The soon-to-be National Australia Bank Ltd (ASX: NAB) Chairman and current interim CEO Philip Chronican has outlined where he sees potential growth for NAB. However, the NAB share price is down more than 1%.

NAB is one of the four largest financial institutions in Australia in terms of market capitalisation, earnings and customers. However, in 2018, it was Australia’s largest lender to businesses and has operations in wealth management and residential lending.

Where NAB hopes to find growth

Mr Chronican, replacing Dr Henry, believes that NAB will be best suited to sticking to its traditional strength of its business bank, according to Australian Financial Review reporting.

There is still strong appetite for lending for business, particularly in light of stricter lending conditions after the Royal Commission and increased regulations from APRA.

Mr Chronican is quoted by the AFR as saying: “We will focus on a business banking-led growth strategy. NAB’s business bank, the largest in the country and our competitive advantage, is growing and performing well.”

NAB has been known to providing funding for some of the fastest growing businesses on the ASX such as Afterpay Touch Group Ltd (ASX: APT) and REA Group Limited (ASX: REA).

The big four ASX bank lends nearly $3 billion a month to 250,000 customers which are small or medium businesses, which is twice the average of the other big banks of Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA).

Two of the main ways that NAB is looking to boost profit margins is by increasing the amount of automation used by the bank and making 6,000 staff redundant.

Are NAB Shares A Buy?

Some investors believe that with a skilled ex-banker at the helm in the form of Mr Chronican, such as Matthew Haupt from Wilson Asset Management, NAB could be the one to own because it’s relatively cheap and has a large fully franked dividend of 8%.

But, I would rather focus on smaller ASX shares that have much more growth potential.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).