Low interest rates boost Big Four's popularity

by AB31 Mar 2014
Interest rate reductions for home loan customers have boosted the Big Four’s popularity with consumers to the highest level in 18 years.

The satisfaction level of the personal customers of banks was 81.6% in February, which is no change since January but enough to equal the highest level in the 18 years that Roy Morgan Research has carried out the survey of 50,000 people per annum.

The big four banks scored 80.1% satisfaction and the other banks scored 84.8%.

The major reason for the big four’s improvement over the last 12 months ( up 1.3 percentage points) has been the interest rate reductions for home loan customers, who have increased their satisfaction rating by 3.5 percentage points compared to an increase of only 0.8 percentage points for their other customers, Roy Morgan said.

In the six months to February, CBA maintained its top ranking of the big four with 82.1% satisfaction, followed by NAB (80.3%), Westpac (78.0%) and ANZ (77.9%).

The smaller banks, however, were the overall pace-setters with 14 banks scoring higher than the best of the big four, with the leader Teachers Mutual Bank at 91.2% satisfaction.

Over the last month, CBA, NAB and ANZ satisfaction ratings remained unchanged, and Westpac showed a small decline (down 0.5 percentage points).

Over the last 12 months, ANZ and CBA showed the largest improvement in satisfaction (both up 1.7 percentage points) followed by NAB (up 1.1 percentage points) and Westpac (up 0.3 percentage points).

Roy Morgan industry communications director Norman Morris said the home loan interest rate reductions over the last two years have been driving big improvements in customer satisfaction.

“But with no change in rates since August 2013, it appears that the impact of these reductions is wearing off, with satisfaction among home loan customers of the big four banks declining in January and February this year.

“The majority of bank customers do not have a home loan and will be looking for improvements in areas such as fees, service, products and higher interest rates.

“It will be important therefore when interest rates eventually rise that this group receive the full increase just as home loan customers expect to receive the full reductions when the cash rate declines.”

The increased use of internet banking is also boosting customer satisfaction levels.