Inquiry will bring ‘closure’ – NAB chief

NATIONAL Australia Bank chairman Ken Henry says the major lenders ultimately had no choice but to ask for a royal commission into the scandal-riddled industry.

Speaking at the group’s annual meeting yesterday, Mr Henry said the Turnbull Government’s dogged resistance to a royal commission ended at the request of the big banks.

“While we have consistently argued that further inquiries were unwarranted — and I continue to be of that view — the time had come for us to call for stability,” Dr Henry said.

The instability caused by the lingering prospect that a commission was looming came to be worse than a commission itself, he said.

Support for a commission had been growing in the Senate but Prime Minister Malcolm Turnbull announced the move only late last month after receiving a co-signed letter from all four big banks.

Dr Henry said banks’ access to overseas funding became more expensive relative to the sector’s perceived weakness.

Australian banks use funding from overseas investors heavily as a source of the cash they lend at home to businesses and homebuyers.

“We rely on our offshore investors to provide sources of funding so that we might undertake these activities,” Dr Henry said.

The Federal Government announced the royal commission into misconduct in the winder financial services sector on November 30.

NAB chief Andrew Thorburn said yesterday that a royal commission would bring closure and certainty for a sector struggling to regain consumer trust and would help NAB serve customers better.

“It is significant . . . and I really think it is important we do get some closure and some certainty — and I think it will bring that,” Mr Thorburn said.

Shares in NAB closed 13c lower yesterday at $29.69.