Australian sovereign fund criticizes NAB leadership change | Investment News

FILE PHOTO – The National Australia Bank logo is posted outside its headquarters in central Sydney, Australia on August 4, 2017. REUTERS / David GrayReuters

SYDNEY (Reuters) – The head of the Australian sovereign fund Monday criticized National Australia Bank Ltd for the double resignation of its CEO and chairman after an investigation into a misconduct, saying it was "not a good practice "for both.

Peter Costello, President and former Federal Treasurer of Future Fund, informed the major Australian banks that investors were paying particular attention to governance issues following the year-long investigation into abuse. financial sector. The Future Fund is Australia's largest investor with $ 8.5 billion ($ 6 billion) in equities.

"If the NAB behaved well … the president would leave first, then a new president or president would appoint the general manager," Costello told reporters at a news conference about the resignation of the chief executive of the company. NAB, Andrew Thorburn, and President Ken Henry.

"I do not think it's a good practice to have an outgoing president to appoint the new CEO (because) the first thing any CEO going into the NAB will want to know, is who is the chairman. I do not know if they've managed the transition well. "

Thorburn and Henry resigned Thursday in the days following the release of the final report of the Royal Commission's investigation, which revealed that greed and wrongdoing were widespread in the financial sector.

The CEO would leave this month but Henry would stay until a replacement was found, the bank said.

Henry said last week that he should remain to "ensure an orderly succession of the general manager and to ensure an appropriate renewal of the board". When asked about Costello's comments, a representative of NAB did not comment further.

Costello also said the Royal Commission had shown that regulators needed to "do a lot more" to clean up the financial system.

Costello said the Australian $ 147 billion sovereign fund posted a return of 5.8 percent for the end of December, below the target of 6.6 percent, but better than the average return of 0.6 percent. % of funds managed following turbulence in end-2018 markets.

(Report by Byron Kaye, edited by Stephen Coates)

Copyright 2019 Thomson Reuters.