Royal commissioner Kenneth Hayne has cast doubt on the capacity of National Australia Bank's most senior officer bearers to take responsibility for improperly levying advice fees on customers and to fix the company's defective culture.
In a damning commentary on evidence given by NAB chair Ken Henry and chief executive Andrew Thorburn during the commission's hearings late last year, Hayne confesses in his final report to holding a personal fear that there may be "a wide gap between the public face NAB seeks to show and what it does in practice".
The blunt assessment could potentially trigger a review of leadership roles by the NAB board less than a few months after Henry declared at the annual meeting that Thorburn would remain CEO until at least 2020.
"Having heard from both the CEO, Mr Thorburn, and the chair, Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned," commissioner Hayne observed in his final report.
"More particularly, I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly."
Henry tried to reassure shareholders in December that the bank was on a clear path to remediating customers who were collectively charged more than A$100 million for fees for financial advice they never received.
The NAB chairman rejected a suggestion from one shareholder that he was about to dismiss Thorburn.
"We have a clear plan for NAB and remain confident in our future under the leadership of CEO Andrew Thorburn and an executive team of truly global quality," Henry said at the time.
Hayne was not impressed by answers given by Henry and Thorburn to questions at commission hearings on the fees for no service scandal at NAB.
"I thought it telling that Dr Henry seemed unwilling to accept any criticism of how the board had dealt with some issues," the royal commissioner states in his report.
"I thought it telling that Mr Thorburn treated all issues of fees for no service as nothing more than carelessness combined with system deficiencies when the total amount to be repaid by NAB and NULIS on this account is likely to be more than $100 million.
"I thought it telling that in the very week that NAB's CEO and Chair were to give evidence before the commission, one of its staff should be emailing bankers urging them to sell at least five mortgages each before Christmas."
Chairs and chief executives of the other three major banks were spared such brutal critiques from Hayne.
The royal commissioner was persuaded by testimonies of CEOs at ANZ and CBA that they were aware of the size and nature of the challenges before them.
However, evidence presented to the hearings of the commission highlighted major failings across the financial services sector in the reporting of incidents relating to fees for no service.
Hayne has recommended that law enforcement agencies examine evidence concerning fees for no service at two unnamed major financial institutions that could lead to criminal prosecutions.
Another 21 matters, involving potential criminal conduct in wealth management and insurance sectors, have been referred to regulators for assessment.
NAB has not yet responded to Hayne's assessments of its senior officers.
In a statement filed to the ASX last night, the bank blandly said "we will provide further updates as appropriate."