NAB resignations following Hayne report
AUCKLAND: National Australia Bank’s chairman Ken Henry and chief executive Andrew Thorburn have fallen on their swords in the wake of Kenneth Hayne’s final report on his royal commission on financial services, which was delivered on Monday.
Mr Thorburn, who used to be chief executive of NAB’s New Zealand subsidiary, Bank of New Zealand, will leave on February 28 and Mr Henry will depart once Mr Thorburn’s successor has been appointed.
The board has asked Dunedinborn NAB director Philip Chronican — who has extensive Australian banking experience, including 35 years at ANZ Bank and at Westpac before that — to serve as acting chief executive from March 1 until it appoints a permanent replacement.
Mr Hayne’s report railed against institutions’ ‘‘unwillingness to recognise and accept responsibility for misconduct’’ and against the way they dragged their heels in responding to misconduct and compensating affected customers.
He singled out NAB for particular criticism, saying it ‘‘stands apart from the other three major banks’’ and that, after hearing from Mr Henry and Mr Thorburn, ‘‘I am not as confident as I would wish to be that the lessons of the past have been learned.’’
Mr Hayne ‘‘thought it telling that Mr Thorburn treated all issues of fees for no service as nothing more than carelessness combined with system deficiencies when the total amount to be repaid . . . is likely to be more than $A100 million [$105 million].’’
He also thought it telling ‘‘that in the very week that NAB’s chief executive and chair were to give evidence before the commission, one of its staff should be emailing bankers urging them to sell at least five mortgages each before Christmas.’’
In the announcement of the pair’s resignations late on Thursday, Mr Thorburn said: ‘‘It has been an honour to be the CEO of NAB and to have been part of NAB since 2005.’’
Mr Thorburn started as NAB’s chief executive on August 1, 2014 after serving nearly six years as BNZ’s chief executive. One of his most memorable decisions while at BNZ was that the bank stop dealing with mortgage brokers — at the time, only about 5% of BNZ’s mortgages were written by mortgage brokers compared with an estimated overall 25% market share for brokers.
That decision was reversed in 2015 after 12 years and lending through mortgage brokers and, by September last year, mortgage brokers accounted for more than 15% of BNZ’s mortgage book — brokers are now estimated to have north of 40% overall market share now.
Mr Thorburn had been on holiday until just before Mr Hayne’s report landed and he cancelled plans earlier this week for another two months’ holiday.
Mr Thorburn said on Thursday he had several conversations with Mr Henry this week.
‘‘I acknowledge that the bank has sustained damage as a result of its past practices and comments in the royal commission’s final report,’’ he said.
‘‘As CEO, I understand accountability. I have always sought to act in the best interests of the bank and customers and I know that I have always acted with integrity. However, I recognise there is a desire for change.’’ — BusinessDesk