While mainstream journalists write puff pieces about the "new" NAB under Cameron Clyne, it continues its predatory banking practices. Associate Professor Evan Jones reports.



ON SATURDAY 9 June, Fairfax banking journalist Eric Johnston published an article on the National Australia Bank’s CEO, Cameron Clyne. It begins:
It's a chilly Tuesday morning and Cameron Clyne is sitting in a warm glass-walled radio studio when a producer flicks the switch to a caller.’

(Clyne had been interviewed by Neil Mitchell on Melbourne Radio 3AW, 29 May.)

It continues:
‘Even with a towering two-metre frame, Clyne - a former rugby union lock - may not be the most immediately recognisable of the nation's bank executives.’ And: ‘Clyne has broken the nexus with [the NAB’s reputed blue-blood] past. Clyne, who grew up in Penrith, is on a mission to turn NAB into the people's bank.’

The article is titled ‘A bank boss with the common touch’ (The Age), and ‘Clyne’s plan to make popularity a winning play’ (Sydney Morning Herald). Then there’s Fairfax’s Elizabeth Knight, with ‘Happy customers make for a happy Clyne’, 23 May, in The Age and Sydney Morning Herald.

What’s going on? For a bank CEO not ‘the most immediately recognisable’, Cameron Clyne is getting a lot of media exposure, all favourable. But who is initiating this exposure?

In December 2011, I had an article in the Canberra Times (Fairfax-owned but an independent editorial) highlighting longstanding malpractice by the Big 4 banks against their small business/family farmer customers, with the NAB as Number One guilty party.

Are Johnston, Knight and Yours Truly referring to the same institution? Admittedly, the journalists refer only to retail banking, in which the NAB runs a tolerable (if far from unblemished) outfit. My beef concerns the SME/farmer sectors, which the media (with rare exceptions) will not touch. In that latter context, no journalist with even a modicum of self respect would have the gall to write such flourishes as ‘common touch’, ‘happy customers’, ‘popularity a winning play’, or the notion of turning NAB into ‘the people’s bank’. With respect to the NAB’s SME/farmer constituency, such beautiful phrases are preposterous.
Former rugby union player, Cameron Clyne.


If the pre-determined object is to write happy stories about happy customers, then corruptly treated customers cannot be written about by definition. And if such customers don’t get media exposure, they don’t exist. Without critical media scrutiny, the NAB can insouciantly claim (submission to the ‘post-GFC banking sector’ inquiry, 5 June):
As a large domestic commercial bank, NAB plays a critically important role in our national economy. We consider our ongoing support for SMEs and business generally during the GFC as paramount importance. NAB leads the way in this area with almost a quarter of all business lending (APRA data, March 2012 – 24.6%). In lending to small and medium businesses our market share is about 30%.

In a healthy economy, financing the productive capacity of the SME sector is critical to Australia’s long term economic prosperity. Access to credit on fair terms and conditions to SMEs helps those businesses grow and in turn create employment which creates more growth and wealth. It is a virtuous cycle and reflects the key role banks play in society.

As Australia’s leading business bank, NAB Business Banking has a team of over 5,000 business and specialist bankers nationally. The business includes operations, marketing, and finance professionals who service the full spectrum of the business sector … Furthermore, NAB’s unique and enduring relationship with Australian business enables it to act as a leading advocate for the business community, in particularly the SME sector.

All so much hyperbole. In the real world that doesn’t exist in Mediaworld’s Bankworld, when it comes to foreclosing and subsequently destroying a customer, almost no tactic is beyond the NAB. Of course, it subcontracts a lot of the sleazy pointy end stuff to the sectors dependent on banks for their bread and butter — lawyers (including the judiciary itself), receivers, valuers, real estate agents, and so on.

The seed for later foul play is often sown right at the outset of the bank-customer relationship. Incorrectly documented loan applications or dysfunctional facilities – either incompetently or unconscionably conceived – facilitate the later dénouement of the customer.



The NAB has only one CEO, so Clyne presides over the dark side as well as the happy side. Is Clyne familiar with the skullduggery and its extent? It’s true that Clyne inherited a bank whose tendency to corrupt practices was inbuilt, and it is possible that a man at the top would prefer not to familiarise himself with the sordid detail that is the responsibility of well-entrenched functionaries in the hierarchy. After all, his work is cut out feeding the spin machine.

But Clyne knows that the hungry beast is within and he condones its nurturing. I wrote to Clyne in July 2010, noting the NAB’s history of malpractice against SMEs/farmers, highlighting instances of some current dodgy defaults and foreclosures — and suggesting a win-win way forward:
From a detached outsider’s perspective, the arrival of a new broom at the top of a large corporation would appear to bring the mandate, indeed imperative, to clean out the cobwebs. …

The bank has accumulated a considerable mass of small business/farmer casualties whose economic livelihoods have been destroyed, who are hurting, and who are deeply bitter. The parlous status of these people is, in many cases, of the bank’s doing.

In my view there is a good argument for a strategic reorientation of reconciliation towards these people. Compensation is in order. What is several hundred million dollars (perhaps even a billion) if the bank were to clean the slate and build a new reputation on competence and rectitude? The bank would be home clear indefinitely for dominance in the SME/family farmer market.

I also noted that any expenditure on such slate-cleaning could be readily recovered from draining the huge advertising/PR budget and the ongoing legal expenditure committed to destroying customers.

I received a reply from one, James Stafford, Manager, Office of the Customer Advocate, claiming to respond “on Mr Clyne’s behalf”. Stafford claims:
“[NAB] respectfully disagrees with both your interpretation of some of the cases you have cited and of your assessment of NAB’s treatment of customers under financial stress.”

Only some? The signatory infers knowledge of the victimisation cases I mention — even though I gave no names. Or perhaps, without bothering to check details (Stafford himself would have no knowledge of the cases), the line taken is that the NAB is always right, of necessity, retaining absolute discretion in the treatment of its customers, because nobody will prevent it doing otherwise. (Stafford has written to specific customers who have complained to and sought assistance from Clyne, advising them to go away.)



Well, there was one case in which the courts (rare) did prevent the NAB from destroying a customer at its discretion, in Kay v NAB (NSWSC 1116, 30 September 2010) Rothman J found:
“From day one of the contract, NAB was in breach … NAB continued in breach for the duration of the contract”.

Rothman awarded Kay et al compensation for NAB’s illegal penalty interest charges. The NAB, unrepentant, was initially intending to appeal, but eventually succumbed to mediation. The media person who had given Kay et al crucial support during a long conflict got Independent Senator Nick Xenophon along to the mediation. Here is an exchange at hearings of the Senate Economics Reference Committee inquiry into banking competition in late 2010 (13 December):
Senator XENOPHON — Finally, I attended, as did Senator Williams, for much of a day a mediation between the bank and three individuals—Ozzie Inak, Memhet (sic) Ali Kay and Memhet (sic) Canli. This was in relation to what I think you could say was quite an ugly dispute that ended up in the New South Wales Supreme Court before Justice Rothman, where certain findings were made against the bank. Fortunately, that matter was resolved as a result of the intervention of senior bank officers — and all credit to you for that. But it was a long, drawn out dispute; it was very ugly, it was very unfortunate in terms of the personal impact it had on a number of those individuals. What can be done so that these sorts of things do not get out of control? Again I emphasise that fortunately it has now been resolved. How do you prevent things from going haywire in the first place so that you do not have that enormous toll on the individuals and also the resources of the bank tied up in that sort of long-running dispute?

Mr Clyne — Obviously, it would be inappropriate for me to comment—

Senator XENOPHON — Just in terms of the systemic issues.

Mr Clyne — We have over three million customers in Australia and, inevitably, given the millions of interactions we have with those customers, there are going to be situations where we do not do the right thing by them. What we have been trying to drive is, I think, evidenced by our push on the fee front. We have been heavily criticised for that by a range of people who suggest that we are trying to drag the industry down. What we are trying to do — and what we are saying — is: ‘No. We want to provide a competitive offering.’ At the heart of that is our desire to have a better relationship with our customers. There will be situations — not wanting to comment on the specifics of that case — where we do not do the right thing by our customers. I think what we have to do as an industry, and certainly what NAB is committed to doing — is step up, acknowledge where we have made a mistake and try to rectify it. We deal in a regulated industry as well and, in many cases, you have to deal in black and white. You have to be very clear in the terms that you are providing and in the nature of the contract you have between the bank and the customer. Inevitably, when there is a dispute, there is grey. Unfortunately, those things often take time to resolve because you do not want your bankers dealing in grey. You need to do most of what you do in black and white in order to make it fair and transparent for the customer, and sometimes it does need to be escalated, unfortunately, where people make a pragmatic and common sense assessment on individual cases. We would like to see that resolved more quickly in most cases, but that is generally, unfortunately, what drives it. It gets to a situation where there is a dispute and an element of grey. Generally, it has to then go to more senior members in the bank to try and —

Senator XENOPHON — Although, in this case the Supreme Court said that it was black and white.

Mr Clyne — I cannot comment on the individual details of that case.



Here is Clyne in the flesh, with no Office of the Customer Advocate as cover. The ‘push on the fee front’ is a regular diversion. Fee waivers are irrelevant if the customer is being taken down for hundreds of thousands or millions of dollars.
I think what we have to do as an industry, and certainly what NAB is committed to doing — is step up, acknowledge where we have made a mistake and try to rectify it.

Here Clyne knowingly misleads the Committee. The NAB never acknowledges a mistake — and is not happy to rectify one if called to account. The same incompetent and corrupt practices continue under Clyne’s watch (or negligence?). It will be business as usual.

The Australian Prudential Regulatory Authority’s March 2004 Report into Irregular Currency Options Trading at the National Australia Bank provided a rare insight into the phenomenon of corporate culture and dysfunctional cultures in particular. (This report has been removed from the NAB website, and is not available on the APRA website.) Here are some snippets:
Lack of willingness by senior management to accept and acknowledge issues, resistance to escalation of issues and less-than-open responses to ‘external’ parties all are significant drivers of culture within an organisation, and so signals what is expected of staff within that environment. (p.75)

Managing the message was frequently given equal, or greater, priority than dealing with the underlying issue. (p.74)

Managing the message remains the NAB’s top priority. Clyne’s 29 May performance on 3AW has one online commenter noting astutely:
‘He sells this crap like a used car salesmen selling a car with a blown engine for full price. Conveniently not addressing the most important issues and relentlessly presenting the irrelevant.’

In October 2011, the NAB appointed ex-Treasury Secretary Ken Henry to its Board. In June 2011, ex-Secretary Henry had been appointed by the Gillard Government as a special adviser on economic matters. An online commenter to a Business Spectator article (now unavailable) noted:
'This is the best news that NAB has had in many months. In appointing Dr Henry they have massively increased their corporate board knowledge, networking ability with governments of all persuasions here and overseas, understanding of corporate governance and captured one of the few innovative thinkers in the financial sector who really understood the GFC. What a coup!'

What a coup indeed. Except that only one segment of this effusive remark is accurate, namely ‘networking ability with governments of all persuasions’. Henry, who presided over lax regulation and subsequent subsidisation of the banking sector, is not on the NAB Board to enhance its governance (just as the earlier appointment of ex-Victorian Premier Steve Bracks was not done to enhance its ‘corporate social responsibility’). Ditto the NAB appointment of Arthur Sinodinos to senior management positions (August 2007 – October 2011) between Sinodinos’ job as adviser to Prime Minister Howard and his later appointment as Liberal Party Senator, at the same time holding down senior roles in the NSW branch of the Liberal Party.

These are prime examples of what the French deliciously call pantouflage. But here, it’s not a matter of buying expertise, and not merely a matter of cushy payoff jobs for the privileged recipients, but the purchase of political influence. It’s all about heading off potential adverse intrusions from governments responding to public complaints.

The Johnston article informs us:
When it comes to Canberra, Clyne prefers a direct approach. … Both sides are very accessible, he says. "I have Wayne Swan's mobile and I have Joe Hockey's mobile and they answer their phones. They have mine," Clyne says.

Banks have a legitimate interest in public policy, particularly policy that has an impact on the broader economy.

What is Clyne doing having direct access to Swan and Hockey? And vice versa? Moreover, Clyne sees this access as legitimate, rather than untoward. The Johnston sentence quoted above should really read:
Banks have a legitimate interest in public policy, particularly policy that has an impact on the banking sector’s prerogatives.’
Hence the phone access, and Henry and Sinodinos as intermediaries in power politics.

The NAB has only one CEO. Clyne is the boss, the capo di tutti.

Then why are long time Fairfax journalists writing puff pieces on this man’s seeming ‘muscular’ transformation of the NAB. I stopped reading the Australian Financial Review several years ago because its senior banking writer Andrew Cornell had for years been sycophantically reporting self-interested bank CEO blather as analysis. The Sydney Morning Herald and The Age have joined the team, such that Fairfax is now an integral element in the NAB spin machine.

Meanwhile NAB victims cry in the wilderness, hoping that somebody, somewhere, will take NAB spin at face value and respond sympathetically to their ill-treatment.

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