It looks like National Australia Bank Ltd (ASX: NAB) is tipping its hat to the old saying: “If you can’t beat ’em, join ’em.” In reports circulating yesterday, NAB has made an eyebrow-raising new hire amid its investigation by financial watchdog AUSTRAC.
The Australian Financial Review reported that NAB has employed former AUSTRAC CEO Paul Jevtovic to spearhead compliance within the bank.
Bringing in the big guns
Between beefing up its secretive internal Project Apollo and making strategic hires, NAB looks to be upping the ante amid AUSTRAC’s formal investigations into the bank’s possible breaches of Australia’s anti-money laundering laws.
Reportedly, in September, Jevtovic will jump headfirst into compliance as NAB’s Executive Money Laundering and Reporting Officer.
Jevtovic served as CEO at AUSTRAC for two and a half years before finishing in April 2017. Since then, he’s been working for HSBC – originally as head of financial crime threat mitigation, before shifting to regional money laundering officer and head of financial crime.
While the timing is uncanny, ASX-listed NAB had reportedly been working on hiring Jevtovic for months.
Addressing NAB’s elephant in the accounts
No doubt NAB will be looking to tap the former AUSTRAC CEO’s knowledge of financial crime mitigation. It’s an area Australia’s second-largest bank has been grappling with over the years.
Sources have claimed NAB is working with technology more than 20 years old. It’s further alleged analysts are sorting through bank statements manually to determine suspicious activity.
Although AUSTRAC is not considering civil proceedings against the bank at this stage, the “serious concerns” of potential breaches of anti-money laundering and counter-terrorism financing legislation still linger.
In the official letter to NAB, AUSTRAC said:
In particular, the seriousness of self-disclosed matters presented to AUSTRAC over a prolonged period combined with the accompanying closure rates is concerning.
NAB shares underperform big four peers
Shareholders will be disappointed to know NAB shares have underperformed against other members of the big four banks. While the banking sector has enjoyed a strong rebound over the past year, the NAB share price has been the laggard of the bunch.
National Australia Bank shares have climbed by around 32% in the past year. Meanwhile, Commonwealth Bank of Australia (ASX: CBA) has rallied by nearly 42%, Australia and New Zealand Banking Group Ltd (ASX: ANZ) has surged 38%, and Westpac Banking Corp (ASX: WBC) has climbed by 35%.