NAB in bribe claim
Townsville ROGUE National Australia Bank staff falsified documents to secure mortgages for customers in return for cash bribes paid across the counter, the banking royal commission has heard.
Counsel assisting the commission Rowena Orr QC has turned a blowtorch on the NAB “Introducer” program, where the bank pays commissions to businesses that refer customers who then take out loans.
The alleged network of rogue bankers operated in five branches across greater western Sydney, the commission heard yesterday.
It was the first session for a twoweek public hearing examining consumer finance products as part of the year- long Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Questioning NAB executive general manager for broker partnerships Anthony Waldron, Ms Orr noted the Introducer program had generated $ 24 billion worth of business.
But it had been marred by rorting, she revealed, including cases where pay slips were been forged, bribes were paid to staff, and customers’ signatures were faked.
While the program was meant to be for businesses such as financial planning, architectural and real estate agencies, Ms Orr said there were instances of gym instructors acting as “introducers”.
“Let’s be frank: there was fraudulent conduct by ( some) NAB bankers and introducers,” Ms Orr put to Mr Waldron. “Yes,” he said. Mr Waldron was appointed to his current role in 2016 after the problems were discovered.
One whistleblower contacted NAB in October 2015 and said there was a network of five rogue branches in greater western Sydney.
Staff embroiled in the scheme in- cluded some managers, the whistleblower said.
Bribes of $ 2800 were paid “in white envelopes over the counter” at some branches, it was alleged.
“People are being promoted on the basis of home loans and lending – it appears they are smashing targets but some of it is false,” said one whistleblower email read by Ms Orr at the hearing yesterday.
She told the commission two whistleblowers approached NAB about the problems at those branches.
Last November, NAB revealed it had sacked 20 bankers and taken action against 32 others – including slashing pay – after a review uncovered inaccurate and incomplete documentation for 2300 home loans. The sacked bankers were in Melbourne and Sydney.
Former High Court judge Kenneth Hayne, who is leading the commission, queried why it took until February 2016 for NAB to notify regulators of that situation, noting five people had already been sacked by November 2015.
Banks are required to report such issues to the corporate regulator, the Australian Securities and Investments Commission, within 10 days.
Mr Hayne also said the commission may look at “the attitude participants in the industry ( have) in relation to obedience to the law”.
“There may be a difference between a breakdown in controls and an acknowledgment of a breach of laws.”
The Commonwealth Bank was also scolded for handing over inadequate material on its past misdeeds.
“( The first CBA submission) had a high level and general approach. It did not go into detail as a number of other entities had done,” Ms Orr said.
The bank then provided a spreadsheet with details of cases going back five years, she said, but “the volume of information made it hard to assess misconduct”.
Ms Orr also raised concerns over the level of detail CBA provided about its mortgage broker subsidiary Aussie Home Loans. In the bank’s first submission, just eight paragraphs in the 50- page document were devoted to the mortgage broker operation.
“Aussie Home Loans acknowledged no misconduct in the last 10 years,” Ms Orr said of that submission. A second submission looking back over five years recognised seven breaches of responsible lending practices.