“We will not let time dull the impact of the royal commission, nor will we gloss over its findings,” NAB chairman Philip Chronican said.
He said: “I understand and acknowledge where NAB has fallen short.
“Now, as your chairman, I accept accountability for making sure we change and our customers, our people and our shareholders can all see the benefits of that change.”
The bank has also revealed that it may have breached the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF), with Mr Chronican telling shareholders: “The status and age of outstanding risk issues is transparent, and customer impacts are better understood.
“On this, the board is acutely aware of the risk that our banking services could be used by those with criminal intent, and takes its obligations under the various anti-money laundering, counter-terrorism financing and sanctions laws very seriously.
“We actively support law enforcement agencies in finding and stopping criminals from using the bank to pursue criminal activity.
“Inevitably, given the millions of customers we have and the millions of transactions we process, there will be times when our processes fall short.
“Where this happens, we let our regulator know and we move to fix the issues promptly.”
Indeed, the annual financial report for 2019 showed that the bank has reported “a number” of AML/CTF compliance breaches to relevant regulators and has responded to a number of requests from regulators requiring the production of documents and information.
According to NAB, identified issues include “certain weaknesses with the implementation of Know Your Customer requirements, other financial crime risks, as well as systems and process issues that impacted transaction monitoring and reporting in some specific areas”.
While the bank said that the potential outcome and total costs associated with the investigation and remediation process remain “uncertain”, they could be “significant”.
Mr McEwan told shareholders: “It is non-negotiable to manage financial and non-financial risks to protect our customers and your bank.
“As CEO, I will engage constructively with our regulators. Our interests are aligned. Regulators want safe, sound banks that look after customers. We want the same.
“I will quickly tell them when we have a problem. I will make every effort to ensure our relationships with regulators are transparent and constructive,” he said.
He concluded: “The foundations are there for NAB to be a leading bank in Australia and New Zealand.
“I see great opportunity in our business and take confidence from the people who stand behind it.”
The AML/CTF revelation comes less than a month after the major bank admitted to breaching the NCCP in more than 85 per cent of the 297 alleged contraventions regarding introducer-originated home loans. This came after the Australian Securities and Investments Commission commenced proceedings in the Federal Court against NAB over allegations that 16 bankers accepted loan information and documentation from 25 unlicensed introducers in relation to 297 mortgages.
[Related: CBA, NAB clarify start date for FHLDS]