NAB chief executive Ross McEwan said the bank was seeing house prices “going sideways” rather than down.Credit:Louie Douvis
While NAB profited handsomely from higher interest rates in the December half,McEwan said any further rate rises from here would be less beneficial to the lender,amid fierce mortgage competition and rising deposit costs.
Analysts said the results showed NAB’s profits were being squeezed harder than expected,as the bank’s shares plunged 6 per cent to $26.81,while shares in Commonwealth Bank,Westpac and ANZ Bank also dropped.
McEwan said three months ago he had predicted two more rate rises,and after this week’s 0.25 percentage point increase from the Reserve Bank,it was getting close to a point where households needed stability in their mortgage repayments.
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“We’ve had one,there may be one more,but I think we’re getting very close to the top of the cycle,” McEwan said.
While this week’s surprise rate rise prompted some to warn of recession risk,McEwan said the RBA had been “very considered and measured in their moves”,adding that it took about three to four months for households to adjust their budgets to a rate rise.
“What’s really important for the household is to just give them certainty for a period of time,” McEwan said. “If we keep changing on them,they never get the stability.”