SYDNEY (Reuters) - The chairman of National Australia Bank Ltd (NAB.AX) said at an inquiry into sector misconduct that it would take a decade to fix the profiteering culture that has shredded the reputation of the lender and the broader financial industry.
Damaging revelations of bribery, fraud, the charging of fees for no service and from the accounts of deceased people, as well as board-level deception of regulators have roiled Australia’s financial sector since the explosive inquiry began in February.
Customers’ trust in lenders has been “pretty well eroded to zero” after several months of damaging allegations, NAB Chairman Ken Henry said at the inquiry on Monday.
NAB, which like some of its peers has admitted to charging dead client accounts, has reviewed its culture and found “insufficient intensity of focus on getting it right all the time”, Henry told the inquiry in Melbourne.
The bank, the nation’s fourth-biggest, has determined that it did not respond fast enough to regulators, Henry added.
Asked how long it would take the bank to change its culture, Henry said: “it could be ten years”.
“I hope not, but it would not be unusual for organizations that seek to embed challenging cultures.”
He did not specify why it would take 10 years to overhaul the culture. He, however, added that neither the bank nor its peers had a specific way to measure if leaders were embedding the desired culture.
The investigation, called the Royal Commission, is taking evidence from financial services executives as it nears the end of hearings this Friday.
Retired judge Kenneth Hayne, who is running the inquiry, will deliver a final report to the government by February.
NAB CEO, Andrew Thorburn, testified earlier in the day.
He told the inquiry the bank was “wrong” but not dishonest when it charged fees to customers who had died.
“It’s wrong (but) dishonesty goes to intent,” Thorburn said.
“I don’t think ... there was an intention to not do the right thing. I think it was wrong that we didn’t pick it up, and I think we got onto it reasonably quickly but it was a process error. It broke trust with our clients.”
Henry continues his evidence on Tuesday.
Reporting by Byron Kaye and Paulina Duran; Editing by Himani Sarkar