Ken Henry says he and outgoing NAB CEO Andrew Thorburn are "deeply sorry", after both men announced their departures from the bank in the wake of criticism from royal commissioner Kenneth Hayne.

Key points: Both men were singled out for criticism by commissioner Kenneth Hayne

Both men were singled out for criticism by commissioner Kenneth Hayne Former ANZ executive Philip Chronican will be acting CEO

Former ANZ executive Philip Chronican will be acting CEO The bank had faced an unprecedented shareholder revolt at the end of last year

Mr Thorburn will leave at the end of the month, while Dr Henry will stay on in his role of chairman until a new, permanent chief executive is appointed.

In the banking royal commission's final report released on Monday, Mr Hayne said he had doubts that NAB had learned from its past mistakes, and criticised Mr Thorburn's characterisation of the fees-for-no-service scandal as "nothing more than carelessness".

"We're deeply sorry. We're saying we are deeply sorry," Dr Henry told ABC TV's 7.30.

"In our departures we are hoping that we will contribute to the development of a better industry that's capable of delivering better outcomes for customers.

"They shouldn't [take their business elsewhere] because NAB is demonstrating it's absolutely committed to building a better bank."

Mr Thorburn said his decision to retire followed a number of conversations with Dr Henry this week.

"I acknowledge that the bank has sustained damage as a result of its past practices and comments in the royal commission's final report about them," he said in a statement.

Shareholder revolt saw boss take a $2m pay cut

Sorry, this video has expired Extended interview with Andrew Thorburn ( Elysse Morgan )

The fallout from the royal commission caused a revolt at NAB's annual general meeting last year, when 88 per cent of shareholders voted down the company's remuneration report — the largest protest vote in Australian corporate history.

Mr Thorburn saw his pay cut by $2.1 million, but still took home $4.3 million for his year's work.

In an interview with ABC TV's The Business on Tuesday, Mr Thorburn had said he could not guarantee he would still be the bank's chief executive by the end of the week.

NAB shares are expected to return to trade on Friday morning, after being halted this afternoon ahead of the announcement.

Former ANZ executive Philip Chronican, currently a board director at NAB, will step in as the bank's acting CEO from March 1.

Henry: We're a long way from doing the right thing

Outgoing NAB chairman Ken Henry said he hopes customers will stay with NAB. ( ABC News: Greg Ryan )

Dr Henry told 7.30 there was a difference between NAB's aspiration to deliver exceptional service and how the royal commission revealed it to be performing.

"There is a big gap. The gap, as I see it, is NAB does aspire to do the right thing by every customer every time and everywhere," he said.

"We're a long way from that. We've got an absolute mountain to climb in NAB in order to achieve our aspiration for the bank. We know we're on the right path."

Dr Henry also admitted his appearance at the royal commission — which saw him criticised for his defensive and off-hand manner — was not good enough.

"I can't tell you how many times I've relived that appearance, I understand the criticism.

"I did not perform well. I really should have performed quite differently. I should have been much more open."

Sorry, this video has expired Ken Henry regrets the way he behaved during his appearance at the royal commission.

Departures 'cast a shadow' on bank's reputation

A career banker, Mr Thorburn was a 14-year veteran at NAB, joining the bank in 2005 as the head of retail banking.

He was elevated to the top job in 2014, after a six-year stint running NAB's New Zealand business, replacing the retiring Cameron Clyne.

His brief had been to simplify and modernise the bank, disposing of its underperforming UK business and updating an ageing IT platform.

Dr Henry became NAB chairman in 2015 after a long career in the public sector, where he rose to be Treasury secretary.

NAB has consistently underperformed the other major banks, having never recaptured its pre-financial-crisis share-price highs.

Credit ratings agency Standard and Poor's said NAB would be unaffected by the departure of Mr Thorburn and Dr Henry.

"Although these departures cast a shadow on the bank's culture and reputation in the short term, we don't expect it to cause any significant or lasting damage to the bank's franchise, expertise, or financial profile," the agency's bank analysts, Nico DeLange and Shared Jain, said.

"In addition, we believe that NAB is strengthening its culture and governance, in line with the broader Australian banking industry."

In the midst of the afternoon's events, NAB published a disappointing first-quarter trading update.

NAB advised the market its cash earnings had slipped 3 per cent to $1.65 billion in the three months to the end of December.

It blamed narrowing margins caused by pressures on home lending, as well as lower markets and treasury earnings.