Henry, Thorburn not reform 'resisters':ABA

Mae Love
February 7, 2019

Mortgage brokers were punished.

Shares in Australian Finance Group and other listed mortgage brokers were smashed yesterday as Commissioner Kenneth Hayne's final report opened the door to a major shake-up in brokers' remuneration.

The CBA releases its interim earnings later this morning.

Shares in the major banks edged lower in early trade on Monday before reversing to post gains of about one percent by lunchtime, helping the broader market 0.3 per cent higher. It has little or no prospects of continuing because it has abandoned its cold calling business model.

Henry and Thorburn have issued a statement this morning in response to the findings. "More particularly, I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly", he said.

A summary of broker responses to the financial sector Royal Commission report including stock-specific recommendations. The inquiry heard accounts of aggressive sales tactics and charging customers fees for no service.

The NAB board met in Sydney on Tuesday but the bank would not confirm whether the future of Mr Thorburn and Mr Henry was discussed.

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"I feel that we are acknowledging; we are making decisions [and] actions that are proving that we want to rebuild trust with customers".

The CEO said he had cancelled his long service leave to "personally and visibly" lead the bank's efforts to improve.

"The first budget I hand down won't just invest more in schools and hospitals and essential services - it will also contain bigger, fairer tax cuts for 10 million working Australians who earn up to $125,000", he said. "I will lead this personally and visibly, and alongside NAB's 33,000 employees who share my determination to be better for customers".

"In his final report, Commissioner Hayne said I seemed unwilling to accept criticism of how the Board had dealt with some of the issues raised by the Commission", he acknowledged. I still don't know ... It told the bank the suggestion failed "to adequately reflect any insight into the seriousness of the suspected misconduct" and was even worse than a very long series of previous ideas ASIC had already rejected.

"I am acknowledging we have made mistakes and that is not good enough and I have said when we have made them, we haven't addressed them fast enough". The Board has led a deep examination of our culture, governance and accountability. I think this is where we have to be clear. The 88% "no" vote was a record.

National Australia Bank chairman Ken Henry gives evidence at the Banking Royal Commission. NAB will have to arrange succession plans for the two - former NSW premier Mike Baird looms as the most logical candidate for the CEO's role; a possible new chairman remains unclear.

The Government will adopt his recommendation to ban new mortgage trailing commissions from July 2020, but has baulked at also scrapping up-front commissions for fear of eroding competition in the mortgage market.

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