'Successes and failures': Hagger leaves NAB in executive shake-up

Long-serving National Australia Bank executive Andrew Hagger is leaving the bank as it continues to grapple with the "fees-for-no-service" scandal that has rocked the industry, saying he took "accountability" for the "successes and failures" that occurred on his watch.

His exit, amid a broader executive reshuffle, comes as NAB prepares to demerge the troublesome wealth arm he previously ran, amid revelations at the banking royal commission that it charged hundreds of thousands of retirees for financial advice they never received between 2012 and 2017.

Andrew Hagger after last month's royal commission hearings.Credit: James Ross

The remainder of his job – the high-profile consumer banking arm – will be taken over by former NSW premier Mike Baird, who moves from the institutional division.

Despite Mr Hagger's October 1 departure occurring soon after his second appearance at the royal commission into financial misconduct last month, NAB sources insisted his exit was not connected.

Mr Hagger had spoken to NAB chief executive Andrew Thorburn about leaving the bank several months ago because of the wealth division spin-off, but Mr Hagger had stayed until its new boss, Geoff Lloyd, started this month.

He will be eligible for a redundancy payment estimated to be worth about $750,000, but the full details of his remuneration will be revealed when the annual report is published later this year. Mr Hagger will work at a US not-for-profit before starting to look for another senior corporate position by around March next year.

Mr Thorburn said Mr Hagger believed now was the time to leave the bank.

Mike Baird is taking on the high-profile role of running consumer banking.Credit: AAP

"With the recent bringing together of the wealth businesses under new MLC CEO Geoff Lloyd to prepare for separation from NAB, Andrew Hagger believes now is the right time to leave. We have been colleagues for a decade at NAB, I have valued his long-term contribution and I wish him and his family well as he pursues new opportunities,” Mr Thorburn said.

In a statement, Mr Hagger said: "I take accountability for what has occurred on my watch, and accept that alongside successes were failures, including instances where we did not act with the pace required. I leave NAB with confidence that we are creating a better bank.”

NAB has apologised for being too slow to act and promised to pay $87 million in compensation, however, the corporate regulator is taking it to court, accusing it of misleading customers and breaching financial services laws.

During his ten years at NAB, Mr Hagger also oversaw the "break-up" campaign aimed at boosting its market share through lower home loan interest rates and fees, and the sale of 80 per cent of its life insurance business to Japan's Nippon Life.

In his new position of chief customer officer of NAB's consumer bank, Mr Baird will play a leading role in NAB's effort to improve its reputation, which has been damaged by the revelations at the royal commission, as have the brands of key rivals.

Mr Baird's move will also see him lead the bank's response to the royal commission's recommendations in areas such as mortgage lending and credit standards. It will also give him valuable experience in the largest segment of the Australian banking industry, boosting his prospects as a future chief executive of the lender.

"People with retail banking experience, they stand a better chance of heading up a major bank," Bell Potter analyst T.S. Lim said.

Mr Thorburn announced he was promoting Rachel Slade to the position of chief customer experience officer, and Shaun Dooley to the role of chief risk officer. Former risk boss David Gall is moving to replace the position previously filled by Mr Baird leading its institutional arm.

At the royal commission last month, Mr Hagger was quizzed extensively about what the bank told the Australian Securities and Investments Commission (ASIC) about the fees-for-no-service scandal, and his evidence was criticised by the royal commission's senior counsel in their "open findings" on the superannuation round of hearings.

I take accountability for what has occurred on my watch, and accept that alongside successes were failures.

Andrew Haggers

The submission, published late last month, took aim at Mr Hagger's evidence that in 2016 he had not given ASIC its most recent compensation estimate over the scandal, but had given the regulator the opportunity to find out more if it wanted to.

"Mr Hagger’s evidence that he 'left the door open' for ASIC to ask the question reveals both a disrespect for the role of the regulator and a disregard for the gravity of the events in question,” the submission said.

NAB defended Mr Hagger in its response, saying Mr Hagger had a "willingness to engage in proactive and transparent communications with the regulator".