Breaking up from the other banks appears to be driving a positive customer response and positive momentum in National Australia Bank’s (ASX: NAB) business.

NAB launched its Break Up campaign on February 15. In the past three weeks since then, the bank said it has seen significant increases in new transaction account openings, credit card applications, mortgages inquiries and mortgage re-finance applications from customers of other banks wanting to switch to NAB.

Addressing an NSW Australian Israel Chamber of Commerce (AICC) function at the Westin Hotel in Sydney earlier today, NAB CEO Cameron Clyne said "We've had a 20 per cent increase in transaction accounts and that is off the back of a six-fold increase we had last year, a 50 per cent increase in credit card applications, 35 per cent increase in mortgage enquiries and a 45 per cent increase in mortgage re-finance applications. That tells you that the public are hungry for change."

When asked if NAB will match Westpac's commitment to cut rates when funding costs ease, Mr Clyne said NAB’s customers are already significantly better off than Westpac’s.

"We won’t ask our customers to wait until 2013-1014, we did it in 2009. Our customers are already 18 basis points better off than Westpac.

“We think you should share it all the way through. As wholesale funding costs go down, I think we stand by our record as being the most competitive bank on standard variable rates. Our customers don’t have to wait, they're already seeing the benefit. That’s why we broke up [with the other banks]."

Westpac CEO Gail Kelly said earlier in the week that as soon as the cost of wholesale funding, Westpac will cut interest rates independent of the RBA.

Mr Clyne also expressed his disapproval to accusations that NAB is destroyingindustry profitability, saying NAB has done more to protect industry profitability in the past two years than anyone else

"The thing that really gets on my nerve, is this nonsense that NAB is destroying industry profitability. If you want to see industry profitability destroyed, get a Government involved.

“Government’s have blunt instruments, right, now sometimes those blunt instruments are needed to achieve real change. But the sort of tools they would use to bring about reform in banking, in many cases, now some of the stuff that they’ve got at the consumer end is stuff that is happening around the world is a different story, but some of the blunter instruments that are being used to bring about reform would do far more damage to industry profitability than the banks just competing on their own terms.

“So our argument is to the contrary, NAB has done more to protect industry profitability in the past two years than anybody else," Mr Clyne said.