 Bank fee reductions can be profitable in the long run
National Australia Bank CEO Cameron Clyne says that regardless of the bank fee reductions which caused the drop of its profit, the cut will pay off in the long run as it will be helpful in customer retention.
The fee reductions caused a 22% decline in personal banking earnings of NAB. Despite this, NAB says that its cash earnings reaches $2.2 billion, which is 8.2 % higher than that of last year.
"They represent an investment to create a sustainable business and improve customer relationships and satisfaction and the broader reputation of the NAB," Clyde noted in the financial report.
This strategy can work well for the NAB during an election year, and may help intercept increased regulation or taxes, says Clyde.
According to Clyde customer satisfaction has improved and the bank recorded 32% increase in new transaction account openings. The bank also reported 20 % increase in new mortgage and 42 % decrease in customer complaints.
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