smith has revealed that the firm realised its annual lending targets in the first quarter of the September financial year.

NAB is due to release an interim report on 9 May.

JP Morgan has downgraded the firm from neutral to underweight, partly due to fears over NAB’s $900m acquisition of US bank Great Western.

Stewart responded to the downgrading by saying that his focus whilst running the firm was the medium and longterm, adding that the bank had a clear strategy for Great Western.