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You can find the current article at its original source at https://www.theguardian.com/australia-news/live/2016/oct/06/banking-inquiry-nab-and-westpac-bosses-face-questions-as-focus-turns-to-donations-live
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| Version 4 | Version 5 |
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| Banking inquiry: NAB explains decision to ditch political donations – live | |
| (35 minutes later) | |
| 2.02am BST | |
| 02:02 | |
| Nationals MP Kevin Hogan asks about the increased spread between the cash rate and standard mortgage rate. | |
| NAB executives deny it is due to decreased competition in the mortgage market, and point to increased funding costs separate to the cash rate such as attracting global funds. | |
| 1.56am BST | |
| 01:56 | |
| Adam Bandt asks if banks are “inherently conflicted” because their wealth management arms want to make money at the expense of depositors, and whether investment needs to be separated from retail banking. | |
| Chief executive Andrew Thorburn rejects the view that structural separation is required because financial planners don’t just recommend NAB products and the bank has a separate consumer advocate function. | |
| Our planners have a best interests duty of care to their clients ... that they get the proper advice. | |
| Asked if he’d be prepared to see that duty reflected in legislation such as restoring it to the Future of Financial Advice law, Thorburn said it was good that the duty was “codified”, including in the Ethics Centre banking and finance oath. | |
| But I do think the moves to lift the expectations of planners in recent years are important. | |
| 1.44am BST | |
| 01:44 | |
| 'To be clean' – NAB chief explains decision to ditch donations | |
| NAB’s chief executive, Andrew Thorburn, explains that the bank gave political donations “as part of involvement in wider democratic process” but the board decided to ditch them in May. | |
| Asked by the Greens MP Adam Bandt why it stopped, Thorburn says: | |
| It comes back to wanting to be respected as a bank and a company. And make sure that our customers don’t see a conflict. | |
| In essence we felt the donations we were making to political parties were being misconstrued and misinterpreted incorrectly. We felt to be clean, direct and decisive we decided to stop such political payments at the state, local and federal government levels. | |
| Thorburn acknowledged the perception that banks had made donations to receive “particular benefits”. | |
| Updated | |
| at 1.52am BST | |
| 1.40am BST | |
| 01:40 | |
| The Liberal MP Scott Buchholz has asked if NAB has an appetite to decrease credit card rates and “if so when, and by how much”. | |
| On Wednesday Buchholz celebrated ANZ saying it would consider a restructure of credit card interest rates. Today, he wants a more specific commitment. | |
| NAB’s Andrew Thorburn says: “Very few people are paying the highest rate and if they are it is attached to a premium product”. Thorburn concedes credit cards are profitable, but says they are getting less so with a halving of margins over the past 20 years. | |
| It’s a very extensive, easy to switch, competitive market. | |
| The bank’s chief operating officer, Antony Cahill, says the interest rates are reasonable. He notes the cash rate is only 20% of the cost of cards and customers don’t pay the headline rate owing to interest-free periods and other complications. | |
| Buchholz is now quoting Will Anderson, the host of The Gruen Transfer, to establish that banks would be very popular if they dropped credit card rates. He doesn’t get the commitment to restructure rates. | |
| Updated | |
| at 1.50am BST | |
| 1.24am BST | 1.24am BST |
| 01:24 | 01:24 |
| Thorburn rejects strengthening individual accountability for executives | Thorburn rejects strengthening individual accountability for executives |
| Matt Keogh has returned to the fact that no senior executives were sacked after 43 financial planners lost their jobs for breaches of the code of conduct. He asks about the UK’s new laws requiring individual accountability of executives. | |
| Andrew Thorburn says it’s understandable given that there were bank collapses and public bailouts in the UK that they have “more specific and onerous requirements”. | |
| The Australian financial systems inquiry “basically concluded that our industry is strong”, he said. | |
| We should note that scheme ... But we have a good record, good checks and balances. Our banks have high capital ratios, and are unquestionably strong. I’m not saying we should be complacent, but transferring a scheme designed to solve a very different problem would not be wise. | We should note that scheme ... But we have a good record, good checks and balances. Our banks have high capital ratios, and are unquestionably strong. I’m not saying we should be complacent, but transferring a scheme designed to solve a very different problem would not be wise. |
| Updated | |
| at 1.49am BST | |
| 1.15am BST | 1.15am BST |
| 01:15 | 01:15 |
| Addressing the concept of a housing bubble, NAB’s chief executive, Andrew Thorburn, says the problem only exists in Sydney and Melbourne. | |
| He explains that the bank doesn’t loan too much to individual customers because it checks they can afford to pay back principal and interest, and have a buffer for movements in rates. | |
| NAB’s average loan-to-value ratio is around 44% and just a few per cent of customers are able to borrow more than 90% of the value of their asset. | |
| The bank’s chief operating officer, Antony Cahill, says that less than 2% of the total housing book is in inner-city postcodes, refuting the idea it might be exposed to oversupply of apartments. | |
| Updated | |
| at 1.48am BST | |
| 1.05am BST | 1.05am BST |
| 01:05 | 01:05 |
| Labor’s Matt Keogh is asking about how much it costs to run an ATM network, which is a line of questioning we haven’t seen so far on the first two days of hearings. | Labor’s Matt Keogh is asking about how much it costs to run an ATM network, which is a line of questioning we haven’t seen so far on the first two days of hearings. |
| He asks how much an ATM transaction costs, and how much it costs for the customer of another bank to use it. NAB execs have taken the questions on notice. | He asks how much an ATM transaction costs, and how much it costs for the customer of another bank to use it. NAB execs have taken the questions on notice. |
| Keogh attempts to land the punch by asking why NAB increased the “foreign transaction charge” from $1.50 to $2 in 2013. | Keogh attempts to land the punch by asking why NAB increased the “foreign transaction charge” from $1.50 to $2 in 2013. |
| NAB’s chief operating officer, Antony Cahill, suggests the costs are reasonable and competitive. ATM use is down across Australia, so revenue is also down, he said. | NAB’s chief operating officer, Antony Cahill, suggests the costs are reasonable and competitive. ATM use is down across Australia, so revenue is also down, he said. |
| Customers of other institutions have access to their ATMs. | Customers of other institutions have access to their ATMs. |
| 12.51am BST | 12.51am BST |
| 00:51 | 00:51 |
| Julia Banks asks about support for a proposal from the MP Warren Entsch calling for bank victims to be able to take complaints to and seek compensation at a special tribunal. | Julia Banks asks about support for a proposal from the MP Warren Entsch calling for bank victims to be able to take complaints to and seek compensation at a special tribunal. |
| NAB’s chief executive, Andrew Thorburn, says it is the banks role to deal with hardship or complaints but adds the bank will go along with the idea if the government pursues it: | NAB’s chief executive, Andrew Thorburn, says it is the banks role to deal with hardship or complaints but adds the bank will go along with the idea if the government pursues it: |
| We have said that we’re absolutely prepared to work with parliament, and government to make sure the highest standards are in place so that it’s easy for customers, when they have issues and grievances, for those to be dealt with, so absolutely we would. | We have said that we’re absolutely prepared to work with parliament, and government to make sure the highest standards are in place so that it’s easy for customers, when they have issues and grievances, for those to be dealt with, so absolutely we would. |
| Updated | Updated |
| at 12.56am BST | at 12.56am BST |
| 12.44am BST | 12.44am BST |
| 00:44 | 00:44 |
| The Liberal MP Julia Banks is quizzing NAB’s chief executive, Andrew Thorburn, about statements he has made that it will take five to 10 years to get culture right in a large organisation. | The Liberal MP Julia Banks is quizzing NAB’s chief executive, Andrew Thorburn, about statements he has made that it will take five to 10 years to get culture right in a large organisation. |
| Thorburn rattles off measures to improve the bank, including compensation for victims, removing dodgy planners and providing incentives for the right customer outcomes. | Thorburn rattles off measures to improve the bank, including compensation for victims, removing dodgy planners and providing incentives for the right customer outcomes. |
| He sticks to his line which has a more to do but heading in the right direction vibe: | He sticks to his line which has a more to do but heading in the right direction vibe: |
| I believe we’ve made that step. We’re making good progress on specific things but it will take time for us to fully have the culture we want, that’s an ongoing process achieved through leadership. | I believe we’ve made that step. We’re making good progress on specific things but it will take time for us to fully have the culture we want, that’s an ongoing process achieved through leadership. |
| Updated | Updated |
| at 12.55am BST | at 12.55am BST |
| 12.36am BST | 12.36am BST |
| 00:36 | 00:36 |
| The Liberal MP Julia Banks has asked about NAB’s corporate values, which includes “boldness”. | The Liberal MP Julia Banks has asked about NAB’s corporate values, which includes “boldness”. |
| Specifically, it says: | Specifically, it says: |
| Be bold – not being afraid to ask the tough questions and try something different. | Be bold – not being afraid to ask the tough questions and try something different. |
| Andrew Thorburn denies that boldness has contributed to scandals at the bank, and explains it refers to being bold about raising problems. | Andrew Thorburn denies that boldness has contributed to scandals at the bank, and explains it refers to being bold about raising problems. |
| Executives everywhere should take note – don’t pad out your corporate values statements because you could be cross-examined on them by a parliamentary committee. | Executives everywhere should take note – don’t pad out your corporate values statements because you could be cross-examined on them by a parliamentary committee. |
| Updated | Updated |
| at 12.55am BST | at 12.55am BST |
| 12.30am BST | 12.30am BST |
| 00:30 | 00:30 |
| 'Hungry' tellers are pushing products customers don't need: Thistlethwaite | 'Hungry' tellers are pushing products customers don't need: Thistlethwaite |
| NAB’s chief, Andrew Thorburn, is defending the incentives created by remuneration structures. He says 12% of staff have specific product targets but they are reviewed to ensure they are balanced and appropriate. | NAB’s chief, Andrew Thorburn, is defending the incentives created by remuneration structures. He says 12% of staff have specific product targets but they are reviewed to ensure they are balanced and appropriate. |
| He says pay is subject to safeguards including not giving staff bonuses immediately, but deferring them and scaling them back if sales were inappropriate. | He says pay is subject to safeguards including not giving staff bonuses immediately, but deferring them and scaling them back if sales were inappropriate. |
| We do have a small proportion that are on direct sales targets, but we have a couple of very important checks and balances on that. | We do have a small proportion that are on direct sales targets, but we have a couple of very important checks and balances on that. |
| Matt Thistlethwaite suggests tellers have a target of one home loan and one other product (such as a credit card, loan or insurance) a week. | Matt Thistlethwaite suggests tellers have a target of one home loan and one other product (such as a credit card, loan or insurance) a week. |
| The chief executive suggests it’s necessary for competition, and growing a business requires “hungry” people. | The chief executive suggests it’s necessary for competition, and growing a business requires “hungry” people. |
| “Our tellers don’t do selling, they are there to process transactions and to refer customers according to their need,” he said. | “Our tellers don’t do selling, they are there to process transactions and to refer customers according to their need,” he said. |
| Thistlethwaite responds: | Thistlethwaite responds: |
| You call it hunger but the Australian public might call it pushing products on them that aren’t in their best interests. | You call it hunger but the Australian public might call it pushing products on them that aren’t in their best interests. |
| Updated | Updated |
| at 12.47am BST | at 12.47am BST |
| 12.20am BST | 12.20am BST |
| 00:20 | 00:20 |
| NAB would 'immediately cease' upselling if customers object | NAB would 'immediately cease' upselling if customers object |
| Labor’s Matt Thistlethwaite asks how NAB uses customers’ financial data to sell them other products. | Labor’s Matt Thistlethwaite asks how NAB uses customers’ financial data to sell them other products. |
| Andrew Thorburn takes on notice the specifics of how it uses the information, then responds with generalities about doing the right thing by customers: | Andrew Thorburn takes on notice the specifics of how it uses the information, then responds with generalities about doing the right thing by customers: |
| Our goal and commitment is to understand their needs, to understand their circumstances and as bankers provide them the right advice and the right product. | Our goal and commitment is to understand their needs, to understand their circumstances and as bankers provide them the right advice and the right product. |
| Thistlethwaite: “Call me cynical, but I think that’s a lot of spin. It’s an opportunity to sell a product ... ” | Thistlethwaite: “Call me cynical, but I think that’s a lot of spin. It’s an opportunity to sell a product ... ” |
| The committee deputy chairman suggests Australians would think it’s wrong that banks use financial information, including “private transactions” with other parties and banks, to sell a product. | The committee deputy chairman suggests Australians would think it’s wrong that banks use financial information, including “private transactions” with other parties and banks, to sell a product. |
| Thorburn said it would “cease immediately” if a customer indicated they did not consent to the practice. | Thorburn said it would “cease immediately” if a customer indicated they did not consent to the practice. |
| Updated | Updated |
| at 12.46am BST | at 12.46am BST |
| 12.09am BST | 12.09am BST |
| 00:09 | 00:09 |
| NAB’s chief executive, Andrew Thorburn, says that since a 2015 Senate inquiry into the banks, NAB has now committed to report all sacked planners to Asic not just those who it believed committed a reportable breach. | NAB’s chief executive, Andrew Thorburn, says that since a 2015 Senate inquiry into the banks, NAB has now committed to report all sacked planners to Asic not just those who it believed committed a reportable breach. |
| Of 43 planners sacked between 2010 and 2015 not all were reported at the time, but “Asic would know about them now”, he said. | Of 43 planners sacked between 2010 and 2015 not all were reported at the time, but “Asic would know about them now”, he said. |
| Asked if compliance had been inadequate, the NAB boss accepts that was “absolutely one of the reflections that we’ve took”. He says there are more checks and balances including reviews now. | Asked if compliance had been inadequate, the NAB boss accepts that was “absolutely one of the reflections that we’ve took”. He says there are more checks and balances including reviews now. |
| Updated | Updated |
| at 12.45am BST | at 12.45am BST |
| 12.02am BST | 12.02am BST |
| 00:02 | 00:02 |
| The NAB chief executive reveals that $892,000 has been paid in compensation to clients of five planners who were deregistered by Asic. He said $800,000 of that related to one planner. | The NAB chief executive reveals that $892,000 has been paid in compensation to clients of five planners who were deregistered by Asic. He said $800,000 of that related to one planner. |
| 12.01am BST | 12.01am BST |
| 00:01 | 00:01 |
| NAB only wrote to clients it believed were affected by struck-off planners | NAB only wrote to clients it believed were affected by struck-off planners |
| Andrew Thorburn is addressing a question about five planners who were deregistered, and boasts that NAB found four of them itself before notifying the regulator, the Australian Securities and Investment Commission. | Andrew Thorburn is addressing a question about five planners who were deregistered, and boasts that NAB found four of them itself before notifying the regulator, the Australian Securities and Investment Commission. |
| Thorburn takes on notice whether it has contacted every client of those financial planners. He then reveals in two cases it had contacted all clients, in two it had contacted only those it considered to be affected, and in one case it didn’t write to the clients because they weren’t financially affected. | Thorburn takes on notice whether it has contacted every client of those financial planners. He then reveals in two cases it had contacted all clients, in two it had contacted only those it considered to be affected, and in one case it didn’t write to the clients because they weren’t financially affected. |
| We’ve been more targeted ... where we feel there is any concern, we will be going back to clients again. | We’ve been more targeted ... where we feel there is any concern, we will be going back to clients again. |
| Updated | Updated |
| at 12.44am BST | at 12.44am BST |
| 11.56pm BST | 11.56pm BST |
| 23:56 | 23:56 |
| The committee’s deputy chairman, Labor’s Matt Thistlethwaite, notes that the CBA and ANZ started with an apology but NAB didn’t. | The committee’s deputy chairman, Labor’s Matt Thistlethwaite, notes that the CBA and ANZ started with an apology but NAB didn’t. |
| The bank’s chief executive, Andrew Thorburn, denies believing there is no need to apologise. | The bank’s chief executive, Andrew Thorburn, denies believing there is no need to apologise. |
| I have apologised – to the customers, particularly in the financial advice division ... I have apologised and I do so again [today]. | I have apologised – to the customers, particularly in the financial advice division ... I have apologised and I do so again [today]. |
| Updated | Updated |
| at 12.44am BST | at 12.44am BST |
| 11.54pm BST | 11.54pm BST |
| 23:54 | 23:54 |
| Andrew Thorburn says NAB would support efforts to make account switching easier, by having portable accounts and customer data. | Andrew Thorburn says NAB would support efforts to make account switching easier, by having portable accounts and customer data. |
| He predicts a new cross-industry payments platform will allow account portability by the end of next year. | He predicts a new cross-industry payments platform will allow account portability by the end of next year. |
| The committee chairman, David Coleman, wants NAB to commit to tie pay to delivering data sharing, the executives express “in-principle” support for data sharing and account portability. Thorburn takes the question on tying remuneration to the outcome on notice. | The committee chairman, David Coleman, wants NAB to commit to tie pay to delivering data sharing, the executives express “in-principle” support for data sharing and account portability. Thorburn takes the question on tying remuneration to the outcome on notice. |
| Updated | Updated |
| at 12.43am BST | at 12.43am BST |