NAB’s British mortgage miscalculations
Many of National Australia Bank's customers have been slapped with bigger monthly payments after one of the nation's major financial institutions incorrectly computed repayments for some variable and tracker-style mortgages.
Around 18,000 British clients of NAB's Clydesdale and Yorkshire subsidiaries have been left with a deficit on their mortgages, and have all been demanded to pay the revised monthly amount and an additional sum to meet the amount of shortage.
A total of £19 million ($A32.8 million) has been underpaid, with an average home owner shortfall amounting to £800 per loan. Some individuals face reparation running to an additional $518 a month to bring their mortgages back on track.
Clydesdale Bank announced there were several options available to clients such as making a one-off restitution to cover the deficit or prolonging their mortgage term.
Both banks were handling matters on a case-by-case basis. Clydesdale has also been in discussions with the British bank regulator over the concern.
With £12.3 billion in mortgage assets or 1 per cent of the total market, NAB is a relatively small player in the UK. Its British arm generated less than 5 per cent of the Australian firm's first-half cash earnings of $2.2 billion.
Data from Deutsche Bank this week cautioned that the UK's banking market faced difficulties, including a tougher suppression by regulators and the sight of increasing interest rates.
It, however, also said the retail banking sector stayed pleasant, with indications of an developing mortgage market.