Published: Sat, February 09, 2019
Economy | By

NAB's CEO & chairman to resign after inquiry criticism

NAB's CEO & chairman to resign after inquiry criticism

Chief executive Andrew Thorburn and chairman Ken Henry both said they would leave the bank in a statement to the Australian stock exchange released yesterday late afternoon.

The two were subject to scathing assessments in the report from commissioner Kenneth Hayne.

"If they really want to show they are serious about this I have taken cases to the banks that can be acted upon", he said.

"More particularly, I 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", he wrote. "As a result, I spoke with the board and offered to step down as CEO, and they have accepted my offer", Thorburn said.

While none of the banks emerged from the inquiry smelling of roses, NAB was singled out for stinging criticism for consistently failing to give a fair deal to customers, typified by behaviour at its wealth management arm which had levied $100 million in fees but failed to deliver any services in return.

Dr Henry tells 7.30 that he and Mr Thorburn are "deeply sorry".

Philip Chronican, a non-executive director of NAB and former ANZ executive, has been appointed interim CEO, while Ken Henry is expected to stay on until a new CEO is recruited.

"It has been an honour to be the CEO of NAB, and to have been part of NAB since 2005", Thorburn said.

"I acknowledge that the bank has sustained damage as a result of its past practices and comments in the royal commission's final report about them", Mr Thorburn said.

I can't tell you how many times I've relived that appearance, I understand the criticism.

"He's been in the industry for decades and understands the importance of aligning the customers' interests with the bank's. However, I recognise there is a desire for change".

Baird has been discussed as a potential candidate as NAB's future CEO since Thorburn hired him in 2017, six weeks after he surprisingly quit the NSW premiership and politics in general to spend more time with his family.

Thornburn appeared to be fighting for his job early this week, cancelling leave, but he admitted on Tuesday that he could not guarantee he would still have his position on Friday.

Henry said he and the Board had recognised change was necessary.

'The timing of my departure will minimise disruption for customers, employees and shareholders, ' he said.

"I recognise the important responsibility in stepping into this role at a hard time for NAB", he said.

Henry said he was proud of what the bank had achieved and equally disappointed about what the Royal Commission has brought to light in areas where the bank had not met customer expectations.

"Andrew and I are deeply sorry for our inability to do that and that's principally what has driven the decisions that have been taken today", he said.

Although Henry insisted the decision was "not made in reaction to any specific event", in a teleconference after the announcement Thorburn conceded it was those observations by Hayne that had "caused the discussions this week" leading to their resignations. It will also establish a board committee for customer outcomes.

'We are taking steps to earn your trust through action and now we will need to work through this report and implement the recommendations, ' he said.

The lender's shares were 1.26 per cent higher when trading was paused at 1514 AEDT on Thursday.

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