Nabbed

The public persona of National Australia Bank has been giving a good impression of Dr. Jekyll and Mr. Hyde over the past few weeks.

One side of the bank is trying to position the group as an institution at the grassroots level and playing a positive role in the nation’s local communities, while another side has been forced to defend accusations of rate gouging.

Last week, for instance, the bank bowed to public pressure and re-priced its child saver account after initially slashing rates on the account.

It was quite astounding that public pressure was deemed so strong that the bank did an about turn and raised its rates by the same 0.25% it was initially going to slash it by.

The product is not one of the group’s main bread winners but reinforced just how sensitive the market is at present, after the bank failed to pass on the latest 25bps drop in interest rates.

For businesses that are large by nature their public-facing characters can often be multi-faceted, especially when individual business within a group operate as distinct entities but under a collective brand.

Banks are in a tough position.

Australians generally err on the side of negativity when it comes to financial institutions, however the heightened sensitivity particularly considering the finance sector (albeit in the US and UK) put us in the pickle we now face, now means companies are under the spotlight with almost everything they do in relation to pricing and rates.

The damaging activities, such as the one outlined above, and irrespective of whether such moves are justified in the current restrictive capital financing environment, reduces and in some cases reverses any good will or positive brand perception campaigns such as AFL Aus Kick may generate.

NAB ATM’s in Sydney have been given a new facelift - not the addition of perilous ‘skimming machines’ – but a series of Art Works espousing the value of the country’s local communities and heritage.

Much of our ongoing research indicates the big four banks invariably underperform smaller banks, credit unions and mutuals, in terms of depth of relationship and personal contact.