NAB’s Andrew Thorburn cops Hayne’s flak as he defends decision to take extended leave

NAB chief Andrew Thorburn says he agrees with Hayne on the bank’s failure to consistently live up to its stated culture.

NAB chief executive Andrew Thorburn says he agrees with some of commissioner Kenneth Hayne’s criticism of the bank, telling The Australian “I do agree with the commissioner about the gap between our stated culture and consistently living it. I agree with him on that.

“Where I have some disagreement, but respect his view, is that it’s due to us not learning the lessons of the past, or not knowing what the right thing to do is.

“But I do agree there’s a gap and I’m more determined than ever to do the change that’s necessary to close that gap.”

Mr Thorburn earlier defended his unusual decision to take extended leave from the bank, saying it was necessary to take care of his own mental and physical health.

The comments came after NAB revealed in an ASX announcement commenting on the finding of the Hayne royal commission that Mr Thorburn had called off his extended leave — which was meant to extend through all of February — bar attending a personal family commitment next week.

“It’s demanding. I have a life outside the company. I’ve got a marriage, I’ve got children, I’ve got elderly parents. They are the people I want to spend some time with,” he said in an interview on Sky News Australia.

Mr Thorburn told host Ticky Fullerton that it was not unreasonable that he take the long service leave he had built up over 14 years with the bank.

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

He said the plan had been raised with NAB’s board a year ago. Given that he had provided plenty of notice, “I think it’s a bit unfair to think that a CEO can’t take leave that is due for their own physical and mental health when they have laid out a plan and they have an army of very good leaders that are executing that strategy”, he said.

Mr Thorburn earlier posted a video addressed to customers on his own Twitter account, in which he acknowledged the royal commission’s findings and pledged the bank to do better.

“I believe we have been making better decisions to put you first, particularly over the past six and twelve months. It is clear we need to lift even more to rise and serve you better,” he said.

A message to our customers: We understand earning your trust is not about words, it's about action. And we're determined to show you how we're changing to be a better bank. pic.twitter.com/TuASiN4ylk

— Andrew Thorburn (@AndrewThorburn) February 4, 2019

His comments came after he and NAB chairman Ken Henry used and ASX announcement to stand firm on fixing the bank’s failings, a day after being hit by scathing personal criticism in the Hayne royal commission.

“The report is comprehensive and will bring about change in our industry and our profession which I have no doubt will make us better for customers,” Mr Thorburn said.

“The final report references matters concerning the NAB Group which have been referred to the relevant regulator. We will engage constructively on these matters.

“In addition, the Commissioner has expressed his view that we at NAB may not be learning the lessons we need to from the past and, in particular, that we don’t know what the right thing to do is.

“As the CEO, this is very hard to read, and does not reflect who I am or how I am leading, nor the change that is occurring inside our bank.”

Earlier, Anna Bligh, the chief executive of the Australian Banking Association, defended the characters of Dr Henry and Mr Thorburn saying they were not “resistors” of change after Commissioner Hayne said he was not confident the pair had learned lessons from the past.

“I think that it’s difficult to form a full view of someone’s character on the basis of one interview but that’s all the Commission process allowed for,” she said on Sky News.

Ms Bligh said she had seen Dr Henry and Mr Thorburn in meetings on a number of occasions where people had to “put their hand up” for reform and said they were some of the first to do so.

“People can be confident that … these are people who understand the problem, are determined to fix it and have already put in place a number of remediation programs and are fully on board for the sorts of changes that have to come in the future,” Ms Bligh said.

“It will mean big change. It’s the kind of change that customers are going to feel.”

In his historic royal commission report, Commissioner Kenneth Hayne yesterday slammed Mr Thorburn and Dr Henry for not accepting “necessary responsibility” for the bank’s misconduct.

Mr Hayne singled NAB out from its rivals, saying he feared there may be a “wide gap” between the public face of the bank and what it does in practice.

Anna Bligh on comments that the NAB has not learnt its lesson following the banking royal commission:

I've seen them in situations where people have had to put up their hands for reform and they were some of the first to do so.

MORE: https://t.co/GTLbtBm23H #FirstEdition pic.twitter.com/vL3VKUGsol

— Sky News Australia (@SkyNewsAust) February 4, 2019

“Having heard from both the CEO Mr Thorburn, and the chair Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned,:” he said.

“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. “

Those comments spurred investors and analysts to question whether Mr Thorburn and Dr Henry could continue in their roles. The NAB board will convene today for a scheduled meeting.

But in the ASX statement, Dr Henry held his ground saying the bank had welcomed the royal commission challenging of its conduct.

“We led the sector in calling for the royal commission to be held,” he said.

“In his final report, Commissioner Hayne said I seemed unwilling to accept criticism of how the Board had dealt with some of the issues raised by the Commission. I am disappointed that the Commissioner formed this view. I know that it is not so.

“The board and I have reflected deeply on those and other issues and, as I have said previously, we take them very seriously.”

After assessing Mr Hayne’s comments, Shaw and Partners senior analyst Brett Le Mesurier told clients today he expects Mr Thorburn will exit NAB this month, while Dr Henry may retire later in 2019.

“He (Commissioner Hayne) was vaguely complimentary of the CBA and ANZ CEOs and was unsure of the WBC (Westpac) CEO. However, he was quite sure that NAB’s chair and CEO stood apart from the other major banks, but not in a good way,” Mr Le Mesurier said. “The NAB CEO will probably depart this month with the chair retiring later in the year.”

Tribeca Investment Partners portfolio manager Jun Bei Liu yesterday said it would be “pretty tough” for both Mr Thorburn and Dr Henry to stay in their posts, following the royal commission’s final report.

“It will be challenging, given NAB is taking more of the brunt,” she said.

CLSA senior analyst Brian Johnson said Mr Hayne’s commentary on NAB would add to pressure for changes at the top of NAB.

“When NAB received the no vote in December 2018 we highlighted we thought they could need a rejig of the executive team, perhaps even poaching back (former finance chief) Craig Drummond,” he said. The “specific [final royal commission] revelations about NAB, Andrew Thorburn and Ken Henry would only add to those pressures”.

NAB came under fire during the royal commission over its approach to the regulators, charging fees to dead people and where no services were provided. Its mortgage introducer referral program was also fraught with problems and bad behaviour.

With Jessica Cortis