NAB, CBA hit back at claims they engaged in criminal conduct

National Australia Bank has hit back at allegations at the banking royal commission that it mistreated its superannuation customers arguing it did not owe them an "overarching obligation" to act in their interests.

The claim from NAB came as it and Commonwealth Bank both denied the royal commission's preliminary findings that they engaged in criminal conduct when managing money on behalf of superannuation fund members.

NAB super trustee NULIS said in its official submission to the superannuation hearings at the royal commission there was no evidence it intended to break the law when it failed to report a breach within 10 days to the corporate regulator and thus can’t be found guilty of any crime.

Andrew Hagger of NAB was called to give evidence at the royal commission into the bank's dealings with ASIC.Credit: Darrian Traynor

Instead, NAB has argued that not everything the trustee does has to be in the best interest of members, rather the trustee has to act in the best interest of members when it is exercising its duty.

CBA denied a range of legal breaches relating to its super business Colonial First State, including that it had potentially criminally violated the Corporations Act for tardy breach reporting.

It denied its charging of financial advice fees to dead people amounted to a potentially criminal breach of the Superannuation Industry (Supervision) Act, but did admit that it did constitute other breaches of the law.

In submissions released on Monday, NAB defended one of its senior most executives, Andrew Hagger who was criticised by the royal commission after giving evidence that he would have revealed the full extent of NAB’s fees for no service issues if the regulator had asked “the right questions”. NAB said Mr Hagger had a "willingness to engage in proactive and transparent communications with the regulator".

CBA also defended the time it took to transfer 60,00 customers to "MySuper," saying it was "not correct" for counsel assisting to claim the Australian Prudential Regulation Authority wanted it to move the accounts to MySuper earlier.

Linda Elkins leaving the banking services royal commission.Credit: AAP

CBA added that Colonial First State’s executive general manager Linda Elkins did not concede its communications to advisers about its MySuper product even though Ms Elkins appeared during the hearing to admit that some of its communications were misleading.

IOOF rejected the royal commission’s preliminary findings that it had not acted in the best interest of members when it compensated some members of its Questor Cash Management Trust with their own money.

IOOF stuck to its “pub test” approach and insisted all members were made good.

In a separate submission, APRA – which had advised IOOF that it needed to change its structure to be in step with current legislation – said Mr Kelaher failed to understand the law in regards to superannuation.

AMP denied allegations it had not acted in the best interest of members due to its reliance on other AMP divisions to investigate misconduct and potential breaches affecting members of AMP’s super funds. The wealth manager said the terms of its outsourcing arrangements specifically required the AMP entities to act in accordance with the trustees' duties and obligations.

ANZ Bank dismissed counsel assisting's suggestion that it breached the Corporations Act in selling a super product through its branches in a way that risked causing members who rolled their super over to be left worse-off.

Suncorp rejected six open findings of misconduct against it. Four of these related to the use of a members' tax credit to pay part of Suncorp for services, and two were linked to its transfer of members to the no-frills super scheme, My Super.

Melbourne’s Catholic Super Fund said the breaches of its conflict policy by its former general manager investor relations Rob Clancy was at the lower end of the seriousness. The royal commission heard Mr Clancy had allegedly signed $2 million of marketing contracts with his brother’s business without proper declarations.