Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 316

Welcome to the Firstlinks Edition 316

If you knew your incoming boss thought something the business does is 'absolutely abhorrent', would you fix it before he arrived? I know I would. So is NAB redesigning and repricing some of its products before Ross McEwan becomes CEO, since that's what he thinks about many of the current pricing practices. My dictionary defines 'abhorrent' as 'inspiring disgust and loathing'. There's not much wriggle room there.

Or has McEwan forgotten how Australian banks often price their products? Shortly after McEwan took over RBS in 2014, he acknowledged:

"We happen to be the least trusted bank in the least trusted sector in the marketplace."

He set about restoring trust, and he has already said his goal will be to make NAB the most trusted bank in Australia. He also said in 2014:

“It is absolutely abhorrent to give better rates to a new customer than someone who has been with you for 30 years. We have 16 million customers – it is time we need to focus on them rather than winning one or two more ... We do not want to build a bank by sucking people in with better rates only to dump them six months later. That is what created problems in this industry.”

Ross McEwan hates introductory rates. He said RBS would not win business by offering attractive new deals that are not available to its existing customers, but that's exactly what NAB and other Australian banks do regularly. Here are a couple of examples:

1. NAB iSaver account offers a four month introductory rate of 2.11% for new customers then the rate falls to a miserly 0.11% as a reward for loyalty.

2. Balance transfer rates on credit cards only last for a limited time. At the end of the balance transfer period, any of the transfer amount not paid off shifts to the higher cash advance rate.

 

There is even a video explaining how this works. Elsewhere, there are 'special' and 'standard' term deposits, and home loan rates not available to refinance an existing home loan.

It's what is called a loyalty taxas I've written about before, and former ACCC Chairman Allan Fels makes similar criticisms of the insurance industry. Add your thoughts on the merits of introductory offers in Have Your Say.

On to some brighter notes ...

Continuing our popular Interview Series, Megan Scott of Martin Currie Australia explains how she manages her wide range of responsibilities as part of a global investment business. 

On investing, most Australian listed property trusts (A-REITs) had a strong FY19, and Patrick Barrett checks whether it will continue. Investors in bank hybrids have also had a good run, but with much tighter margins, both Jonathan Rochford and Justin McCarthy ask if it's time to sell.

Dick Smith put franking credits on the front page again (well, maybe page two) when he suddenly discovered his big refund, and Jon Kalkman and Tony Dillon do the numbers for him.

Miles Staude draws on the proven lessons from the Warren Buffett teacher, Benjamin Graham, to show value investing will again have its day, maybe when we're not at all-time highs.

This week's White Paper from AMP Capital is a detailed study on the role of 'green bonds', while the NAB/nabtrade hybrid rate sheet below shows how low many margins have fallen.

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 

  •   25 July 2019
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

Building a lazy ETF portfolio in 2026

What are the best ways to build a simple portfolio from scratch? I’ve addressed this issue before but think it’s worth revisiting given markets and the world have since changed, throwing up new challenges and things to consider.

Get set for a bumpy 2026

At this time last year, I forecast that 2025 would likely be a positive year given strong economic prospects and disinflation. The outlook for this year is less clear cut and here is what investors should do.

Meg on SMSFs: First glimpse of revised Division 296 tax

Treasury has released draft legislation for a new version of the controversial $3 million super tax. It's a significant improvement on the original proposal but there are some stings in the tail.

Ray Dalio on 2025’s real story, Trump, and what’s next

The renowned investor says 2025’s real story wasn’t AI or US stocks but the shift away from American assets and a collapse in the value of money. And he outlines how to best position portfolios for what’s ahead.

10 fearless forecasts for 2026

The predictions include dividends will outstrip growth as a source of Australian equity returns, US market performance will be underwhelming, while US government bonds will beat gold.

13 million spare bedrooms: Rethinking Australia’s housing shortfall

We don’t have a housing shortage; we have housing misallocation. This explores why so many bedrooms go unused, what’s been tried before, and five things to unlock housing capacity – no new building required.

Latest Updates

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

Superannuation

The Division 296 tax is still a quasi-wealth tax

The latest draft legislation may be an improvement but it still has the whiff of a wealth tax about it. The question remains whether a golden opportunity for simpler and fairer super tax reform has been missed.

Superannuation

Is it really ‘your’ super fund?

Your super isn’t a bank account you own; it’s a trust you merely benefit from. So why would the Division 296 tax you personally on assets, income and gains you legally don’t own?

Shares

Inflation is the biggest destroyer of wealth

Inflation consistently undermines wealth, even in low-inflation environments. Whether or not it returns to target, investors must protect portfolios from its compounding impact on future living standards.

Shares

Picking the next sector winner

Global equity markets have experienced stellar returns in 2024 and 2025 led, in large part, by the boom in AI. Which sector could be the next star in global markets? This names three future winners.

Infrastructure

What investors should expect when investing in infrastructure: yield

The case for listed infrastructure is built on stable earnings and cash flows, which have sustained 4% dividend yields across cycles and supported consistent, inflation-linked long-term returns.

Investment strategies

Valuing AI: Extreme bubble, new golden era, or both

The US stock market sits in prolonged bubble territory, driven by AI enthusiasm. History suggests eventual mean reversion, reminding investors to weigh potential risks against current market optimism.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.