National Australia Bank shares fall after ouster of CEO and chairmanBusiness | 8 Feb 2019 9:41 am
National Australia Bank shares fell after the chief executive officer and chairman both resigned, becoming the highest-profile casualties of a sweeping inquiry into misconduct in the country’s financial industry, Bloomberg reports.
Andrew Thorburn, 53, and chairman Ken Henry, 61, announced their departures late yesterday, just days after being the target of withering criticism in the Royal Commission’s final report, which questioned whether they were capable of leading the lender’s response to a string of scandals.
The stock declined as much as 1.2 percent in early Sydney trading, and was down 13 cents to A$24.80 at 10:10 a.m. local time.
Thorburn’s replacement will have to restore customer trust in the lender and steer it through a tougher landscape of falling earnings, a sinking housing market and rising funding and compliance costs. They will also inherit Thorburn’s overhaul of the bank, including the elimination of 4,000 jobs and increased spending on technology and process-automation.
"The removal of the current CEO in the middle of a major transformation increases execution risk,” Macquarie Group analysts said in a note.
In further fallout from the inquiry, National Australia said it will delay the planned IPO of its MLC wealth management unit as fee income and commissions come under pressure.
"With management attention focused on shorter term issues, execution risk around the core business rises,” Citigroup Inc. analysts led by Brendan Sproules said in a note. Citi cut its share price target to A$29.50, but maintained a buy recommendation on the stock. -Photo: news.com.au