Finance News: 01 Feb 2010
A new battlefront has broken out between Australia's major banks to attract and hold small to medium businesses which continue to reel from the global financial crisis...
.
The National Australia Bank has landed the first salvo by abolishing a range of fees for business customers, including the controversial dishonour charges for cheques and electronic payments.
The climb down eliminates 65 per cent of overdrawn fees and follows last year's fees reprieve for personal banking customers.
In a bid to rebuild its image with customers and the Federal Government, the NAB will also provide a $1,000 buffer for business overdrafts.
The initiative will take the pressure off NAB's 500,000 business customers and take around $40 million from the bank's revenue.
"Australian small businesses have been through a challenging time and in addition to continuing to lend, we also want to continue to improve our service offer and ensure our fees are fair," said Joseph Healy, the group executive business banking at NAB.
"We hope the changes we are announcing today will remove the fees that annoy our small business customers the most."
The NAB has been the most aggressive of the big four banks in eliminating fees in a bid to attract new customers and take market share from competitors.
Mr Healy told AM that with credit markets improving, there would be more competition between banks.
"There's no doubt that there's renewed competition in the small business market and we think that's good. We are focusing on our customers first and recognising that with competition we'll be watching what we do," Mr Healy said.
"I think that we're in an environment where the economic outlook becomes more stable, we'll see banks continue to look at fees and interest rates. As risk reduces, then some of the interest rate margins for risk will have to reflect that."
The Reserve Bank holds its first meeting of 2010 next week and most economists are expecting the cash rate to rise 25 basis points to 4 per cent.
SOURCE: ABC News
|
|
