National Australia Bank is bringing together top talent from across its divisions to form a focused business banking group. The aim is to strengthen its hold on the valuable medium to large business segment, with rivals seeking to expand their presence in high-margin corporate lending.
After years at the forefront of business banking, NAB now faces growing competition from other large Australian banks that are boosting their business lending operations. In response, NAB has launched a specialist team made up of staff from its corporate, institutional, private and business banking units. The new group will focus on improving customer service, speeding up loan approvals and expanding product offerings for clients with more than $75 million in annual turnover.
In the past five years, larger loans - particularly those above $1.5 million - have consistently increased, while the volume of smaller business loans has remained flat. NAB’s executives consider this segment essential, but analysts have pointed out a dip in the bank’s lending margin, which has fallen to 3.02% from 3.11% the previous year. The bank has experienced 17% growth in business lending over three years, securing a 22% share of the market, but maintaining that lead will be challenging.
The market environment is shifting. Competitors such as Commonwealth Bank and Westpac have intensified their focus on business lending through new strategies. Westpac plans to hire hundreds of business bankers by 2027 and has already made key leadership changes to support growth across regions and industries. At the same time, CBA is experimenting with virtual relationship managers, highlighting how technology has become a competitive tool in the fight for business clients.
It remains to be seen whether NAB’s new team can preserve or regain its market leadership. As profit margins shrink and competition grows more intense, NAB’s success in business banking will depend on the effectiveness of this new strategy in delivering strong service and financial performance.
