Interest Rates: NAB CEO warns of three RBA hikes in six months
Homeowners have been warned by National Australia Bank CEO Ross McEwan to brace themselves for three more rate hikes, the first of which will follow next week.
In a stark warning to families, the boss of the major bank predicted that the number of people experiencing mortgage stress is likely to increase.
He urged those who are struggling to talk to the bank as soon as possible if they fall behind.
The bank admits that four in ten people now have financial problems and one in three sees money as a major form of stress.
“We’re starting to see households starting to feel pressure from not just rising interest rates, but utility bills, grocery bills, everything going up,” he told ABC Radio National.
“That is why the Reserve Bank needs to put a stop to the inflation game we have right now and the tools they have when interest rates rise.
“So I think we have at least two, possibly three more rate hikes in the next six months.”
The NAB CEO urged those struggling to seek help and return the bank’s calls if they reach out.
“The first is that when people call or email our hardship team, within 90 days, 90 percent of them are back in good, good shape,” he said.
“If you have any problems, call or go online sooner. Don’t leave it for too long. There are things the NAB team can do to help.
“But please call early.”
In some good news, he predicted that Australia would avoid a recession.
“I’m actually still confident that we’re going to avoid a recession,” he said.
Both Commonwealth Bank and NAB announced Wednesday that they had increased certain rates for new customers
“I think it shows that the rates are not always related to the RBA,” NAB’s CEO said.
“The RBA is a factor that we factored into our rates. Second, the other thing that affects how we spend where we put our rates is the risk profile of clients.
In some good news for Treasurer Jim Chalmers, the NAB CEO said the super changes being proposed for balances over $3 million were reasonable.
“Actually, I think… three million is a lot of money to have in a super fund,” he said.
But he suggested the government consider indexing the $3 million threshold.
“I think that’s something the government could look at,” he said.
“But let’s see, it didn’t hit 99.5 per cent of Australians, it hit a small group of people who had huge amounts of money [in] those funds, I’m sure they’ll find other things to put their money into.