Matt Comyn backed out of home loan competition against National Australia Bank, Macquarie, ANZ and Westpac to protect shareholder profits. But now its book has shrunk, a rare event for the country’s biggest bank.
on August 9, telling shareholders he was all about “sustainable financial returns” and warning them July was likely to be a soft month for volumes.But no management team likes to see a month of negative growth, even if they could see it coming and felt it was because they were doing the right thing by investors. Surely, it makes it harder to motivate staff and brokers, particularly in a competitive market. Shareholders should welcome the rhetoric, but you also have to keep staff hungry.
If not, what other tricks does the bank have up its sleeve heading into the busy spring home-buying season and the next big refinancing season? Price – be it rates or things such as cashback – which reduce the overall cost, is usually the trick that counts.Macquarie’s analysts perhaps put it best when they likened it to a game of chicken. The analysts said their research suggested CBA was holding its ground on price, happy to price its loans about 20 basis points higher than its big bank rivals.
The banks watch each other incredibly closely, and there must be a bit of game theory going on about what CBA may or may not do. Westpac won the most out of the big four banks in July, ahead of ANZ and NAB. Macquarie and AMP led the second-tier banks.
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