Thorburn says NAB's service levels need to improve

National Australia Bank chief executive Andrew Thorburn has conceded that the bank's "fulfilment" processes in business and personal banking are not up to standard and has outlined significant investment in a new lending platform, better training of business bankers and an increase in business banker numbers.

The group will focus its resources on priority customer segments in Australia and New Zealand. Small and medium business customers will be prioritised. Personal banking is also a priority, particularly the mortgage market.

The Australian banking division contributed A$3.3 billion of cash earnings to the group result during the March half - an increase of four per cent over the previous corresponding period. Australian division cash earnings made up 77.6 per cent of total group earnings.

Thorburn said 150 business bankers had been appointed during the March half and 70 more would be appointed during the September half.

NAB is taking "operational roles" out of business banking centres and putting them into seven "fulfilment centres" in a bid to achieve lower error rates and improve turnaround times.

It is also simplifying its business lending process to reduce customer documentation requirements and move the "time to decision" to within two to four days for most applications.

Last October Thorburn said: "We ask customers to tell us things that we already know and if they want multiple products they have to make multiple applications."

To overcome this, in March NAB launched a service called NAB View in the business bank - a "customer hub" giving business bankers a full view of customer holdings.

In January it launched NAB Now, a mobile point of sale device with on-the-spot invoicing and same day funds.

In the personal banking business, the bank will launch a pilot of a new origination platform in the current half.

The system has been designed to provide conditional home loan approvals in five minutes, a single application for multiple products and online document submission.

The Australian division's net interest margin was 1.6 per cent, which was below the group average and below peers. Thorburn has set out to address this, holding back five basis points of the latest Reserve Bank cash rate cut.

He said NAB was committed to being competitive on price in the mortgage market but it did not have to lead on it. He is betting that improved service levels will give the bank continued growth above system and a higher return.