Appearing before the House of Representatives Standing Committee on Economics, NAB CEO Andrew Thorburn informed committee members that the bank reduced its introducer numbers from 8,000 to “just over 1,000”.
During the first round of hearings from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, it was revealed that NAB employees fraudulently submitted home loan applications in collusion with introducers.
Mr Thorburn has said that in response to such misconduct, the bank has “overhauled” its introducer program and has reduced its introducer numbers by almost 90 per cent.
“We started off with good intent, in the sense that in local communities all around Australia, accountants, solicitors, football clubs, netball clubs and so on, we encouraged them if they refer business to us, we would pay them a fee and go back to them for a referral,” the CEO told the parliamentary committee.
“It started like that, but it grew too fast, and there was too much focus on volumes and growth, and we didn’t have the controls in place.
“We’ve overhauled that dramatically; we’ve gone from 8,000 introducers to just over 1,000. [The program] has far better controls, [is] far more targeted and [has] far better contracts.”
However, Mr Thorburn claimed that the fraudulent misconduct highlighted by the royal commission was not as a result of the bank’s policy failures.
“I think we have really addressed the issue,” the CEO said, “but I must say that in the case of the ones that went to the royal commission, people committed fraud, this wasn’t breaking policies — this was fraud from third parties outside the bank and some staff.
“When we found out about that and investigated that, we terminated all the staff and handed over all our files to the police.”
Introducer fees still not disclosed to customers
However, when asked by deputy chair of the committee Matthew Thistlethwaite if the bank was disclosing introducer fees to customers, Mr Thorburn said that NAB “should be”, adding that the bank was in the process of implementing further changes to its introducer program.
“Our expectation is with respect to the introducer program, which I personally will keep monitoring to make sure that it does deliver what it should, does have a requirement that it is disclosed,” the CEO added.
“In previous cases, I can’t be confident in saying that it was, so we’ve tightened it up a lot.”
Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.