With the National Australia Bank under fire over allegations of fraud and misconduct by its bankers, its CEO Andrew Thorburn admitted that banks had been prioritizing its company operations over its clients.
“Well I think this has been a drift over time where banks have become so complex, maybe so hierarchical, so focused on compliance, rather than truly understanding the client and doing the right thing,” he said.
In an interview with CNBC in Melbourne on Friday, he said: “As a banker, I am ashamed.”
A Royal Commission inquiry had exposed the misconduct of bankers across the sector, including NAB. The bank told the Commission it identified more than 1,300 customers who may have been affected by the misconduct of dozens of its bankers.
NAB has admitted to the inquiry that some of its advisers had engaged in dishonest and illegal conduct such as misappropriation of client funds. It has paid A$19 million in compensation to customers.
It also said that for years it charged advisory fees to hundreds of thousands of clients without providing them with services or allocating them an adviser.
In an open letter to customers and shareholders, Thorburn said that 20 bankers in New South Wales and Victoria have had their employment terminated, or are no longer with NAB as a result of its investigation.
Thorburn conceded that bad behavior has no place in a bank.
“I also know (Australian Securities and Investment Commission James Shipton) talked about focusing more on and clamping down on bad behavior. And I agree totally with that because when we have bad behavior in a bank it’s really destabilizing and debilitating.”
“We need to find it, fix it, and hold people accountable. And we will continue to do that.”
However, the NAB boss defended the majority of his bankers — there are 12,000 versus the 20 who were involved, pointing out “there’s a lot of people here who are doing absolutely the right thing.”
— Reuters contributed reporting to this article.