Rival banks say a "significant number" of National Bank customers have switched providers since ANZ announced it would drop the brand.

But ANZ says it is untrue: "We always have people that are coming in, people going. We've noticed no change in those numbers," a spokesman said.

The bank last week confirmed it will drop National Bank, with the brand to be gradually phased out over the next two years.

Competing banks immediately jumped at the opportunity, launched advertisement campaigns and started a mortgage war.

"How do you tell your new bank what you think of their behaviour? Make them your old bank," TSB Bank said, in an ad.

TSB chief executive Kevin Murphy today said the marketing strategy had paid off.

"Our branches are reporting significant increase activity. A number of customers have already made the decision that they are moving, and that's really encouraging. A lot of it is attributed to the advertising campaign."

Murphy would not give details on how many National Bank customers TSB had gained saying it was commercially sensitive.

"It's certainly exceeding expectations,'' he said.

National Bank customers were also heading to Kiwibank, its spokesman Bruce Thompson said.

"There is a degree of turmoil and therefore they are shopping around, we don't actually ask them why."

He said in the past, Kiwibank did not get a lot of National Bank customers as they were "quite loyal", but this has changed.

"In the last week, we've had a significant increase and I guess it's because of what has happened."

Banks have also dropped mortgage rates following ANZ's decision to scrap the National Bank brand.

Kiwibank was first up, introducing a special fixed mortgage rate offer of 4.99 per cent for all rates two years and under last Thursday.

TSB offered a two-year fixed rate of 5.3 per cent, while ASB dropped its two-year fixed home loan rate from 5.45 per cent to 5.25 per cent - the lowest non-special rate on the market.

Thompson said the mortgage rates drop may have encouraged National Bank customers to shop around, but "you never know" what makes them switch.

"Some think about it for not only months, but even years and then something will trigger it,'' he said.

- © Fairfax NZ News

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