Banks 'diligent', not rationing credit

Ian Rogers
More 'intervention’ in credit says DBM’s Kipling Zubevich
There is no rationing of credit for business, or so believes the senior banker taking the helm of industry monitor DBM Consultants.

Kipling Zubevich, more a consultant by trade than a career banker, held a series of senior roles at NAB before taking the lure as CEO at DBM. At NAB he was most recently general manager, business marketing.

Zubevich started at NAB in 2010 as head of customer strategy, business and in 2014 managed digital marketing.

"As far as I'm aware, there is certainly no rationing of business credit", Zubevich told Banking Day yesterday.

"It's an art, a science, with banks continuously evolving models as to what is credit worthy.

"The public expect banks to be more diligent, and this in time leads to manual intervention by credit teams," he said.

David Murray, chair of AMP and former CBA CEO, on Monday told the AFR that confusion over responsible lending was jeopardising the ability of households and businesses to access credit at a reasonable price.
The avalanche of business failures that emerged over the summer - notably in retail - may be giving banks the shakes over credit quality more broadly.

But analysis by trade credit insurers NCI suggests this perception may be flawed, or things weren't so bad right up until Christmas.

NCI late last week produced its quarterly Trade Credit Risk Index with the headline: "Welcome reprieve in claim numbers."

While a dip in claim numbers was seasonal, NCI said the number of claims lodged during the December 2019 quarter fell 15 per cent and the value of claims lodged fell 14 per cent.

Banks seem, however, to be keeping things tight on the supply side of business credit.

The most recent APRA data, released on Friday, shows that over the year to December 2019 credit advanced to business increased 1.3 per cent.

Over the December quarter growth was 0.3 per cent and in the month of December credit for business declined 0.2 per cent.

At NAB, Zubevich's old shop, the bank's share of business credit at the end of the year - 22.9 per cent - is down 30 basis points from six months earlier.

NAB has a history of turning things around when credit policies are easier.

In their media release yesterday, DBM summarised "highlights of Zubevich's 10 years at NAB: delivering two successful SME brand campaigns which helped NAB fortify its business banking leadership position; leading a number of product acquisition programs, each of which exceeded targets by 30 per cent or more and delivering a 20 per cent efficiency uplift by shaping NAB's agile marketing transformation."


DBM's founder, Dhruba Gupta, who will remain with the company to focus on business development refinement of DBM Atlas, which the company describes in its media release as "the industry standard for advocacy and behavioural measurement in Australian financial services."