Some sort of renovation of National Australia Bank's positioning in the retail banking market in Australia must be on the cards, with the bank planning to eliminate some penalty fees on some everyday accounts.
The Herald Sun and
The Australian reported on the plans today, which NAB may feature as part of a speech by the managing director, Cameron Clyne, in Sydney today.
"These fees generate the most customer complaints of any bank fee and result in more customer complaints to us than any other matter," personal banking executive Lisa Gray told bank staff in an email yesterday advising them of the changes, the Herald Sun reported.
From October NAB will drop its $30 penalty fee on customers who overdraw their accounts or lack funds in their account to make periodic payments.
The change will apply to personal transaction and savings accounts, including cheque accounts, according to the Herald Sun.
Late payments on credit cards, direct debits that cannot be honoured, overdrawn transaction accounts and spending over the limit on credit cards make up 20 per cent of all fees paid on retail accounts, according to a Reserve Bank study of retail bank fees published in May.
In a flavour of the forthcoming rhetoric from the bank the Herald Sun quoted Gray in her staff email as writing: "This decision is final. There are no disclaimers, we will not reverse it and, importantly, we will not recoup the fee anywhere else.
"The benefits for our business are not hidden - we want to be even more competitive."
This latter aspect is perhaps the giveaway on NAB's thinking.
Penalty fees have been a persistent sore for the banking sector for about five years and, with exceptions (NAB being one of them on a select class of customers) banks have opted to continue with the fees.
Banks have also managed to bat away the legal analysis on the consumer law lobby that the fees are massively in excess of cost and are thus illegal. (Though forthcoming changes to consumer law may make them even more difficult to maintain.)
The bigger picture may be the realisation by NAB's reasonably new management team that in retail banking in Australia the NAB brand is drab, the marketing making little impact, the product set is dated, and, thanks also to conservative credit decisions taken in advance of the 2007 turn in the cycle, the bank's lost a lot of ground in the market to each of its three major competitors.
So the rush for some favourable public relations over penalty fees may be a signal of more extensive plans by NAB to refresh the positioning of the retail bank.
The only other effort of note in the last year - the introduction of the UBank brand, an internet banking channel that lacks internet banking functionality - supposedly has attracted more deposits than budgeted.
UBank is yet to introduce any of the "new products" promised for many months at its web page.