National Australia Bank CEO, chair resign after scathing inquiry

Michael Dodge  Getty Images

Michael Dodge Getty Images

The royal commission's final report on Monday singled out Mr Thorburn and Dr Henry for harsh criticism, saying they had not learnt the lessons from past misconduct, particularly in NAB's wealth management arm that had charged $100 million in fees without providing services in return.

Buried under the drama of the leadership spill was a trading update which indicates tough times are ahead for the bank and its investors.

Henry said he would retire from the board when a new CEO is appointed.

What do you think of Ken Henry's comments to Leigh Sales?

Thorburn and Henry, a former head of Treasury, announced they were stepping down on Thursday after a scathing critique by the financial services royal commission.

"This is naturally a hard decision but I believe the board should have the opportunity to appoint a new chair for the next period as NAB seeks to reset its culture and ensure all decisions are made on behalf of customers", he said.

But UBS analyst Jon Mott said Baird, who began his banking career in 1989 at NAB's St Ives branch before entering politics, was a real contender.

The opposition leader declared he will not let Scott Morrison "off the hook", signalling Labor will continue to demand additional parliamentary sitting weeks to legislate the recommendations of the royal commission before the election, due in May.

"Andrew and I are deeply sorry for our inability to do that and that's principally what has driven the decisions that have been taken today", he said.

Although Henry insisted the decision was "not made in reaction to any specific event", in a teleconference after the announcement Thorburn conceded it was those observations by Hayne that had "caused the discussions this week" leading to their resignations.

In the teleconference Henry accepted he "could have performed much better in the witness box".

"I got a big job to do and I will do it". "Maybe I did hop out of the bed on the wrong side". In an interview past year, Baird said he had "no idea what the future holds".

Separately, Sydney Morning Herald and The Age reports on Thursday about suspected large-scale fraud by Mr Thorburn's former chief of staff, in which insiders described a culture of largesse and extravagant spending in his office, put his executive oversight in question. They want real change to cut the rot out of our banks. "They must stop denying, delaying and deceiving".

'I have always sought to act in the best interests of the bank and customers and I know that I have always acted with integrity.

Henry said he was "enormously proud of what the bank has achieved" but "equally disappointed" by instances in which it had failed customers.

Former ANZ executive Philip Chronican, now a board director at NAB, will take on the poisoned chalice of acting CEO from March 1, while an global search for a permanent replacement is conducted. "He is the right man for the job".

Henry also dismissed the criticism in a statement.

It brought forward the release of its profit announcement, initially scheduled for Friday, to show a 3 percent drop in cash earnings for the three months to December amid rising competition to sell mortgages and higher borrowing costs.

Henry, whose brusque demeanour during questioning was one of the enduring images of the royal commission, said he has reflected in recent times on NAB's "inability as a company to meet community expectations and customer expectations in the manner we would aspire to".

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