National Australia Bank

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National Australia Bank Limited
Type	Public limited company (ASX: NAB, LSE: NAB, NYSE: NAB, TYO: 8637 )
Founded	June 23, 1893
Headquarters	Melbourne,  Australia
Key people	Michael Chaney, Chairman John Stewart, CEO Ahmed Fahour, CEO Australia Region
Industry	Finance and Insurance
Employees	47,025 2004 Annual Report
Slogan	"We help our customers achieve their aspirations"
Website	www.nab.com.au

The National Australia Bank or nab (ASX: NAB, LSE: NAB, NYSE: NAB, TYO: 8637 ) colloquially the National or the NAB. The NAB is part of the NAB Group. It is the largest bank in Australia by assets, and 28th largest in the world.

Contents 1 Core business 2 History 3 Sponsorship 4 Leadership in CRM (Customer Relationship Management) 5 Recent business issues 5.1 Foreign exchange staff fraud 5.2 Tax evasion and customer overcharging in Ireland 6 References 7 External links

[edit] Core business

The National Bank Group is organised around three regions: Australia, UK/Europe and New Zealand. These regional business units include the retail bank, the business bank, wealth management and nabCapital.

[edit] History

• 1858: Alexander Gibb, a Melbourne gentleman, enlisted Andrew Cruickshank, a local merchant and pastoralist, to raise the capital to establish National Bank of Australasia (NBA) with headquarters in Melbourne. Cruickshank became NBA's first chairman and Gibbs left after being passed over for the position of General Manager.
• 1858: The bank opened a branch in South Australia.
• 1859: NAB established a branch in Mauritius, but closed it within a year.
• 1864: NAB opened a branch in London to handle financing and payment for Australian exports of wool, gold and other commodities, and also imports to Australia. NBA also opened its first branch in Tasmania.
• 1866: NAB opened its first branch in Western Australia.
• 1885: NAB opened its first branch New South Wales.
• 1893: NAB was one of the many banks that closed its doors during the banking crisis that year. It re-emerged as a public limited company, incorporated on June 23, 1893.
• 1918: The bank acquired Colonial Bank of Australasia (est. 1856), which brought additional branches in Victoria and New South Wales.
• 1920: NAB opened its first branch in Queensland.
• 1922: The bank acquired Bank of Queensland (est. 1917), with its branches in Queensland, New South Wales and Victoria.
• 1946: NAB opened a representative office in Tokyo that it upgraded to a branch in 1985.
• 1948: The bank acquired the Queensland National Bank (est. 1872), with its branches in Queensland, New South Wales and Victoria. The Bank of Queensland was the result of the merger in 1917 of Royal Bank of Queensland (est. 1886) and Bank of North Queensland (est. 1888).
• 1955: The bank acquired Ballarat Banking Company (est. 1865) in Victoria.
• 1971: NAB opened a branch in Singapore.
• 1973: NAB opened a representative office and took a minority interest in a merchant bank in Jakarta. It withdrew from the merchant bank in 1984.
• 1974: NAB opened a representative office in Hong Kong that it upgraded to a branch in 1985. It also took a minority position in a merchant bank in Kuala Lumpur from which it withdrew in 1984.
• 1977: NAB entered the US with a branch and an agency in Los Angeles that it closed in 1993.
• 1978: NAB and Mitsubishi Bank and Trust established a 50-50 joint venture merchant bank in Hong Kong, but withdrew in 1984.
• 1981: NAB merged with the Commercial Banking Company of Sydney to form National Australia Bank (NAB).
• 1982: NAB opened a branch in Chicago and a representative office in Beijing.
• 1983: NAB opened a representative office in Dallas and another in Seoul that it upgraded to branch in 1990.
• 1984: NAB opened a representative office in San Francisco, another in Kuala Lumpur, and a third in Athens that it closed in 1989.
• 1985: NAB opened a representative office in Frankfurt that it closed in 1992.
• 1986: NAB opened a representative office in Atlanta, another in Bangkok, and a third in Taipei that it upgraded to a branch in 1990.
• 1987: NAB bought Clydesdale Bank (Scotland) and Northern Bank (Northern Ireland and Republic of Ireland) from Midland Bank. It then rebranded Northern Bank branches in the Republic of Ireland to National Irish Bank and changed both banks' logos from that of the Midland Bank.
• 1988: NAB opened a representative office in Shanghai that it closed in 1990.
• 1989: NAB opened a representative office in Houston and another in New Delhi.
• 1990: NAB bought Yorkshire Bank (England and Wales).
• 1991: NAB rationalized its operations in the US and closed its offices in Atlanta, Chicago, Dallas, Houston, and San Francisco.
• 1992: NAB bought Bank of New Zealand, which at the time had about a 26% market share in the New Zealand market.
• 1995: NAB bought Michigan National Bank (MNB).
  

  

  Previous National Australia Bank logo
• 1996: NAB launched it's customer facing website in Australia - http://www.national.com.au/
• 1997: NAB bought HomeSide Lending(see Washington Mutual), a leading US mortgage originator and servicer based in Florida.
• 2000: NAB sold Michigan National Bank to ABN AMRO.
• 2000: NAB acquires MLC in June 2000 for $4.56bn - one of the biggest mergers in Australian corporate history.
• 2001: NAB sold HomeSide’s operating assets for US$1.9b to Washington Mutual, the largest US savings and loan company, as well as the mortgage unit's loan-servicing technology and operating platform. NAB booked two write-downs associated with the US subsidiary, HomeSide. First, in July 2001, NAB had a $450 million write down of the value of its capitalized mortgage servicing rights (CMSRs) during the quarter ending June 30, 2001, and was the result of exceptionally high mortgage refinance volumes which lowered the value of the CMSRs, combined with a more challenging capital markets environment in which to hedge interest rate risk. This was followed shortly by a second write-down reported in September totalling $1.75 billion; this second write-down consisted of US$400 million from an incorrect interest rate assumption embedded in the mortgage servicing rights valuation model, US$760 million from changed assumptions in the model flowing from the continued unprecedented uncertainty and turbulence in the mortgage servicing market, and US$590 million from writing off of the goodwill. In total, NAB booked $2.2 billion in losses due to HomeSide.

• 2004: National@Docklands new flagship development officially opened at Melbourne Docklands.
• 2004: AU$360 million foreign currency options losses are followed by the resignations of the CEO and Chairman of the Board. Investigations by Price Waterhouse Coopers and the Australian Prudential Regulation Authority highlight a need for cultural change.
• 2004: Ahmed Fahour appointed new CEO of Australia.
• 2005: NAB sold Northern Bank and National Irish Bank to the Danish Danske Bank.
• 2006: The bank refreshes its image, cleaning up its older logo, and calling itself the 'NAB' (read as one word, not spelt). Continues major AFL sponsorship with added naming rights for AFL Auskick.
• 2006: NAB wins coveted "Bank of the Year" award of Money Magazine.
• 2006: NAB posts an industry record $4.3 billion profit.

[edit] Sponsorship

The National Australia Bank is a prominent supporter of Australian rules football, both at grassroots and elite level. It sponsors Auskick, an initiative to improve young footballers, as well as the NAB Cup (an Australian Football League pre-season competition), the NAB AFL Rising Star award; and the AFL National Draft. Other significant sporting sponsorships include the Socceroos, and the 2006 Commonwealth Games.

[edit] Leadership in CRM (Customer Relationship Management)

The NAB is widely recognized as an early adopter and leader in CRM (Customer Relationship Management) technology. It is a large user of the Siebel CRM software and has developed and implemented its "National Leads" analytical CRM system to support its sales force in identifying relevant customer sales & service opportunities. ^{[1] [2] [3] [4] [5] [6]}

Recently, NAB has revamped its CRM system under new leadership. ^{[7] [8] [9] [10] [11] [12] [13] [14] [15]}

The NAB has also deployed the National Leads system to the two other regions outside of Australia: New Zealand and the UK. ^[16]

In 2006, NAB was named the winner of the IFS/Cap Gemini Financial Innovation awards for its National Leads system. ^[17]

[edit] Recent business issues

[edit] Foreign exchange staff fraud

In 2004 NAB reported losses of A$360 million resulting from unauthorised foreign currency trades undertaken by 4 option traders. The losses were a result of a failed speculative position where the traders falsified profits to trigger bonuses over a number of years. In order to actually generate the reported profits, the traders speculated on the US dollar, betting that it would rise against the Aussie dollar and other currencies. The USD depreciated, and the huge losses incurred. The losses triggered a major clean out of senior management including the Chief Executive at NAB. The traders were fired and ultimately jailed.

[edit] Tax evasion and customer overcharging in Ireland

The Irish subsidiary of the bank, National Irish Bank was the subject of a six-year Inquiry carried out by Inspectors appointed by the Irish High Court. They established that National Irish Bank had engaged in overcharging its own customers and tax evasion schemes prior to 1998^[18]. Mr Justice Peter Kelly, an Irish High Court judge commented following publication of the Report "The edifice of banking is built on a foundation of trust. On the Inspectors findings there was a breach of trust. The operation was carried out over a period of years in a deliberate fashion"^[19]. The Director of Corporate Enforcement subsequently applied to the High Court to have 9 senior managers, barred from being an officer of any company^[20].

[edit] References

1. ^ http://www.national.com.au/About_Us/0,,39413,00.html
2. ^ http://www.nabgroup.com/0,,32934,00.html
3. ^ http://www.smh.com.au/articles/2005/02/21/1108834695957.html
4. ^ http://www.teradatalibrary.com/pdf/2003_Q1_webonly_secrets.pdf
5. ^ http://www.siebel.com/downloads/case_studies/nationalaustraliabank.pdf
6. ^ http://www.teradatalibrary.com/pdf/towergroup_020701b.pdf
7. ^ http://australianit.news.com.au/articles/0,7204,20435270%5E15306%5E%5Enbv%5E,00.html?from=rss
8. ^ http://www.computerworld.com.au/index.php/id;981862231
9. ^ http://www.teradatauniverse.com.au/GerdSchenkel.asp
10. ^ http://www.zdnet.com.au/news/software/soa/IT_can_t_replace_face_to_face_banking_NAB/0,130061733,139246406,00.htm
11. ^ http://www.itwire.com.au/content/view/3520/53/
12. ^ http://www.teradata.com/t/page/147950/index.html
13. ^ http://www.ncr.com/en/media_information/2006/mar/pr030906b.htm
14. ^ http://teradatauniverse.blogspot.com/2006/03/on-first-morning-of-teradata-universe.html
15. ^ http://dssresources.com/news/1292.php
16. ^ http://www.cbonline.co.uk/0,,77333,00.html
17. ^ http://www.ifslearning.com/events/financial_innovation_awards/fia_winners_2006.cfm
18. ^ Summary of Report of the Investigation into the affairs of National Irish Bank Ltd and National Irish Financial Services Limited. The High Court (2004-07-30).
19. ^ "Ex-NIB executive barred for 10 years by court", Eircom.net, 2005-10-27.
20. ^ Director of Corporate Enforcement (2005-08-28). ODCE seeks nine disqualifications arising from National Irish Bank / National Irish Bank Financial Services Report. Press release.

[edit] External links

• National Australia Bank - Official Site

[1] - Fortune Global 500