It’s time to go, Frank
(3 February 2004 – Australia) After a sustained period of intense criticism following a $360 million pre-tax foreign exchange trading loss, National Australia Bank chief executive Frank Cicutto has finally succumbed to pressure and fallen on his sword.
A NAB statement early Monday confirmed that Cicutto had resigned and had been replaced by John Stewart who has been running the bank’s UK operation.
NAB chairman Charles Allen said Cicutto had made a "very significant contribution to the National over the last 37 years".
Cicutto, for his part, said his decision to resign was in the "best interests of the bank".
"I am proud of the contribution I have made to its development as Australia’s leading banking and wealth management business. I am comfortable in the knowledge that I am handing over a company that is well positioned for future growth," Cicutto said.
He leaves a long career with the bank $3.27 million better off.
Cicutto had been under increasing pressure following the revelation that four foreign currency traders had run up a loss of $360 million – double NAB’s first estimate. This was the latest of a string of mishaps during Cicutto’s tenure, including the HomeSide write-down, a software project blow-out and the failed attempt for a larger stake in AMP, among others.
PricewaterhouseCoopers is currently conducting an investigation into the bank’s internal risk management failures and will present its findings to both NAB and the Australian Prudential Regulation Authority.
But questions also have to asked about the bank’s crisis management strategies following news of the rogue trading deals, and in particular its handling of the media.
Initially the beleaguered former head bunkered down in his Melbourne office, leaving communication matters to Allen and the bank’s head of corporate affairs.
When he did finally emerge it was to field questions from a company called corporatefile that specialises in Q&A sessions for the ASX. In the light of tales of Cicutto’s cricketing past that had emerged over the past fortnight, it was the equivalent of being bowled donkey drops – and insufficient for a voracious media.
Once Cicutto had put the financial media’s nose even further out of joint by cancelling a press conference, preferring instead to give exclusive interviews to The Australian newspaper and Channel 10, an angry media bayed for blood.
As if there wasn’t enough to chew on, NAB’s surprise announcement that it had sold its stake in St George and AMP, while popular with many shareholders, created the impression among analysts and media that the bank was growing increasingly rudderless.
The media finally got its way on Monday, while NAB shares rose 1.8 percent on the news of Cicutto’s resignation.
NAB chairman Charles Allen said Cicutto had made a "very significant contribution to the National over the last 37 years".
Cicutto, for his part, said his decision to resign was in the "best interests of the bank".
"I am proud of the contribution I have made to its development as Australia’s leading banking and wealth management business. I am comfortable in the knowledge that I am handing over a company that is well positioned for future growth," Cicutto said.
He leaves a long career with the bank $3.27 million better off.
Cicutto had been under increasing pressure following the revelation that four foreign currency traders had run up a loss of $360 million – double NAB’s first estimate. This was the latest of a string of mishaps during Cicutto’s tenure, including the HomeSide write-down, a software project blow-out and the failed attempt for a larger stake in AMP, among others.
PricewaterhouseCoopers is currently conducting an investigation into the bank’s internal risk management failures and will present its findings to both NAB and the Australian Prudential Regulation Authority.
But questions also have to asked about the bank’s crisis management strategies following news of the rogue trading deals, and in particular its handling of the media.
Initially the beleaguered former head bunkered down in his Melbourne office, leaving communication matters to Allen and the bank’s head of corporate affairs.
When he did finally emerge it was to field questions from a company called corporatefile that specialises in Q&A sessions for the ASX. In the light of tales of Cicutto’s cricketing past that had emerged over the past fortnight, it was the equivalent of being bowled donkey drops – and insufficient for a voracious media.
Once Cicutto had put the financial media’s nose even further out of joint by cancelling a press conference, preferring instead to give exclusive interviews to The Australian newspaper and Channel 10, an angry media bayed for blood.
As if there wasn’t enough to chew on, NAB’s surprise announcement that it had sold its stake in St George and AMP, while popular with many shareholders, created the impression among analysts and media that the bank was growing increasingly rudderless.
The media finally got its way on Monday, while NAB shares rose 1.8 percent on the news of Cicutto’s resignation.
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