Perhaps unsurprisingly, the personal criticism of National Australia Bank Ltd (ASX: NAB) CEO Mr Thorburn and Chairman Dr Henry in the Royal Commission led to their resignations.
It's not as though Commissioner Hayne gave Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ) or Westpac Banking Corp (ASX: WBC) a clean bill of health. But, at least the CEOs seemed completely contrite about what had happened.
Some cynical people may say that the management and boards of the other big banks felt like the NAB leadership, but they put on the right PR face.
NAB has had a tough start to the year. Its CEO was on long service leave for a long time, it was the sole bank to increase interest rates recently (following the others a few months ago) and now it doesn't have its CEO or Chairman.
But I don't think it's actually going to change that much for NAB. The banking divisions will continue as normal, the remediation will continue and ASIC & APRA will supposedly increase their oversight.
The vast majority of the public would say that CEOs are paid too much. Perhaps they are. But they are paid to make the a small number of important decisions. They are not frontline staff nor day-to-day managers.
Mr Thorburn was at the helm for the divestment of Great Western Bank and CYBG Plc (ASX: CYB). In terms of business decisions I think he probably made the right moves.
In terms of the rest of the bank, NAB will keep on going.
Is NAB a buy?
Compared to the other big banks NAB clearly has the biggest grossed-up dividend yield of 11.5%. If all banks continue to hold their dividends for the next couple of years then NAB will pay the best dividends during that time.
A new (external) CEO and Chairman will help NAB reset its business and perhaps win back favour. Whilst NAB may be one of my preferred major banks, I can think of many other ASX shares I'd rather buy for income with the headwinds like falling house prices, remediation, class actions and competition hurting NAB.
