National Australia Bank Ltd. (NAB) said it will take a one-off charge of A$130 million ($85 million) and launch a comprehensive review of its payroll systems after discovering that a range of staff benefits had not been properly recognized, according to a report from Bloomberg.
“Paying our colleagues correctly is an absolute priority,” Sarah White, NAB’s executive for people and culture, said in a statement on Monday. “We are sorry and apologise to our colleagues that this has happened and have commenced remediating those impacted.”
The Melbourne-based lender — Australia’s third-largest by market capitalization — confirmed that the payroll review and remediation process remains ongoing and that the total financial impact is still uncertain. The announcement follows an earlier payroll issue dating back to 2019, which cost the bank A$250 million between fiscal years 2020 and 2022 after underpayment errors were identified.
The latest charge is expected to push NAB’s operating expenses up by about 4.5%. Unaudited cash earnings for the three months to June 30 were flat at A$1.8 billion. Shares rose as much as 2.7% following the update before paring some gains.
NAB’s troubles add to a series of compliance and governance missteps across Australia’s financial sector this earnings season. Macquarie Group Ltd. is facing potential penalties that could run into the hundreds of millions of dollars over risk management lapses, while ANZ Group Holdings Ltd. has been hit with punitive capital requirements after regulators flagged misconduct, including trader behavior linked to alcohol and substance abuse. Even the Australian Securities Exchange (ASX Ltd.) is under review for “repeated and serious” governance failures.
NAB Chief Executive Officer Andrew Irvine described the payroll issue as “disappointing and must be fixed,” while the bank confirmed it is directly contacting affected employees and engaging with the finance sector union.
Despite the payroll setback, Australia’s major banks continue to face mixed conditions. Westpac Banking Corp. has shown growth in its loan book, while Commonwealth Bank of Australia is seen by analysts as vulnerable to margin pressures and rising credit costs as the economy slows. The broader economic backdrop is clouded by expectations of further cuts to benchmark lending rates, even as households remain under strain from higher energy bills and cost-of-living pressures.
