NAB ACCUSED OF MISS-SELLING
Lender issued A$24b in home loans under scheme involving falsified documents, says lawyer
THE first day of a powerful judicial inquiry into Australia’s scandalridden banking sector yesterday heard National Australia Bank Ltd issued A$24 billion (RM73.75 billion) in home loans under a scheme involving falsified documents.
It was the first bombshell of what promises to be an explosive year-long inquiry into the financial sector and especially the “Big Four” banks, which dominate the country’s A$1.7 trillion mortgage market.
Rowena Orr, a barrister assisting the Royal Commission inquiry in Melbourne, said NAB had derived more than A$24 billion in home loans from the scheme between 2013 and 2016, when the misconduct took place.
“The introducer programme was extremely profitable for NAB during the period where misconduct occurred,” said Orr, adding that it had involved about 60 bankers and branch managers, falsified loan documents, dishonest use of customers’ signatures and unsuitable loans to over 2,300 customers.
“The breadth of the misconduct, both in number of bankers and loans and the number of years over which the misconduct occurred, warranted further explanation in these hearings,” she said.
Orr said the misconduct at NAB went beyond the introducer programme and involved instances of collusion, fraud and bribes which were not reported to the regulator in a timely manner.
By November 2015, she said NAB knew of “significant failings in its risk management systems... across multiple branches and people within very senior positions in those branches”.
Even so, neither the bank’s board nor the Australian Securities and Investment Commission, the corporate watchdog, had been informed as required by law.
NAB chief executive Andrew Thorburn said in a statement yesterday that the problems were “regrettable and unacceptable”.
The inquiry follows years of scandals in Australia’s financial sector, including poor financial advice, interest-rate rigging, and accusations of money-laundering.
Commonwealth Bank of Australia executives will be probed later this week about fraudulent broker arrangements and loan applications.