NAB dismisses two senior managers
National Australia Bank boss Andrew Thorburn has copped a grilling from both sides of politics about the consequences for executives and financial planners responsible for mismanaging client funds.
At his second appearance before the House of Representatives economics committee in Canberra on Friday, Mr Thorburn faced questions about financial adviser Graeme Cowper who left the bank in 2009.
He confirmed Mr Cowper was reported to corporate regulator ASIC, and was the "biggest" of 55 planners dismissed between 2009 and 2015.
More than 100 clients had to be compensated a total of $7 million following his dodgy advice.
Labor frontbencher Matt Thistlethwaite wasn't impressed with the way Mr Cowper departed the bank.
"You allowed him to resign and gave him a payout, I also understand you wrote him a nice letter," he told Mr Thorburn.
"This is a man that you've admitted breached your code of conduct ... you allow him to resign and give him money - I mean are you living in the real world?"
Mr Thorburn refused to elaborate on the finer details of the case citing legal confidentiality, but he insisted times have changed.
"I think our standards today are better than what we had in 2009," he said.
No longer did the bank enter into confidentiality agreements.
Mr Thorburn separately defended the bank's chief customer officer after being asked why Andrew Hagger, who was paid $4.1 million in 2015/16, hadn't been dismissed over the bank's financial planning products scandal.
"I think Mr Hagger has actually led this business well and lifted the standards and actually been part of the reason why I can sit before you today feeling a lot more confident that the processes, the standards and risk management in our wealth business is much higher than ever before," he said.
Committee chair David Coleman questioned that confidence, given ASIC recently released information about four years of customer breaches requiring NAB repay $35 million.
"I think that's a fairly debatable comment," the Liberal MP said.
"He has been held accountable for what he needed to deliver."
Mr Thorburn revealed more than 1100 staff were deemed to have not met the bank's code of conduct, including five senior managers.
Two had been dismissed, while the other three faced disciplinary action.
Consequences for others included a formal warning and a reduction or elimination of any bonus, Mr Thorburn said.
He insisted the bank's focus was on its customers.
"I think there will be some mismanagement and missteps along the way but the core, our intent and a lot of our processes are very, very sound to encourage how can we help you," he said.
Mr Thorburn again rejected the need for a royal commission into the sector, but said his bank would comply if one were held.