National Australia Bank signals it could "nab" future rate cuts

The National Australia Bank has indicated that future interest rate cuts might not be passed on in full.

At its annual general meeting in Adelaide today, NAB chairman Michael Chaney was the latest bank chief to warn that the debt crisis in Europe was pushing up the cost of sourcing money on global markets.

At a press conference after the meeting, chief executive Cameron Clyne said funding costs were a "major driver" of interest rate decisions.

"What we pay our depositors and what we pay to source offshore funds is a very important determinant of costs, and those costs are rising," Mr Clyne said.

Read my coverage on ABC News Online and my analysis broadcast on The World Today.

Mr Chaney was forced to justify the NAB's use of the government's guarantee on bank deposits in light of multi billion dollar profits.