SYDNEY—Australia’s National Australia Bank said on Monday, March 25, it would end a profitable system of bonuses for referrals that was criticized by an independent inquiry.
NAB interim Chief Executive Officer and Chairman-elect Philip Chronican said scrapping the referral payments to businesses such as sport clubs and accountants would help to regain customer trust after the inquiry found widespread wrongdoing across the financial sector.
“We want customers to have the confidence to come to NAB because of the products and services we provide – not because a third party received a payment to recommend us,” Chronican said in a statement.
The government-backed inquiry heard that dozen of NAB bankers had falsified loan documents and signatures, and provided unsuitable loans to benefit from the scheme.
NAB’s introducer program brought in over A$24 billion ($17 billion) in home loans during the period when the misconduct occurred from 2013 to 2016, lawyers for the inquiry said.
Consumer group Choice said NAB’s move came too late given the inquiry had revealed Australia’s fourth-largest bank knew there were problems with the program in 2015.
“The Royal Commission revealed that many Australians were duped by introducers into unaffordable loans and defaulted as a result,” Patrick Veyret, CHOICE Policy and Campaigns Adviser said.
“It’s shameful it’s taken this long for them to act.”
