CEO of National Australia Bank steps down amid scandal.
Andrew Thorburn, CEO of National Australia Bank (NAB), resigned in February in the wake of a damning probe into misconduct in Australia’s banking, superannuation (pension) and financial-services industries.
Thorburn is perhaps the most powerful figure brought down so far in the 13-month-long inquiry into misconduct in the banking, pensions and finance industries. Recruited by NAB in 2005 as head of retail banking, he was promoted to country head of its New Zealand operations before becoming group chief executive in 2014. Under his watch, however, NAB was widely seen to have developed a culture of greed.
Thorburn and NAB chairman Ken Henry—who was credited with helping Australia through the global financial crisis as head of Treasury—attracted particular attention for their apparent lack of contrition in the witness box. Kenneth Hayne, a former High Court justice who headed the inquiry, noted in his final report that he was “not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly.” Both Henry and Thorburn announced their resignation on February 7.
The proceedings were webcast live. The sight of bank executives in the glare of unrelenting questioning caught the attention of the public, as did admissions of practices such as charging fees for no service (FFNS) to customers, including the estates of long-dead customers. Evidence showed this practice was both deliberate and profitable. The cost to NAB’s customers of FFNS alone is estimated at more than A$100 million (US$71.2 million), which the bank has promised to repay.
NAB was by no means the only institution singled out in the inquiry. Other high-profile scalps include CEO Craig Meller and Chairwoman Catherine Brenner of AMP, Australia’s largest wealth manager. They left last April over staff revelations to the regulator that AMP had charged fees for no service on more than 20 occasions. Hayne’s report disclosed recommendations for a further two dozen prosecutions, including of employees at three of Australia’s four major banks.