‘Absolute priority': Bank's $130m pay bungle

Perth Now

8 hours ago

A big-four bank has revealed it will pay back workers $130m due to a payroll system problem at the same time that it announced an eye-watering profit.
In its latest quarterly results, NAB announced a slight increase in third-quarter profits while pointing to a jump in operating expenses due to back paying workers.
According to the bank, operating expenses were up 4.5 per cent on last year as it dealt with payroll issues estimated to come in at $130m for the 2025 financial year.
The bank did not say how many employees need to be back paid.
'NAB payroll review and remediation is ongoing and total costs remain uncertain,' the bank said. NAB announced it has underpaid staff a further $130m. NewsWire / Nicholas Eagar Credit: NewsWire
The payroll review first began in 2019 and led to costs of more than $250m between 2020 and 2022.
In 2020, NAB said it had underpayments to staff dating back all the way to October 2012.
Moving staff to a new enterprise agreement in 2024 identified further payroll issues.
As a result, NAB has initiated a broader review into payroll-related benefits.
NAB group executive people and culture Sarah White said a dedicated team was continuing to investigate and resolve issues, remediate colleagues and ensure sustained future compliance.
'Paying our colleagues correctly is an absolute priority,' she said.
'We are sorry and apologise to our colleagues that this has happened and have commenced remediating those impacted.'
Meanwhile, NAB reported a slight increase in third-quarter cash earnings on the back of improved margins and growth in both business and home lending. NAB's quarterly profits came in at $1.77bn. NewsWire / Gaye Gerard Credit: News Corp Australia
NAB made $1.77bn for the three months ending June 30, up from $1.75bn this time last year.
NAB said business lending grew 4 per cent and Australian home lending grew 2 per cent during the quarter.
Net interest margins increased 8 basis points.
Expenses were also up 3 per cent on the back of higher staff costs, investment in new technology and remediation costs.
Bank deposits were largely stable over the quarter but are up 6 per cent over the nine months to June 30.
The major lender also booked a credit impairment charge of $254m in the quarter, mainly related to business lending in Australia and New Zealand as well as unsecured Australian retail portfolios.
NAB chief executive Andrew Irvine said focusing on key priorities led to Monday's result.
'We remain optimistic about the outlook and are well placed to manage NAB for the long term and deliver sustainable growth and returns for shareholders,' he said.