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Jessica Darnbrough
NAB Broker’s general manager distribution John Flavell has hit out at suggestions that the lender’s pricing is unsustainable.
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At the lender's broker roundtable in Sydney yesterday, Mr Flavell said while NAB Broker’s margins have been put under pressure of late, the lender will continue to have one of the sharpest rates on the market.
“They [competitors] can say it is not sustainable. At the end of the day, I have the figures and the numbers to suggest otherwise,” Mr Flavell said.
“We have and always will continue to focus on return on equity. A lot of people get caught up on the net interest margins and while these margins have come down by about 12 points, or 5 per cent, in recent years, we don’t just look at the numerator, we look at the denominator.”
Mr Flavell said the lender’s price for risk strategy had put them in good stead because the business they write through the broker channel is now first rate.
“The amount of equity that you have to hold can have a huge impact on your profitability. Yes, we have grown our business, and yes we are seeing increased pressure on our margins, but the quality of business we write is first rate, and as such, the amount of equity we have to hold comes down.”
"Because our price for risk strategy has helped us write good business, we can conitnue to keep rates sharp and lend responsibly."
