NAB’s dodgy loans a gold-plated earn
A NATIONAL Australia Bank program at the centre of misconduct allegations brought in $24 billion in home loans, the royal commission into banking heard.
Sixty bankers were involved in misconduct connected to NAB’s “introducer program” between 2013 and 2016, the financial services royal commission heard. The program involved paying commissions to people outside the bank for successful lending referrals.
Senior counsel assisting the commission Rowena Orr QC said 60 bankers, including branch managers, were involved in misconduct.
It included falsified loan documents, dishonestly putting customer signatures on forms approving introducers’ commissions and the provision of unsuitable loans.
“The introducer program was extremely profitable for NAB during the period when the misconduct occurred, bringing in over $24 billion in home loans from 2013 to 2016,” Ms Orr said.
Senior NAB executive Anthony Waldron agreed there was fraud.
The bank told the commission its incentive structure and targets contributed to a small number of people choosing to behave unethically.
Mr Waldron, the bank’s executive general manager for broker partnerships, said the conduct differed for each banker involved.
“But what we saw in the case of some bankers is that they created relationships that potentially didn’t exist between a banker and introducer for the purposes of creating a payment to an external third party,” he said.
The external third party had some relationship with the banker, he said.
Up to 2500 home loans may have been submitted without accurate information or documentation.
The introducers are meant to be financial planners, accountants, property developers, solicitors, builders or architects.
The introducers involved in the misconduct came from outside those industries, the inquiry heard.
National Australia Bank CEO Andrew Thorburn said the bank had made changes to the introducer program.
“While many of the details of this issue are already known, the focus of the royal commission will again demonstrate that what occurred is regrettable and unacceptable,” Mr Thorburn said in a statement issued ahead of yesterday’s public hearing.
Twenty bankers were sacked or resigned, while others were reprimanded.