Lasting the distance with NAB

Australian businesses have faced massive dislocation due to COVID and its aftermath, resulting in high interest rates and high inflation. These factors are putting pressure on the economy, creating challenging business conditions. Chris Thomas, executive – NAB commercial broker and equipment finance sales, says higher inflation might affect consumer demand and business profitability. But NAB can see what it will take to get through this challenging period to a period of new growth in 2025. “What our customers and business owners in the market are experiencing as a result of higher inflation is that cash flow is king … the relationship that cash

has with viability is enormous, and liquidity will be really front of mind for a lot of business owners,” says Thomas. Brokers who can help business customers navigate higher rates and higher inflation will be the ones who add the most value. Thomas says business owners are likely to require more financing solutions that support their trade cycle and maintain liquidity levels. “They’ll be managing stock very, very tightly; they’ll also be looking really closely at management of their debtors and their creditors. And all of that will put a laser-light focus on their cash conversion cycle.”

While businesses are waiting for trading conditions to improve, Thomas is optimistic about the future for the growing number of brokers diversifying into Australia’s large and expanding commercial and business lending sector. “There are around 2.4 million SME customers in Australia. That’s a huge population,” he says. The size of the market means opportunities can be found across a range of industries. Thomas points out that Australia had three decades of uninterrupted economic growth until COVID and has a positive and entrepreneurial business mindset in general.

Thomas sees 2024 as a time for brokers to lay the groundwork for longer-term relationships by helping business customers ride out the current market cycle and set themselves up for future success. “It’s not about the moment, it’s about the future. We want long-term relationships, both with our brokers and our broker-introduced customers ... we’re building something together for a sustainable period.”

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For Thomas, it all comes down to being able to understand a customer’s business at a granular level, from its strategy to its current and projected financial performance – including profits and losses, balance sheets and forward cash flow projections. Understanding these elements fully requires a physical presence at the business, backed up by a solid knowledge of the financial tools available to assist. “When [brokers] are sitting in a client’s premises or walking the floor of the business, these opportunities are arising, these conversations are going on. The really great brokers will walk away with 10 questions that they’ll need to answer for their clients around solving those most immediate needs and coming up with creative solutions.” NAB can play a key role in this process. Brokers working with NAB have an edge in providing useful advice through the specialist bankers available to backstop brokers. They have “access to the best of NAB”, says Thomas. “If a broker is working with a farming customer, we are able to introduce a highly qualified and capable agribusiness manager in the region … if we’ve got a broker talking to a solicitor who is trying to restructure ownership of their law firm, we’re able to put a professional services banker in front of that.” NAB has an advantage in terms of its size and reach when it comes to matching bankers with particular business sectors. “We have more bankers in more places, we have the widest credit appetite in the market. And we are inspired to provide that level of service to brokers through our broker-aligned banker network, facilitated by our senior BDMs and BDMs across the country.” As well as offering easy access to sector specialists, NAB is invested in helping brokers develop their own banking knowledge. In 2023, NAB ran a pilot program providing credit workshops for broking partners and will expand the scheme in 2024 and beyond. The program is based on NAB’s training for its own senior bankers with a focus on credit, understanding balance sheets, profit and loss, and cash flows, using real-life examples. “We take the customer names out of those real-life examples, but we use the fundamentals of the customer’s experience, what that has meant for the way that they’ve asked for finance, and how they presented information. Then we work together in groups analysing the financial statements to get to a point where we actually present a credit proposal – it’s really interactive, and it’s a lot of fun.”

* NAB is Australia’s biggest business lender according to monthly banking statistics lending data (non-financial corporations) published by APRA, November 2023

Company Profile

1982

Year established

38,000

Full-time equivalent employees

56*

World rank among banks as measured by assets

21.7%

Market share of business lending in Australia

31**

World rank among banks as measured by market capitalisation

Bio

Spotlight

Milestones

Media

Accolades

Company Profile

Years in the industry

Based in

Melbourne

Favourite quote

“Today is a gift, and that is why it is called the present”

Chris Thomas

Executive – commercial broker and equipment finance sales at National Australia Bank

Businesses face an uncertain period as inflation drags on and rates remain high. But NAB knows what it will take to survive and thrive, says Chris Thomas

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“We have more bankers in more places; we have the widest credit appetite in the market”

Chris Thomas, NAB

2017 Hot List Recipient

2020 Hot List Recipient

2021 CEO of the Year

Accolades

Media

Milestones

2011

2012

2015

2016

2019

2021