National Australia Bank CEO Ross McEwan to tap Bain & Co for review

The new big four bank boss tells top executives he wants to simplify processes for bankers, frontline staff and customers.

NAB chief Ross McEwan started in the top job on Monday. Picture: AAP

New National Australia Bank boss Ross McEwan has told staff that consultants Bain & Company will assist in a three-to-four month review, as he works out the next leg of the bank’s strategy.

Sources told The Australian the review would be internally led, but Bain were on deck to help.

While addressing senior employees Mr McEwan said the key going forward was to simplify processes for bankers, frontline staff and customers. Part of his one hour address to top staff is thought to have centred on putting customers first, and that NAB would also rule off the final nine months of the current three-year transformation program.

Mr McEwan started in the top job on Monday after stepping down as chief executive of the Royal Bank of Scotland earlier in the year.

His start date follows a tumultuous year for NAB, after losing prior CEO Andrew Thorburn and former chairman Ken Henry to the fallout from the battering the bank received at the Hayne royal commission.

READ MORE: Big job ahead as NAB chief starts work | NAB admits to customer transaction failures | Westpac directors ‘may be disqualified’

Bell Potter banking analyst TS Lim supported Mr McEwan’s approach of having the strategy review led internally, rather than putting “Bain in the driver’s seat”.

“The role of the consultant is purely to facilitate the process and not to dictate terms,” he said.

While at the helm of RBS, Mr McEwan did at times also use consultants.

In 2013, Sir Andrew Large and management consultants Oliver Wyman undertook an independent review of practices and standards used by RBS and NatWest for lending to small and medium businesses in the UK.

Mr Thorburn had turned to Boston Consulting Group for help with his strategic plan.

That included cutting 6000 staff, but rehiring 2000 in technology and data related roles and simplifying products and services.

In his first week, Mr McEwan also told his top managers not to “paint the bridge”, urging them to tell him about issues or matters as they were, rather than attempting to give a more attractive picture.

That follows the scandal that erupted at Westpac last month, after financial crimes regulator Austrac took legal action against the bank over 23 million alleged breaches of the law.

The statement of claim said Austrac believed there was “indifference” among Westpac’s management and the bank has since kicked off an accountability review.

NAB has also flagged that it has outstanding matters being assessed by Austrac.

The bank has said it identified issues including “certain weaknesses” with the implementation of the Know Your Customer requirements, other financial crime risks, as well as systems and process issues.

Commonwealth Bank paid a record $700 million penalty to Austrac last year to settle legal action, while investors expect Westpac to pay about $1bn given it had more alleged breaches and facilitated payments linked to child exploitation.

Mr McEwan rang the bank’s main regulators on Monday to introduce himself as the domestic industry also continues to reel from large customer compensation payments.

Investors will get their chance to ask the NAB board and Mr McEwan questions at its annual general meeting on December 18. Proxy advisory houses ISS and Ownership Matters are both understood to have called on investors to support NAB’s pay report and the re-election and election of board members.

That comes after a mammoth strike against the remuneration report last year. NAB has since changed its pay structure to include a “clear long-term performance hurdled element”, while also taking other accountability measures such as scrapping all 2019 short-term bonuses for executives.

“After a year in which we were found to have fallen short in several areas, we look forward to demonstrating to all stakeholders that we are a company worthy of your support,” chairman Phil Chronican said in the notice of meeting.

Separately, NAB released an information memorandum on Tuesday outlining plans to issue several series of additional capital notes, counting as tier one capital.

The notes, which are unlisted, will largely target institutional investors and superannuation funds.

The document said there was no limit on capital notes that could be issued as part of the programme. NAB said the proceeds would be for “general corporate purposes” and the banking regulator had confirmed they were eligible for additional tier one capital.