NAB CEO Andrew Thorburn says his bank is working hard to win back the trust of its customers.
“We are in a position of trust,” Thorburn told the House of Representatives Standing Committee on Economics today.
“We have high standards and if they are not met, there are consequences.”
The parliamentary committee is conducting a second round of public hearings as part of a review of the performance of the banking and financial system.
Liberal MP David Coleman, the committee chairman, opened questioning by asking whether any senior executive lost their job as a result of issues, including poor financial planning advice to customers, at the bank.
“The buck needs to stop with senior executives,” Coleman said.
The committee has proposed that breaches of a bank’s licence be reported publicly and that any consequences to the executive responsible be revealed.
NAB has rejected this, saying the current system, where breaches are reported to the corporate regulator ASIC, is working well.
However, Cameron said: “The committee feels strongly that there needs to be legislation in this area.”
Thorburn replied that the bank last year had 1138 staff facing breaches of the code of conduct and 55 had left the bank for misconduct, including two senior managers.
“We are working in the industry on the so-called bad apples (financial planners) register,” Thorburn said.
Labor MP Matt Thistlethwaite questioned the NAB on its senior executive pay, including that of Andrew Hagger, the bank’s Chief Customer Officer.
According to the annual report, Hagger was paid $4.08 million in 2016, about $3 million in incentives and other payments.
However, Thorburn said Hagger had been brought in to fix problems and had been doing a good job.
“One misconduct, one poor advice to customers, is one too many,” Thorburn replied.
“We have 55 planers in 2009-15 who have left the bank for misconduct.
“We hold people to account.”
Thistlethwaite pointed to the $15 million paid out in compensation to customers.
“I fail to understand why you say Mr Hagger did a good job,” said Thistlethwaite.
The banks have been widely criticised for not passing on the full benefit of interest rate cuts.
They have also been hit by a series of scandals including faulty financial planning advice to customers, restricting payouts for disability insurance claims and allegations of rigging the bank bill swap rate (the Commonwealth is excluded from this one).
At the first parliamentary hearings in October, the CEOs admitted to the past shortcomings in their organisations, apologised and promised to do better.
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