NAB’s new CEO Ross McEwan urged to get on top of bank’s AUSTRAC risks


Mr Dive said another focus for Mr McEwan would be NAB’s plan to separate its wealth management arm, MLC, which has been delayed amid hefty compensation costs and royal commission fallout.

Principal at fund manager Alphinity, Andrew Martin, also nominated AUSTRAC risks as a key priority for Mr McEwan, who was previously Royal Bank of Scotland CEO, and before that a senior Commonwealth Bank executive.

“Frankly I would be surprised if he did not pick up the phone to AUSTRAC. That would be, I suspect, the first thing he does,” Mr Martin said.

Mr Martin said the AUSTRAC issue was a big unknown risk for NAB, given there is no certainty whether the bank will face a lawsuit over the matter. Its annual report last month said the bank could face “significant monetary penalties” over the issue, but this remained uncertain.

As bank profits come under pressure, fund managers are also keen on any further cost savings Mr McEwan may squeeze out of the bank’s “transformation” plan, which has included thousands of job cuts.

Clime Asset Management senior analyst David Walker, said: “What’s required here is to take control of NAB’s costs and to understand the potential for further cost savings.”

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When he was appointed in July, Mr McEwan said he would be looking at whether the transformation plan, which also includes a heavy investment in technology, was “fast enough”.

Mr McEwan, who was not interviewed for this story, is scheduled to spend his first day as CEO meeting with senior executives, then visiting parts of the bank including a branch, a call centre, a business banking centre, and a digital team. He will also this week meet the bank’s top 100 managers, and will address the bank’s staff via a live-stream.

Mr McEwan is starting as CEO before the NAB’s annual  meeting on December 18, where it will be trying hard to avoid a second backlash on executive pay after a record-breaking revolt last year. In a positive early sign for the bank on this front, proxy firm ISS is recommending a vote in favour of its remuneration report.

Another issue facing Mr McEwan, and all big four CEOs, is the question of how to reward customer loyalty, as the competition watchdog investigates the common practice of offering deep discounts for new customers.

Soon after he took the reins at RBS in 2014, Mr McEwan said the bank would “stop offering deals and products to new customers that we are not prepared to offer our existing customers”.

However, some in the market are sceptical about how much change Mr McEwan can realistically bring about on the issue of discounting, which bankers say is the result of competition for new business.

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