Andrew Thorburn quits as NAB CEO after inquiry lashing

Ken Henry, the lender's chairman, will also leave once a permanent CEO has been appointed; the pair are the highest-profile victims of a misconduct inquiry

Published Thu, Feb 7, 2019 · 09:50 PM
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ANDREW Thorburn resigned as chief executive officer of National Australia Bank (NAB), just days after the financial industry misconduct inquiry questioned whether he was capable of leading the lender's response to a series of scandals.

Mr Thorburn will finish Feb 28, the bank said in a statement on Thursday, adding it will start a global search for a replacement, while also considering internal candidates. Board member Philip Chronican will serve as acting CEO.

Chairman Ken Henry, who was also lashed by the inquiry, will leave once a permanent CEO has been appointed. The pair are the highest-profile victims of the Royal Commission, which had previously triggered a boardroom purge at wealth manager AMP Ltd.

Separately, the bank said it would delay the planned sale of its MLC wealth and financial advice unit until fiscal 2020.

The inquiry heard NAB employees accepted cash bribes to approve fraudulent mortgages in order to "smash" sales targets. The Melbourne-based lender was also found to have charged fees for services that weren't provided.

It then downplayed the extent of the wrongdoing to the regulator as it sought to avoid a report on the issue overshadowing its earnings release. That led to the September departure of consumer banking head Andrew Hagger.

In his final report released on Monday, commissioner Kenneth Hayne questioned whether NAB is "willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do," and berated Mr Thorburn and Mr Henry for their performance in the witness box.

"Having heard from both, I am not as confident as I would wish to be that the lessons of the past have been learned," he wrote.

Mr Thorburn was the longest serving of Australia's big-four bank CEOs, having taken the top job in August 2014 after running the lender's New Zealand unit for six years.

Mr Henry has served as chairman since December 2015, having joined the bank's board in 2011.

Before that, he was the nation's top finance bureaucrat, and was one of the main architects of the stimulus package that helped Australia dodge a recession during the global financial crisis.

His testimony was also excoriated by Mr Hayne, who said Mr Henry "seemed unwilling to accept any criticism of how the board had dealt with some issues".

Mr Henry said his departure will help lead to a renewal of the board. "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," he said in the statement.

Mr Thorburn isn't the first National Australia CEO to be undone by scandal.

In 2004, Frank Cicutto stepped down after a foreign currency-trading scandal cost the bank A$360 million (S$347 million). BLOOMBERG

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