NAB Chairman Charles Allen Resigns Amidst Currency Trading Scandal

Strategic Insights -

NAB chairman Charles Allen resigned two weeks after chief executive Frank Cicutto stepped down, leaving the bank to deal with a succession of crises. The bank has suffered a crisis in reputation, poor staff morale, and control breakdowns, according to the newly appointed chairman, Graham Kraehe. Kraehe, who was already an NAB director, has vowed to deal with the foreign currency options matter transparently and accelerate the renewal of the board.

Key Takeaways:

  • Charles Allen, the National Australia Bank (NAB) chairman, resigned amidst a currency trading scandal, following the resignation of chief executive Frank Cicutto two weeks prior.
  • Graham Kraehe, 61, was appointed as NAB's third chairman in three years, with a focus on dealing with the foreign currency options matter in an open and transparent way.
  • The bank has endured a series of crises, including the interest rate calculation bungle involving HomeSide in the US and the recent currency scandal, which has cost $360 million.
  • Four NAB traders remain suspended on full pay pending the outcome of an internal bank report and investigations by regulators and the Australian Federal Police.
  • Kraehe has committed to speeding up the renewal of the board and creating a more open and transparent culture at the bank.
  • Kraehe's appointment has been met with criticism from the Australian Shareholders' Association, which has called for him to relinquish some of his other directorships.
  • Association chairman John Curry stated that Kraehe's equivalent of eight directorships would be detrimental to the shareholders of his smaller companies.

Statistics:

  • $360 million: The cost of the recent currency scandal at NAB.
  • 4: The number of NAB traders remaining suspended on full pay pending investigations.
  • 2: The number of weeks it took for Charles Allen to declare his intention to resign as chairman after Frank Cicutto's departure.

Sources:

  • Australian Associated Press (AAP)
  • The Australian Shareholders' Association
  • National Australia Bank (NAB)