Fat Prophets > Australasian Equities > National Australia Bank

National Australia Bank


February 8, 2024 FAT-AUS-1027

NAB Snapshot

National Australia Bank
National Australia Bank Limited (NAB) is a financial services company. The Company's segments include the Business and Private Banking, Personal Banking, Corporate and Institutional Banking, New Zealand Banking and Corporate Functions and Other. Business and Private Banking focuses on small and medium customer segments, including specialized Agriculture, Health, Government, Education and Community services. Personal Banking provides customers with products and services provides home loans or manage personal finances through deposit, credit or personal loan facilities. Corporate and Institutional Banking provides a range of products and services including client coverage, corporate finance, markets, asset servicing, transactional banking and enterprise payments. It consists of Partnership Banking, servicing retail, business, and private customers; Corporate and Institutional Banking, servicing corporate and institutional customers, and includes Markets Sales operations in New Zealand.

Passing the Baton

Shares in National Australia Bank (ASX.NAB) inched slightly lower after CEO Ross McEwan announced his retirement with plans to fully step down at the start of April. McEwan was appointed CEO back in 2019 during a difficult time for the bank and has since steered the ship in the right direction with the shares up some 20% during his tenure. McEwan will be replaced by Andrew Irvine, the bank’s group business and private banking lead. Today, we take a look at the update and what this could spell of NAB.

Update – CEO Retires

As noted above, NAB CEO Ross McEwan announced his intention to retire from his role as CEO – expressing his desire to spend more time with family. McEwan was appointed CEO back in July 2019 in a difficult time for the bank which faced years of underperformance not to mention the aftermath of the Hayne Royal Commission that lead to then-chairman Ken Henry and then-CEO Andrew Thorburn.

McEwan eventually stabilised the bank and won over stakeholder support through strategic reforms, organizational realignment. The result was a bank focussed on simplification, customer service, and talent development – and so far has been paying dividends (real and figurative).  McEwan’s retirement marks the end of an era but, we believe, he won’t be gone for good considering that he did express desire to explore Board positions.

That said, Andrew Irvine the Group Executive of Business and Private Banking has now been appointed as the Group CEO. Mr Irvine has an impressive background having a long tenure in the Financial and Management Consulting industries. Before Joining NAB, Irvine was the Head of Canadian Business Banking in the Bank of Montreal – one of Canada’s largest financial institutions – as well as previous experience with McKinsey & Company, Lycos Europe, and Credit Agricole.

Irvine definitely has big shoes to fill and inherits a bank poised for further expansion – at least the foundation laid by McEwan is very strong. Under Irvine, we believe that NAB will continue its transformation and, likely, see continued efforts to strengthen the business banking and may even take top spot from CBA in this category. Irvine will take over the CEO role from McEwan on April 2.

There are also other challenges which include further improving the digital experience – a key area given that product distribution has become more complex for banks in a market that is already intensely competitive.

On the compensation package, we believe that this is a fair mix of fixed ($2.5mn/year) and variable components with the latter linked closely to the bank’s overall performance and long-term success. We reviewed the terms and believe this would align Irvine well with shareholders.

Overall, we’re pleased with this appointment and look forward to how Irvine will shape NAB.


The announced retirement of Ross McEwan marks the end of an era having stabilised the bank as well as placed reforms that form a strong foundation for incoming-CEO Andrew Irvine. Irvine inherits a bank poised for expansion. We believe that Irvine is the right choice, though, considering his customer-centric focus – highly important in the business banking market – not to mention his strong track record in banking and management consulting.

In the meantime, we maintain our HOLD rating on NAB (ASX.NAB). It will remain firmly held in the Fat Prophets portfolio.

Fat Prophets has made every effort to ensure the reliability of the views and recommendations expressed in the reports published on its websites. Fat Prophets research is based upon information known to us or which was obtained from sources which we believed to be reliable and accurate at time of publication. However, like the markets, we are not perfect. This report is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore discuss, with their financial planner or advisor, the merits of each recommendation for their own specific circumstances and realise that not all investments will be appropriate for all subscribers. To the extent permitted by law, Fat Prophets and its employees, agents and authorised representatives exclude all liability for any loss or damage (including indirect, special, or consequential loss or damage) arising from the use of, or reliance on, any information within the report whether or not caused by any negligent act or omission. If the law prohibits the exclusion of such liability, Fat Prophets hereby limits its liability, to the extent permitted by law, to the resupply of the said information or the cost of the said resupply.

Funds Management – In addition to the listed funds FPC, FPP and FATP, Fat Prophets Pty Ltd manages the separately managed accounts, namely Concentrated Australian Shares, Australian Shares Income, Small Midcap, Global Opportunities, Mining & resources, Asian Share, European Share and North American Share. These SMAs are managed under their own mandates by the fund managers, and this is independent to the research reports.

Staff trading – Fat Prophets Pty Ltd, its directors, employees and associates of Fat Prophets may hold interests in many ASX-listed Australian companies which may or may not be mentioned or recommended in the Fat Prophets newsletter. These positions may change at any time, without notice. To manage the conflict between personal dealing and newsletter recommendations the directors, employees, and associates of Fat Prophets Pty Ltd cannot knowingly trade in a stock 48 hours either side of a buy or sell recommendation being made in the Fat Prophets newsletter. Staff trades are pre-approved by an appointed staff trading compliance officer to ensure compliance with the staff trading policy.

For positions that directors and/or associates of the Fat Prophets group of companies currently hold in, please click here.