The banking royal commission has heard extraordinary evidence of National Australia Bank staff being involved in an alleged bribery ring covering multiple branches, forged documents, fake payslips and Medicare cards, with bribes being paid in cash to secure loans as staff responded to an incentive program to sign up new customers.

The explosive evidence was heard on the first day of public hearings of the royal commission, where a litany of misconduct by Australia’s financial institutions was laid out for commissioner Kenneth Hayne AC QC.



Anthony Waldron, NAB’s head of broker partnerships, appeared as a witness, and revealed details of an alleged bribery ring involving staff in multiple western Sydney branches, which led to staff being sacked in 2015.

NAB revealed last year that 20 staff had either been fired or resigned over the scandal, but fresh details emerged in the hearing on Tuesday.

Waldron admitted significant problems had emerged with NAB’s “introducer program” between 2013 and 2016, where non-financial experts – including people such as gym instructors – would receive commissions for referring strangers to NAB to ask for home loans.

He agreed that a whistleblower had alerted the bank, in October 2015, to an alleged bribery ring that had been running for years.

Senior counsel assisting Rowena Orr QC said a whistleblower had been recorded as saying that “money exchanges hands in cash in envelopes, white envelopes, usually over the counter. The money is deposited at CBA so NAB can’t detect the deposits. Happening on a daily or weekly basis and has been happening for a number of years.”

Evidence was heard that the number of NAB’s “introducers” peaked at about 8,000 between 2013 and 2016, and they sent more than $24bn worth of home loans to NAB during that period.

In her opening address about the financial industry proper, Orr also listed multiple breaches of responsible lending practices, instances of forged documents to settle loans and the promotion of unreasonable add-on insurance on car loans among the practices that prompted calls for the commission.

The coordinator of the Financial Rights Legal Centre, Karen Cox, gave evidence that broker-initiated loans were a huge problem and instances of “outright falsified loans” appeared to be increasing.

Orr listed some matters that had been settled between financial institutions and the regulator since July 2010 to provide a sense of the scale of misconduct in recent years.

Almost 540,000 consumers have received close to $250m in compensation for home loans that relied on fraudulent documentation, “administration errors” or breaches of responsible lending practices.



The Australian Securities and Investments Commission has banned and suspended from providing credit services, or placed conditions on the licences of, 51 individuals or companies for engaging in home loan application fraud.



Almost 17,000 car finance consumers have received close to $90m in compensation for breaches of responsible lending or reliance on fraudulent documentation. More than $5.7m has been paid in civil penalties.



More than $11m in remediation has been paid to more than 34,000 credit card consumers by financial services entities in response to breaches of responsible lending obligations, with $1.5m paid in civil penalties.



More than $128m has been paid in remediation to consumers by financial services entities as a result of poor conduct related to add-on insurance. About $900,000 of that related to home loan add-on insurance, affecting more than 10,500 consumers.

Orr said since the royal commission held its first hearing in February – which did not hear from witnesses – the number of public submissions had jumped from 400 to 1,894. About 43% of the submissions related to personal financial issues, with the most common complaints relating to home loans, mortgage broking, car loans, credit cards and consumer banking.

Cox said in her experience, when helping people resolve financial problems related to loans, many were “actually very poor at assessing their own expenditure”.