Banks follow NAB lead and lower business loan rates

Banks are accepting lower margins on business loans at a time when big business holds highly divergent views from small business over the economic outlook. Few of the top 500 companies plans to borrow to fund capital expenditure, but more than three quarters of middle market and small businesses plan to do so. A survey by East and Partners and investment bank JP Morgan found evidence of predatory and defensive pricing strategies, as banks respond to price cuts instigated by National Australia Bank in the business market. NAB has cut the spreads charged on many loans to revive market share following a slump last year.

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