A major bank ceased trading on the ASX yesterday pending an announcement on “leadership changes”, following a scathing Royal Commission report.
The stock exchange has said that NAB was in a trading hold. It was later revealed that both the NAB CEO Andrew Thorburn and chairman Ken Henry would be stepping down from their roles.
The pair featured heavily in the media over the last few days following the final report of the Royal Commission, when Commissioner Kenneth Hayne slammed the bank for not understanding the gravity of the situation.
Both Thorburn and chairman Dr Henry were accused of not doing enough to resolve issues.
Hayne said in the report, “Having heard from both the CEO, Mr Thorburn, and the Chair, Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned.
“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.
“I thought it telling that Dr Henry seemed unwilling to accept any criticism of how the board had dealt with some issues.
“I 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 by NAB and NULIS on this account is likely to be more than $100 million.
“I thought it telling that in the very week that NAB’s CEO 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.”
The NAB board will now initiate a global search process for the CEO role while actively considering a range of internal candidates.
Thorburn will finish at NAB on 28 February 2019. Dr Henry indicated he would retire from the Board once a new permanent CEO had been appointed.
The Board has asked Philip Chronican, a current NAB Director with extensive domestic banking experience, to serve as acting CEO effective 1 March (subject to relevant regulatory approvals) until a permanent appointment is made.
Thorburn said: “It has been an honour to be the CEO of NAB, and to have been part of NAB since 2005.
“I have had a number of conversations with the Chairman 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 about them.
“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. As a result, I spoke with the Board and offered to step down as CEO, and they have accepted my offer."
Dr Henry said he and the Board had recognised that change was necessary. “The timing of my departure will minimise disruption for customers, employees and shareholders,” he said.
“This is naturally a difficult decision but I believe the Board should have the opportunity to appoint a new Chair for the next period as NAB seeks to reset its culture and ensure all decisions are made on behalf of customers.
“I am enormously proud of what the bank has achieved and equally disappointed about what the Royal Commission has brought to light in areas where we have not met customer expectations. Andrew and I are deeply sorry for this. My decision is not made in reaction to any specific event, but more broadly looking at the bank’s needs in coming months and years."