Long road back for NAB
More evidence is emerging of National Australia Bank's progress in its retail banking strategy in Australia. The segments of business performing best for NAB are deposits gathered under the UBank brand and home loans originated through brokers and funded via Advantedge.Evidence of progress in other areas, including the NAB-branded branch and direct channels that are the intended beneficiaries of the "break up" campaign, are much sketchier.Monthly data on bank assets and liabilities published by APRA for April 2011 shows NAB held a 14.13 per cent market share for household deposits, up from a market share low, in June 2009, of 12.95 per cent. (The market share relates to the APRA data on deposits for all banks).NAB's UBank brand, first launched in late 2008, introduced an at-call savings product in August 2009, and the bank's gains in the deposit market since then appear to be driven overwhelmingly by deposit flows through UBank.Alex Twigg, general manager of UBank, told the Cebit computer conference in Sydney yesterday that UBank notched up almost 200,000 customers and is managing close to A$10 billion of deposits.NAB's overall gain in household deposits since mid-2009 is around $11 billion, which suggests very little of the net gain in deposits can be pinned on the sales efforts of the branch networks or NAB-branded online channels, in spite of the elimination of account keeping fees and nuisance fees on some products, and valiant efforts (for the banking sector) at drumming up favourable public relations.On the asset side of the balance sheet, NAB continues to grow at well above system in home loans.NAB's rate of growth for April 2011, over March, was 1.2 per cent, a rate matched only by a resurgent Bendigo and Adelaide Bank. Over three months and six months, NAB exceeded system growth by a factor of two.As detailed in NAB's financial statements for the March 2011 half-year, the bulk of this growth in home loan volumes appears to be coming through NAB's Advantedge arm and through brokers.For the month of April, NAB would want to be generating more of these sales through its primary brand given the big banks' pledge to pay exit fees on home loans for customers refinancing, and the impact of the mid-February launch of the "break up" campaign. On business loans, where trends are more volatile, the data is mixed for NAB.In April, NAB's business lending book declined by 0.6 per cent in line with the rest of the market. Over three months, NAB reported growth in business loans of 1.0 per cent, or two-thirds the growth for all banks. Over six months, NAB reported business loan growth of more than three times system.In the eight months since August 2010 - a series break that shows an artificial rise in NAB's business loan market share - the bank's market share has continued to improve. On APRA data, this market share was 23.8 per cent at April 2011, up from 22.5 per cent at August 2010.