National Australia Bank yesterday announced that its chairman would follow its chief executive through the exit door to take responsibility for a series of disasters which have caused mounting unrest among shareholders.
Charles Allen has been chairman of NAB, which owns Yorkshire and Clydesdale banks in the UK, for two and a half years. He stepped down yesterday, taking with him director's fees and pension savings in the region of A$1m (£437,000).
The move comes more than two weeks after NAB's chief executive, Frank Cicutto, bowed to shareholder pressure and resigned. Leadership of NAB, Australia's largest bank, now swings into the hands of John Stewart, the Scottish banker who joined the group from Barclays last year. Mr Stewart, the former chief executive of Woolwich, had been head of NAB in Europe.
Mr Cicutto, who received compensation of nearly £1.5m, and Mr Allen presided over a series of mistakes, including rogue currency trades in Australia and a botched raid on the shares of insurer AMP.
NAB stunned the market on 13 January when it revealed unauthorised trades in foreign exchange options tied to a bet on a rebound in the US dollar that went sour. The bank suspended four currency-options traders pending the outcome of internal and external inquiries into how its trading limits were breached.
A PricewaterhouseCoopers report into the matter is due for release early next month. NAB had to admit last month the losses would reach A$360m, double its original estimate.
Writing to shareholders yesterday, Mr Allen said: "Currently, the bank is dealing with the currency options issue. This should be seen in the context that it is a small part of a very large and successful international organisation. I am confident the National will rise above its present difficulties to demonstrate its true worth."
Mr Allen will be replaced by Graham Kraehe, who joined as a non-executive director in 1997.
Mr Kraehe, 61, is best known as the former chief executive of Southcorp Holdings, the maker of Penfold's wines.
A number of high-profile bankers have passed through NAB in their careers, including Fred Goodwin, now chief executive of Royal Bank of Scotland, and Michael Soden, who, as head of Bank of Ireland, attempted an audacious bid for Abbey.
Mr Kraehe said the priority was to appoint two new board members with banking experience, including one to be based in London.Reuse content