CBA business lending share surges, but NAB says it is holding the line
National Australia Bank says it can hold the line against Commonwealth Bank, the country’s largest lender, which is aggressively pushing for share in the lucrative business finance market.
CBA’s business bank grew its loan book by 8.7 per cent in the 12 months to July, lifting its market share from 17.8 per cent to 18.1 per cent, according to new figures published by the prudential regulator. The division’s cash profits rose 32 per cent to $3.9 billion to June 30, outpacing the retail bank.
NAB executive Andrew Irvine says that the focus, for now, “is on helping our customers manage through what is a difficult time in Australia”. Paul Jeffers
The growth of the business loan book was ahead of the system as a whole – which rose 6.6 per cent in the 12-month period – while NAB was lower, at 5.9 per cent. NAB remains the largest business lender with a 21.8 per cent market share, albeit a slip from 21.9 per cent one year earlier.
Last month, Michael Vacy-Lyle, who runs CBA’s business bank, said it was an “inevitability” that it would overtake NAB as the largest lender in the sector.
However, NAB’s Andrew Irvine says he is determined it will remain the largest lender. “It is absolutely not [an inevitability],” Mr Irvine told The Australian Financial Review. “We are not going to lie down and hand it over.”
It sets the stage for a battle for business customers over the next 12 months. It is a critical segment for the major banks, since the returns from their home loan portfolios have been battered by the so-called “mortgage wars”.
UBS analyst John Storey said CBA’s business bank was more profitable than NAB and could be worth $69 billion on a stand-alone basis. There were more opportunities for CBA to grow the business bank by
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