Big four ASX bank National Australia Bank Ltd (ASX: NAB) has said it has made progress on some of the Royal Commission recommendations.
NAB is one of the four largest financial institutions in Australia in terms of market capitalisation, earnings and customers. However, in 2018, it was Australia’s largest lender to businesses and has operations in wealth management and residential lending.
NAB’s Royal Commission Progress
This morning, NAB issued a response to the final report of the Royal Commission.
NAB CEO Philip Chronican said that NAB supported 72 of the recommendations, suggesting that it doesn’t support the other recommendations.
The bank said it will work with the Government and regulators to take action on the remaining areas which relate to broker arrangements, the definition of small business and BEAR accountabilities.
Some of the changes that NAB has already implemented include not charging default interest to agricultural customers impacted by drought, introducing a Board Customer Committee to better oversee NAB’s processes to ensure fair products and service outcomes and to evaluate customer feedback, and remove grandfathered commissions by NAB financial planners.
NAB also said it’s extending the Code of Banking Practice to businesses with less than $5 million of total borrowings, up from $3 million.
NAB CEO Philip Chronican said: “The Royal Commission’s recommendations will help lead to a better, more customer-focused industry as organisations change in response.
“The Commission has also rightly challenged NAB to close the gap between where we are today and where we need to be.”
Is NAB A Buy?
It might be a bit risky to not support some of the recommendations at this stage, so soon after the Royal Commission.
NAB does have an attractive fully franked dividend yield of 7.9%, so if it keeps maintaining the dividend then it could provide attractive dividends. But, I prefer to invest in businesses that can re-invest into the business at high rates of return, such as the ones on the ASX mentioned in the free report below.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).