Bank heavyweights gone: Both NAB bosses quit after scathing report

The banking royal commission reserved its harshest criticism for NAB chief executive Andrew Thornburn and chair Ken Henry, and now both have quit.

The first major scalps of the banking royal commission’s damning final report have been claimed, with NAB chief executive Andrew Thorburn and chair Ken Henry confirming they will both resign.

The report handed down on Monday reserved particular scorn for the two executives, with Commissioner Kenneth Hayne saying NAB “stands apart” from the other three major lenders.

The bank released a statement to the ASX Thursday afternoon saying Mr Thorburn would be stepping down at the end of February, while Dr Henry will remain in his role until a new CEO was appointed.

NAB boss Andrew Thorburn cancelled his leave after the scathing comments were levelled at him from Commissioner Hayne.

The NAB board has asked current director Philip Chronican to serve as acting chief executive from March 1 until a permanent replacement is found.

In a media conference call held after the announcement, Dr Henry said he’s “had to reflect in recent times overwhelmingly on our inability to meet community and customer expectations”.

He said a global search will be conducted for the new permanent CEO position, but said the board is “very confident there are a number of high quality executives on our current leadership team”.

He also said he’ll have a “very strong role” in the selection of the new CEO, although it would ultimately be a board decision.

Mr Thorburn said leadership at NAB “clearly needs to get better”, noting that “we’ve fallen short”.

He said he offered to step down to help the board with its desire for change, adding that he has “no bitterness” about the decision. “I accept the board has the right to make that decision in the best interest of the company.”

Mr Thorburn said the decision to resign came over the last 48 hours, adding that “we don’t want to create a crisis”.

Dr Henry also denied he was resigning due directly to pressure from investors to step down. “Obviously we’ve been in touch with investors over the course of this week. It’s just one of many factors that we have taken into account in coming to these positions. I’m not aware of any pressure from investors to have us step down. In my case I haven’t spoken to investors directly.”

They also said they had not spoken to either Prime Minister Scott Morrison or Treasurer Josh Frydenberg prior to their decisions.

Both Mr Thorburn and Dr Henry had been in the spotlight after Commissioner Hayne wrote in his final report he was less confident the two leaders at NAB had learnt any lessons from the inquiry into the sector.

“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.

“Overall, my fear — that there may be a wide gap between the public face NAB seeks to show and what it does in practice — remains.”

NAB chairman Ken Henry was criticised for his performance when grilled during the royal commission.

Chief executive since August 2014, Mr Thorburn had resisted criticism of his leadership but said in a statement on Thursday he had come to the decision to call it quits after conversations with the chairman.

“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,” he said.

“AS CEO, I understand accountability.”

Dr Henry said the staggered nature of the departures of he and Mr Thorburn was designed to minimise disruption for customers, employees and shareholders.

“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.”

Mr Thorburn’s future had been subject to speculation since he announced surprise plans to take leave around the release of the Hayne report.

He was also shaken last year by allegations an employee he considered a friend was involved in a multimillion-dollar fraud against the lender.

On Tuesday, he said he was cancelling the remainder of the two months’ leave he started over the Christmas period and took aim at suggestions his absence indicated a lack of nerve or commitment.

“I’ve got a marriage, I’ve got children I’ve got elderly parents: they’re the people who I want to spend some time with,” Mr Thorburn said.

“I think that it is important for mental and physical health to lead in a sustainable and long-term way; I want to role model to people inside the company that that’s OK to do.”

Radio host Alan Jones threw Mike Baird’s hat in the ring saying the former NSW premier would be a ‘very good CEO’.

He would not be drawn on speculation that NAB consumer bank boss Mike Baird — the former NSW premier he hired less than two years ago — could replace him.

2GB Radio host Alan Jones said Tuesday that Mike Baird “would be a very good CEO”, while current NSW Premier and Mr Baird’s former treasurer Gladys Berejiklian called him “an outstanding individual”.

Since replacing Cameron Clyne as CEO, Mr Thorburn has overseen the divestment of the bank’s unprofitable Clydesdale Bank and 80 per cent of its MLC wealth management business, and embarked upon a $1.5 billion restructure that will trim 4000 jobs over three years.

But NAB shares have fallen 26 per cent during his tenure and he took a $2 million pay cut in the last financial year after the lender’s full-year cash earnings fell 14.2 per cent and the bank owned up to its poor treatment of customers.

The lender’s shares were 1.26 per cent higher when trading was paused at 3.14pm AEDT today.

Dr Henry will face a Leigh Sales grilling on the ABC’s 7.30 tonight in his first interview since the commission’s findings were released.

— with AAP

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