NAB quits SMSF loan market

National Australia Bank has quit the self-managed superannuation fund loan market, telling brokers it will no longer offer the controversial loan.

Several sources have told Banking Day that NAB was getting out of the market, with one suggesting there may have been an issue of mis-selling through one adviser group.

The bank did respond to inquiries.

NAB's move comes at a time when the Government is considering a Financial System Inquiry recommendation that self-managed superannuation fund trustees be banned from borrowing.

At the same time, the Australian Prudential Regulation Authority is cracking down on investor property loans and the Australian Securities and Investments Commission is moving against a revival of property spruiking.

The FSI's view is that the superannuation system provides a source of stability in times of financial crisis and excessive gearing by SMSFs would undermine that.

APRA wants to see investor property lending (a category into which SMSF lending falls) capped at 10 per cent.

NAB is understood to have been a small player in the market. Among the big banks Westpac and Commonwealth Bank are more active, while ANZ does not offer SMSF loans.