SYDNEY, Feb 8 (Reuters) - National Australia Bank Ltd began a search for a new CEO and chairman on Friday after the incumbents were forced to quit in the wake of a misconduct inquiry, with an ex-politician tipped by some analysts to become the new chief executive.
The country’s fourth-largest lender said its CEO, Andrew Thorburn, and chairman, Ken Henry, quit days after they were singled out for strong criticism in the final report of a public inquiry into financial sector misconduct.
The retired judge who ran the Royal Commission inquiry generally spared individuals from criticism in his 1,000-page report published on Monday, but he called out Thorburn and Henry for appearing unprepared to learn from past wrongs.
Both men had appeared at times testy and dismissive as they were publicly grilled by barristers assisting the commission about misconduct at the bank including charging fees for services not given and aggressive sales tactics at branches.
NAB also revealed in a quarterly earnings update on Thursday that its underlying net profit fell 3 percent in the three months to end-December, worse than analyst forecasts.
NAB shares fell as much as 1 percent at the open on Friday but recovered to trade down 0.2 percent by mid-morning in a flat overall market, as investors looked ahead to an impressive roster of replacement candidates.
Among the other “Big Four” lenders, Westpac Banking Corp was down 0.2 percent, while Australia and New Zealand Banking Group Ltd was flat and Commonwealth Bank of Australia rose 0.4 percent.
“We believe NAB has a number of solid internal candidates for CEO, with Mike Baird ... a lead contender in our view,” UBS analysts said in a note, referring to a former premier of Australia’s biggest state, New South Wales, who became NAB’s chief customer officer soon after quitting public office.
Other candidates named by analysts included Craig Drummond, a former NAB chief financial officer who is currently CEO of health insurer Medibank Private Ltd.
Most analysts said the interim CEO named by NAB, former Westpac Banking Corp executive Philip Chronican, was the frontrunner to be the new NAB chairman.
“The people who are running them just isn’t as important as the fundamentals of credit growth and the balance sheet,” said Nathan Bell, head of Australian equities at InvestSmart, which holds bank stocks but not NAB.
Thorburn and Henry are first senior executive and board member of a top Australian bank to lose their jobs over wrongdoing exposed by the year-long Royal Commission.
Reporting by Byron Kaye; Editing by Stephen Coates