National Australia Bank has not done what it said it would do, such as putting customers right when the bank has done the wrong thing, its managing director Andrew Thorburn conceded yesterday.
In a social media posting in the wake of a harrowing week in the royal commission for the bank, the NAB CEO declared: “When we find a mistake, we fix it. And in this case we haven’t done that.”
The case he was referencing is the studied effort by NAB to find a rationale justifying charging a range of fees on superannuation products in the face of both legal analysis that made them untenable, and law reform intended to have the same effect.
The fees have been the focus of the Hayne royal commission into banking misconduct this week.
Michael Hodge, counsel assisting at the commission, wrapped up his inquisition of Nicole Smith, NAB’s final witness for this round of hearings with four propositions.
“The first proposition that I want to put to you is this: that the approach of the trustee to retaining grandfathered commissions, at least from 1 July 2016, was not in the best interests of the members and was a failure to prioritise the interests of the members over the interests of members of the NAB Group. Do you agree with that?” Hodge asked.
“No,” Smith responded.
“I want to put to you that the approach of the trustee to managing and monitoring the transition of ADAs to the MySuper product was inadequate and did not involve sufficient systems for the trustee to be satisfied that the best interests of the members were being prioritised over the interests of the NAB Group?”
“No,” Smith replied again.
“And I want to put to you that the approach of the trustee to the allocation of the investment management fee for the investment management of the MySuper product was – did not involve sufficient monitoring or action and was not in the best interest of the members or sufficiently prioritising of the interests of the members over the interests of the members of the NAB Group?”
“And finally, I want to put to you that the approach of NULIS and the other trustees within the NAB Group of standing by while NAB Wealth and the executive management team sought persistently, over several years, in its interactions with ASIC and with the trustee, to seek to retain fees where it had not properly reviewed or concluded that there was services provided in exchange for those fees was a failure to act in the best interests of the members and a failure to prioritise the interests of the members over the interests of the NAB Group?”
“No,” Smith said a fourth time.
This exchange soon provoked Thorburn’s posting on Twitter, the text of which read: “This week we’ve been confronted at the royal commission with examples of where we have failed to serve our customers with honour. I’m sorry. And my commitment is that we will learn and get better, so we can once again be a bank you respect and trust.”
NAB had overnight attempted to prevent publication of a document from ASIC entitled ‘Outline of Suspected Offending by the NAB Group’.
Commissioner Kenneth Hayne explained in a ruling denying NAB’s request that the document contained “concerns ascertaining the extent of the charging of fees for no service and what approach should be adopted for compensating those who have been charged.
“In attempting to strike the balance that is to be drawn between those competing elements, it is to be noted that it would be in the interests of NAB to pay the least sum available by way of remediation.
“It would be in the interests of persons charged fees, in circumstances where no service has been provided, to be provided with adequate compensation.
"It is in the public interest that there be an open and transparent inquiry about how both the regulator and the regulated deal with the issue of remediation.”