Big bank CEOs threaten fallout

The major bank chief executives have begun sending not so subtle signals to their suppliers and business partners that the banks will not be alone in suffering the impact of the Government’s proposed bank levy.

National Australia Bank (NAB) chief executive, Andrew Thorburn sent a clear message using a newspaper column to suggest that not only service providers but the media would be likely to pay a price.

“When our costs go up we must decide whether to reduce what we spend with suppliers,” Thorburn said. “These include the people who own the properties we lease as branches and business centres; the agencies we pay to advertise our services or the companies that provide and help manage our technology”.

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He said that, alternatively, the banks could “increase the rates we charge borrowers or reduce the rates we pay savers”.

However Thorburn’s warning and the admonitions of other major bank chief executives, came as a group claiming to represent the mutual banks and credit unions launched a campaign encouraging people to switch to smaller banks in the event the large banks sought to impose additional costs on their customers.

The Business Council of Co-operatives and Mutuals has established a “switch don’t bitch” website in which they are urging people to vote with their feet rather than be impacted by the big bank’s reaction to the bank levy.

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May be they will just have to accept slightly lower ROEs than the historically very high ROEs they have provided their shareholders - Australian banks have some of the highest ROE's in the world. Do we need banks with the highest ROEs in the world?

Poor bank CEOs, throwing their toys out of the cot. Doesn't the government realise that bonuses are tied to profit increase. These CEO's will not be able to gouge the Australian consumer from the sanctity of the four pillars - does this mean they will have to rationalise spending and compete like other industries - how extraordinarily uncaring. It isn't as though the banks would ever ask their suppliers to take a pay cut - oh that is right they have reduced fees to mortgage brokers and life risk advisers by between 35 and 40% with no actual benefits to the consumer - just tucked that into the profit line. They raised their ATMs fees (even though their transactions have got cheaper) and continue to charge ridiculous fees on foreign exchange transactions for no reason other than they can.
Time for a wake up and hopefully the Australian consumer will start paying attention and vote with their feet

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