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.

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 606 with weekend update

The boss of Australia’s fourth largest super fund by assets, UniSuper’s John Pearce, says Trump has declared an economic war and he’ll be reducing his US stock exposure over time. Should you follow suit?

  • 10 April 2025

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

An enlightened dividend path

While many chase high yields, true investment power lies in companies that steadily grow dividends. This strategy, rooted in patience and discipline, quietly compounds wealth and anchors investors through market turbulence.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

Latest Updates

Investment strategies

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Investment strategies

Does dividend investing make sense?

Dividend investing offers steady income and behavioral benefits, but its effectiveness depends on goals, market conditions, and fundamentals - especially in retirement, where it may limit full use of savings.

Economics

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

Strategy

Ageing in spurts

Fascinating initial studies suggest that while we age continuously in years, our bodies age, not at a uniform rate, but in spurts at around ages 44 and 60.

Interviews

Platinum's new international funds boss shifts gears

Portfolio Manager Ted Alexander outlines the changes that he's made to Platinum's International Fund portfolio since taking charge in March, while staying true to its contrarian, value-focused roots.

Investment strategies

Four ways to capitalise on a forgotten investing megatrend

The Trump administration has not killed the multi-decade investment opportunity in decarbonisation. These four industries in particular face a step-change in demand and could reward long-term investors.

Strategy

How the election polls got it so wrong

The recent federal election outcome has puzzled many, with Labor's significant win despite a modest primary vote share. Preference flows played a crucial role, highlighting the complexity of forecasting electoral results.

Sponsors

Alliances

© 2025 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.