NAB’s $139m loan arrangers
Bank grilled on scheme’s mortgage mess
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.
NAB executive general manager of growth partnerships Anthony Waldron.