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[SYDNEY] National Australia Bank plans to tap surging demand for corporate credit by becoming the first major bank in Australia to offer small companies unsecured loans online.
Australia's 'big four' banks already supply a variety of unsecured loans to small businesses, but NAB is betting that its online service will be popular due to its convenience.
The move comes as NAB and rivals Commonwealth Bank, Westpac and ANZ Banking battle to offset a slowdown in home loans, which have typically been a core part of their businesses.
The overall size of loans extended to businesses in Australia grew at its fastest pace in April since 2008, according to a report this week by analysts at UBS.
"This (increase in corporate loans) is net positive for banks. If anything this is where the growth should be," said Bell Potter analyst TS Lim.
Australian banks have been grappling with slowing earnings after years of record profits.
NAB said on Wednesday that its 'QuickBiz Loan' would launch in early June, with customers able to apply for up to A$50,000 (S$50,000) in funding online.
Annual interest will be charged at 13.85 per cent, compared with nearly 5 per cent for home loans and an official cash rate of 1.75 per cent.
Commonwealth Bank and Westpac have entered into referral tie-ups with separate online lending companies for business loans, mainly targetting small businesses.
The increase in business lending in April was driven by CBA, which chalked up 29 per cent growth in the space month-on-month, according to the latest regulatory data.
Nearly two thirds of Australian banks balance sheets are exposed to mortgages, where growth has been consistently slowing following a series of regulatory steps to contain rocketing house prices in Sydney and Melbourne.
Bank shares are among the worst performers on the benchmark S&P/ASX index this year, down between 8.5 per cent and 10 per cent. The benchmark is largely unchanged.