re: why i bought nab - copydog An interesting...

re: why i bought nab - copydog An interesting post:
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You are talking about 4 majors in the region. The current problem with margin has come from some banks discounting to attract customers from other banks and NAB has been targeted.

In an oligopoly this behaviour will not succeed because what will happen is that all 4 majors will be affected and the sector be downgraded(such is the current case) - usually the one with the biggest pockets survives.

CEOs will learn very quickly to stay in place when they see the value of their performance options decline and boards will react quickly because their tenure will be on the line.

There was a price war in the mortgage market in 1997 and the current positioning in the hierarchy gives you an indication of who came out on top. NAB was aggressive in protecting their franchise and it will happen again if necessary and they have the clout.

The margins might decline in the short term but NAB will come out on top in the long run.
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This oligopoly (I like the word too) dates back to the '80s when the excreta hit the cooling device for all banks, but for WBC worst of all. They were technically insolvent and looked to the US where "fee for service" had become the norm and started charging for anything which could, remotely, be described as service.

In a purely commercial world the others could have killed WBC but in a political world it could not happen so they joined them and went down the "charge like a wounded bull" path and they have all prospered. De-regulation anyone?

Every bull runs out of puff and the banks are past their use-by.