Andrew Thorburn, the CEO of NAB, has made a series of pledges to the major bank’s regional and rural customers, which currently comprise 40% of its customer base.
Speaking in Wagga Wagga, Thorburn outlined a three point strategy to enhance NAB’s commitment to farm finance and rural customers, covering an offset facility for farm management deposits (FMDs), interest rate changes for customers affected by drought and changes to the branch network.
The move follows fourth round royal commission hearings, which focused on customer treatment in remote and regional communities, including agriculture and farm finance clients. The commission received more than 6,000 submissions and heard stories of farmers who had been forced from their land, as well as admissions from ANZ that its conduct breached banking codes.
Thorburn said, “Such customers go through particular challenges and may fall into arrears and be unable to make their loan repayments. We want to help at this time, not make it more difficult.”
Under the new commitments, NAB will “proactively” offer its agri customers the chance to offset their FMD against lending, effectively discounting their loan’s interest rate. The bank is currently writing to all qualifying customers to invite them to arrange the offset. Further FMDs can now be used as loan security, providing farmers with access to additional security as capital to lend against.
“This enables us to quickly respond to issues raised at the recent Government drought roundtable, where we were challenged to see what prompt action we could take,” Thorburn explained.
NAB will also stop charging a higher default interest rate to customers affected by drought and will readdress its plans to reduce face-to-face services in remote locations.
Thorburn added, “This is not just about branches, this is about taking a wide view on what more we can do to assist our rural and regional communities to thrive in the future and could include ag tech, video conferencing, and innovation more generally.”
Supporting the moves, NAB has pledged to make two donations of $50,000 each to the drought funds operated by the Country Women’s Association of New South Wales and Queensland Country Women’s Association. Further donations to either organisation, up to a value of $25,000, will be matched by the bank.
Thorburn added, “Rural challenges are real, and we need to determine how to support these areas better. This is a message we’ve heard loud and clear from farmers and rural customers right across the nation – many of whom have been affected by drought conditions. The royal commission and other inquiries reveal that in some cases we have lost touch.”
The Wagga Wagga speech concluded a tour of several major rural communities, including Mildura, Toowoomba, Alice Springs, Roma, Port Lincoln, Bunbury, Dubbo, Townsville and Warrnambool.
Over coming months, Thorburn and senior NAB executives will visit more towns and communities across Australia to hear directly from those who live there. They will be joined by sixth generation farmer and former deputy PM John Anderson and internationally recognised Indigenous education specialist and community advocate, Chris Sarra.
Thorburn added, “Both John and Chris will help challenge us on these questions. They will help us listen better, and consider wider views.”
