NAB’s $139m loan ar­rangers

Bank grilled on scheme’s mort­gage mess

The Daily Telegraph (Sydney) - - News - ME­GAN NEIL

NATIONAL Aus­tralia Bank staff ac­cepted cash from “in­tro­duc­ers” — such as a gym owner and a tai­lor — and faked doc­u­ments for loans some cus­tomers could not af­ford, an in­quiry was told yes­ter­day.

There were also cases of bankers ac­cept­ing pay­ment from cus­tomers for loan ap­provals, the Fi­nan­cial Ser­vices Royal Com­mis­sion heard.

NAB ex­pects to pay at least $9 mil­lion and up to $23 mil­lion in re­me­di­a­tion to cus­tomers af­fected by the fraud and mis­con­duct by 60 bankers, in­clud­ing branch man­agers in West­ern Syd­ney.

Four peo­ple, in­clud­ing the gym owner and tai­lor, brought in $139 mil­lion in loans for NAB over four years un­der the bank’s in­tro­ducer pro­gram, which pays busi­ness­peo­ple out­side the bank for suc­cess­ful lend­ing re­fer­rals.

The four earned $630,000 in com­mis­sions, of which $488,000 went to one in­tro­ducer, doc­u­ments be­fore the royal com­mis­sion show.

In­ves­ti­ga­tions sparked by whistle­blower com­plaints in 2015 found sus­pected and iso­lated cases of cash pay­ments and kick­backs be­tween bankers and in­tro­duc­ers, in­clud­ing some­one who was not reg­is­tered as an in­tro­ducer.

Sev­eral bankers cre­ated false doc­u­ments and ac­cepted cash pay­ments, a Jan­uary 2016 NAB doc­u­ment said.

The royal com­mis­sion on Tues­day blew the lid on the trou­bled pro­gram, which in­cluded an al­leged net­work of rogue bankers op­er­at­ing in five branches across greater West­ern Syd­ney.

The clients of 60 bankers are be­ing ex­am­ined. Twenty bankers have left NAB.

A KPMG in­ves­ti­ga­tion found some bankers were help­ing cus­tomers pre­pare false pay slips, while some cus­tomers liv­ing in Aus­tralia claimed to be full-time em­ploy­ees in China.

By early 2016, NAB had iden­ti­fied six cus­tomers with $3.5 mil­lion in loans in

Our early in­di­ca­tions are that it is more likely to be at the lower end of those num­bers An­thony Wal­dron on the re­me­di­a­tion scheme

ar­rears, and 90 with $50 mil­lion in loans where there were con­cerns over their abil­ity to ser­vice the debt.

Se­nior coun­sel as­sist­ing the com­mis­sion Rowena Orr QC said many cus­tomers ended up with loans they should not have had and were not able to af­ford.

Se­nior NAB ex­ec­u­tive An­thony Wal­dron said there were some ob­vi­ous cases where that oc­curred.

The bank be­lieves 1360 cus­tomers may have been af­fected by the mis­con­duct. Mr Wal­dron said 71 per cent of af­fected cus­tomer files had been pro­cessed and the bank was about to be­gin its re­me­di­a­tion pro­gram.

NAB’s ex­ec­u­tive gen­eral man­ager of bro­ker part­ner­ships said ini­tially 26 cus­tomers will re­ceive of­fers, be­gin­ning over the next week or two.

The bank es­ti­mates it will pay be­tween $9 mil­lion and $23 mil­lion in to­tal. “Our early in­di­ca­tions are that it is more likely to be at the lower end of those num­bers,” Mr Wal­dron said. The royal com­mis­sion heard a July 2016 re­view also un­cov­ered other cases of fraud in­volv­ing a sig­nif­i­cant num­ber of bankers, out­side the greater West­ern Syd­ney area where the mis­con­duct was ini­tially un­cov­ered.

Pic­ture: Adam Head

NAB ex­ec­u­tive gen­eral man­ager of growth part­ner­ships An­thony Wal­dron.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.