Australia’s NAB says incentives ‘root cause’ of fraud

SYDNEY, March 14, (RTRS): National Australia Bank Ltd’s system of bonuses and incentives encouraged bankers to engage in fraudulent lending practices to boost their incomes, NAB told a powerful judicial inquiry into the scandal-ridden sector on Wednesday.

Scrutiny of the bank’s various incentive schemes dominated the second day at the Royal Commission in Melbourne, where the country’s fourth-biggest bank conceded falsified mortgage documents were used to help people collect bonuses and commissions and beat sales targets.

“So from a very early point, NAB was aware that a driver for these ... fraudulent behaviours was its own remuneration structure,” barrister Rowena Orr told the inquiry.

Under questioning, senior NAB executive Anthony Waldron said the structures were “certainly one of the root causes”.

The year-long inquiry promises to shed light on the inner workings of some of Australia’s biggest companies, and has the power to recommend tighter regulation and criminal prosecutions.