NAB CEO Andrew Thorburn and chair Ken Henry resign in the wake of banking royal commission



February 07, 2019 17:58:55

National Australia Bank CEO Andrew Thorburn and chairman Ken Henry have resigned from the bank.

Key points:

  • Both men were singled out for criticism by commissioner Kenneth Hayne
  • Former ANZ executive Philip Chronican will be acting CEO
  • The bank had faced an unprecedented shareholder revolt at the end of last year

Mr Thorburn will leave at the end of the month, while Dr Henry will stay on until a new, permanent chief executive is appointed.

Both men had been singled out for criticism by banking royal commission head Kenneth Hayne.

In a statement, Mr Thorburn said his decision to retire followed a number of conversations with Dr Henry this week.

“I acknowledge that the bank has sustained damage as a result of its past practices and comments in the royal commission’s final report about them,” Mr Thorburn said.

In the banking royal commission’s final report released on Monday, Mr Hayne said he had doubts that NAB had learned from its past mistakes, and criticised Mr Thorburn’s characterisation of the fees for no service scandal as “nothing more than carelessness”.

Former ANZ executive Philip Chronican, currently a board director at NAB, will step in as acting CEO from March 1.

Shareholder revolt saw boss take a $2m pay cut

The fallout from the royal commission caused a revolt at NAB’s annual general meeting last year, when 88 per cent of shareholders voted down the company’s remuneration report — the largest protest vote in Australian corporate history.

Mr Thorburn saw his pay cut by $2.1 million, but still took home $4.3 million for his year’s work.

NAB shares are expected to return to trade tomorrow morning, after being halted this afternoon ahead of the announcement.

In an interview with the ABC’s Elysse Morgan on The Business on Tuesday, Mr Thorburn said he could not guarantee he would still be the bank’s chief executive by the end of the week.

Dr Henry is scheduled to appear in a live interview with Leigh Sales on the ABC’s 7.30 program tonight.

NAB has consistently underperformed the other major banks, having never recaptured its pre-financial crisis share price highs.

A career banker, Mr Thorburn was 14-year veteran at NAB, joining the bank in 2005 as the head of retail banking.

The was elevated to the top job in 2014, after a six-year stint running NAB’s New Zealand business, replacing the retiring Cameron Clyne.

His brief had been to simplify and modernise the bank, disposing of its underperforming UK business and updating an ageing IT platform.

Dr Henry became NAB chairman in 2015 after a long career in the public sector, where he rose to be Treasury secretary.

Dr Henry said the Board recognised change was necessary.

“The timing of my departure will minimise disruption for customers, employees and shareholders,” he said.

More to come.







First posted

February 07, 2019 15:40:48

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