About 300 staff of National Australia Bank have been fired or left the company as a result of internal investigations into wrongdoing, Chief Executive Andrew Thorburn said on Friday (Oct 19), following public revelations of misconduct across the sector.
|A pedestrian walks past a branch of the National Australia Bank (NAB) in Sydney on May 5, 2016. (Photo: AFP/Peter Parks) |
Thorburn said he was ashamed of the bank's behavior and admitted he had been wrong to oppose a commission of inquiry which has exposed scandal after scandal in the country's greed-driven banking culture.
"It's been a particularly difficult and shameful year," Thorburn told a parliamentary committee in his first public comments since the quasi-judicial inquiry began hearing evidence of financial sector wrongdoing earlier this year.
More than 1,200 staff had been questioned about their adherence to the bank's code of conduct as part of the internal probe, he said. Seven hundred of those questioned were found wanting and over 300, or less than 1 per cent of total staff, were "either terminated or have left," Thorburn said.
"If there's anybody who's committed a fraud or absolute clear misconduct they're terminated immediately and files in many cases are handed straight to police," he said.
A NAB spokeswoman declined to provide further detail about which department the staff worked for or what jobs they held.
Thorburn added however that "very few" of the terminations were at executive level. NAB has slashed executive pay and announced the departure of its top consumer banking executive last month after the inquiry uncovered misdeeds in his department.
The comments encapsulate just how far the sector has shifted, from defiance before the explosive inquiry began in February, to contrition and apology. Thorburn was the fourth boss of a major bank to appear before the committee in recent weeks, and the fourth to express regret at past misdeeds.
Last week, Australia and New Zealand Banking Group's head told the committee his bank had fired more than 200 staff for wrongdoing. The heads of Commonwealth Bank of Australia and Westpac Banking Corp were also apologetic.
The powerful public inquiry heard NAB's wealth management arm had charged hundreds of thousands of retirees for financial advice they never received.
The banks, including NAB, have now set aside hundreds of millions of dollars for refunds, legal costs and compliance charges arising from the inquiry.
The gusher of scandals and malfeasance uncovered, and the expectation that fines and regulations will follow has already knocked almost A$55 billion (US$39 billion) from the market cap of the big four banks, and Thorburn said it had spooked international investors.
"They're probably requiring higher prices for us to borrow the money or they're a little more reluctant to get as heavily involved at the moment," he said.
NAB shares edged 0.3 per cent lower on Friday, in line with the broader market .
Separately on Friday, the head of Australia's corporate watchdog said banks were still too slow to respond to concerns about potential breaches.
"Whilst we are hearing important acknowledgements from leaders of financial institutions about change, such change is not happening as quickly as it should," Australian Securities and Investments Commission Chairman James Shipton told a separate parliamentary committee.
"ASIC is still experiencing slow and delayed responses from financial institutions and, in some cases, overly technical responses aimed at delay."