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National Australia Bank insists it has been “open and transparent” in making significant improvements to its management and compliance since it was hauled over the coals at the banking royal commission.
However, revelations on Friday were a reminder of why one of Australia’s major banks has endured a major shake-up among its senior management since the inquiry with its chief executive having been forced out of the bank and its chairman leaving in the next few months.
Nine newspapers revealed on Friday details of the bank’s poor practices that were kept out of material prepared for the banking regulator and while the Hayne royal commission was in progress.
Documents shared by a whistleblower show details on the bank’s poor systems and governance uncovered by consultants EY weren’t included in the report.
Among those details was an admission by Ken Henry – the outgoing NAB chair and former Treasury secretary – in a meeting with EY that he was “confident” the bank was still selling products that would require customers to be compensated later on.
NAB says since the royal commission it has undertaken a reform program that includes 26 actions which are well under way.
“NAB has been open and transparent in acknowledging the significant improvements required to non-financial risk management and compliance, as identified in our self-assessment on culture, accountability and governance,” NAB chief risk officer Shaun Dooley said in comments obtained by AAP.
“A review of all NAB products has commenced, with consideration of product design and how products are being used by customers.”
NAB shares fell over one per cent on Friday.
The royal commission uncovered shocking evidence of misconduct and greed in the Australian financial sector, at the expense of customers and businesses.
Commissioner Kenneth Hayne made 76 recommendations in his final report released in February, with the government committing to “taking action” on all of them.
“It’s obviously incumbent on the banking sectors and the financial sector in general to do its bit to restore confidence, to restore public confidence,” Finance Minister Mathias Cormann told Sky News.
MPs regularly question the heads of the big four banks through the House of Representatives’ economics committee about how they are driving change.
Treasurer Josh Frydenberg now wants the committee to examine how other financial institutions are tracking as well, and as soon as possible.
“This inquiry will help provide further transparency to the public on the work financial institutions are undertaking to implement recommendations from the royal commission,” he said.
Separately, the nation’s big four auditing firms, including EY, now also face scrutiny from a parliamentary inquiry.
The Parliamentary Joint Committee on Corporations and Financial Services will look at audit quality, the effectiveness of competition and potential conflicts of interest in the sector.
EY, along with KPMG, Deloitte and PwC will go under the microscope after an inquiry was pursued by Labor senator Deborah O’Neill on Thursday.
The inquiry will report back in March next year.
Australian Associated Press
