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Damage to economy is not as bad as last year, says NAB boss

Business

The head of the National Australia Bank says the current series of coronavirus lockdowns have not been as financially damaging for many of its customers as last year’s national shutdown.

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NAB chief executive Ross McEwan told a hearing in Canberra on Thursday many businesses are in a state of hibernation, waiting for restrictions to open up and ready to get going again.

“For others, in particular, small business customers in Sydney and Melbourne CBDs, the situation is more fragile,” McEwan told the House of Representatives economics committee.

“The number of customers in financial hardship is rising since the Delta outbreak but most continue to be able to make some form of payment.”

At August 31, just over $1.8 billion in lending was on deferral compared with $58 billion at the height of the pandemic last year.

McEwan noted that before the most recent lockdowns, the level of small and medium business lending activity was the highest the bank had seen in six years.

“While some businesses are really hurting, others are doing incredibly well,” he said.

“This is particularly evident in mining, agriculture and some forms of manufacturing.”

But more broadly, he said there is light at the end of the tunnel with forecasts that 80 per cent of eligible Australians will have had their second coronavirus vaccination by mid-November.

“When we can safely move from restrictions to freedoms, I am very confident the Australian economy will recover swiftly,” the CEO said.

He said the bank is lending more money to more customers, with $3.8 billion extended to businesses across the country.

“We are growing safely, without compromise on our lending standards,” McEwan said.

“We believe the extraordinary rise in house prices over the past 12 months will slow, in line with what buyers are willing and able to pay.”

Westpac will face the committee later on Thursday, while the ANZ and the Commonwealth Bank will be grilled on September 23.

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