NAB counts on bright outlook for business lending

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Ross McEwan says business credit growth will keep expanding even as rates rise, and homeowners will make adjustments.

National Australia Bank is counting on its powerful small and medium-sized business lending franchise to take up any slack from a softer mortgage market as interest rates start rising again.

However, he also said that home loan borrowers would be able to withstand higher rates and prioritise mortgage repayments, even with higher interest repayments. He echoed Still, the RBA’s move had come much faster than expected, with NAB expecting three more 25 basis point increases expected this year.“It’s certainly come a lot quicker than any of us would have anticipated and that’s because inflation has started to bite ... like we haven’t seen for decades,” he said.

Crucially, he said businesses were able to pass on cost inflation to consumers and this is underpinning their confidence to invest, particularly given state and federal government investments in major projects.“We’ve got so many infrastructure programs in flight and wanting to be started ... and we’re seeing businesses with very strong balance sheets wanting to invest,” Mr McEwan said.

 

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