Published: Thu, February 07, 2019
Money | By Ralph Mccoy

NAB CEO vows to stay on despite Hayne pain

NAB CEO vows to stay on despite Hayne pain

The WA company behind the country's biggest network of mortgage brokers is hopeful the industry can find "some common ground" with the Federal Government on the banking royal commission's recommendations to ban commissions.

Relief that banks dodged what could have been hammer blows - forced breakups or tighter lending rules - sparked the biggest rally in financial shares in a decade.

Westpac shares rose 7.4% to $26.70, Commonwealth Bank climbed 4.7% to $73.60, ANZ lifted 6.5% to $26.86 and NAB closed 3.9% higher at $24.97, despite Commissioner Kenneth Hayne singling out the bank by criticising its senior leadership.

The biggest one-day gain was insurance company Steadfast Group, up 11.5%.

Shares of Mortgage Choice Ltd plunged 25.2 percent and those of Australian Finance Group Ltd slumped 29.1 percent. It has little or no prospects of continuing because it has abandoned its cold calling business model.

Mr Thorburn cancelled that leave last night to deal with the fallout from the report.

Ross: "Did you offer your resignation to the board this morning?" In the statement, both men rejected Commissioner's Hayne's comments and claimed to have been, well misunderstood.

The report from Hayne, a former High Court justice, found that the industry's problems were exacerbated by an unwillingness to accept responsibility.

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"There's some things that have happened that I'm ashamed of", Thornburn told 3AW, adding that the bank's fees-for-no service "wasn't dishonest, it was sloppy".

There are also a number of referrals of banking institutions to ASIC as a result of findings from the Royal Commission.

Thorburn appeared in back-to-back interviews on Tuesday morning to push back against Hayne's conclusion, telling Sky Business the commissioner was wrong in his characterisation of both him and NAB's chair, Ken Henry. While we have made mistakes, I believe there is a lot of evidence that we are making sustainable and serious change to once again regain the trust of all our customers.

"There will be nothing positive in the recommendations because the banks have clearly breached various obligations in the laws, and obligations to good customer service", said Matthew Wilson, a banking analyst at Deutsche Bank. I am proud to be CEO of NAB, and am more determined than ever to lead NAB with even greater urgency and intensity and show through our ongoing actions that we do what we say.... "The CEO is crucial to that, but I've got a very competent team and we've got hundreds of leaders who are mobilised around our strategy to be better for our customers".

Instead, it has limited up-front commissions to the amount drawn down by borrowers, rather than the full loan, and will review the impact of its changes over the next three years before committing to further reforms.

"The Ken Henry that I know and work with every day, has integrity, has values, puts customers first, lives in a small town in Australia, has always thought long term and done what is right for Australia".

"I think the bigger picture here is the bank, our bank, has a clear strategy, we have a very competent management team, we've laid out to the market what we're doing, and we're implementing that", Mr Thorburn replied.

"There is growing speculation amongst traders that. we could actually see more certainty in the sector, despite likely bad news, and that certainty will be enough to bring a bounce this week", said Michael McCarthy, chief market strategist at stockbroker CMC Markets.

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