NAB dials up compo staff after royal commission ‘wake-up call’

NAB says it will soon have about 500 people working on its remediation program in the wake of Hayne’s “wake-up call”.

NAB interim CEO, Philip Chronican appearing at a House of Representatives Standing Committee on Economics, Review of the Four Major Banks at Parliament House in Canberra. Picture Kym Smith

National Australia Bank acting chief executive Phil Chronican has branded the Hayne royal commission a “wake-up call” for the bank, and said he is adding 150 people to the ranks of those overseeing repayments to aggrieved customers.

In an opening statement to a parliamentary economics committee, Mr Chronican highlighted NAB’s remediation tally of $110 million to customers and noted he would soon have an about 500 people working on its program, up from 350.

“The royal commission was our wake-up call and it’s challenging us deeply in how we respond,” he said. The $110m repaid since June was to 310,000 customers.

NAB was hardest hit among the big four banks by the Hayne royal commission and the fallout from its fee-for-no-service scandal and lack of accountability saw the exits of CEO Andrew Thorburn while chairman Ken Henry is leaving later this year.

“The royal commission was about much more than the 76 individual recommendations contained in the final report. It has forced us to confront broader issues of how we treat customers, and the accountability, governance and culture inside the bank,” Mr Chronican said today.

“We are asking our customers and the community to judge us by the actions that we take to fix these issues. NAB’s internal reform program is bringing greater rigour, discipline and a stronger focus on customers.”

That includes “greater board oversight” of customer outcomes and holding executives to account.

Mr Chronican also flagged upcoming changes to NAB’s pay structures after it received a record investor strike against its remuneration report last year.

“On the issue of remuneration and incentives, we know we need change to get the best outcomes for customers and to meet community expectations — and we are changing,” he said.

“These actions are just the start. There is a lot more to do — and that we must do — to build a bank that our customers, our employees and the community deserve.

“At the same time NAB will remain well and truly open for business.”

Mr Chronican has already announced a raft of measures at NAB to repair its battered reputation, including keeping open its branches in rural and regional branches until at least January 2021 and axing its controversial loan introducer program and axing its controversial loan introducer program.

“We want customers to be referred to us for the features of our products and the quality of our service, not because someone is going to be paid a fee to recommend us,” he said.

The statement also said NAB remain “well and truly” open for business. That comes against the backdrop of concerns about an emerging credit squeeze across business and mortgage lending.

Mr Chronican — a former ANZ Bank and Westpac executive and newly appointed NAB chairman — is acting in the CEO role while a global search is underway. He was a non-executive director until Mr Thorburn’s exit last month.

Mr Chronican follows ANZ Bank chief Shayne Elliott in fronting the parliamentary committee.

Answering questions, Mr Elliott said it was his long-term target to slash compensation payments to customers to zero.

While his personal target for remediation costs was zero, Mr Elliott said a realistic outcome was significantly less than $100m.