Why the NAB share price fell sharply on Monday

‘NAB takes its financial crime obligations seriously. We are very aware that we need to further improve our performance in relation to these matters.’

Issues emerge

The National Australia Bank (ticker: NAB) saw its share price fall sharply after it was revealed that AUSTRAC had raised a number of concerns with the bank’s anti-money laundering (AML) and Counter-Terrorism Financing (AML/ CTF) program.

This issue raised by the regulator focuses on the bank’s customer identification procedures, customer due diligence practices, and some other issues. These issues were described as both potentially serious and noted as being ongoing.

Despite the understandably negative reaction from the market, AUSTRAC made the clear point that it was currently 'not considering civil penalty proceedings to address’ the concerns raised. This line was highlighted in bold.

Such a decision, NAB stressed and AUSTRAC elaborated, is ‘reflective of the work undertaken by the NAB DBG to date.'

This position, the regulator did point out, may change.

While potentially damaging for the bank, NAB has flagged these issues in the past, disclosing them as early as 2017 as well as during the most recent interim results.

Beyond merely identifying these issues, NAB looks to be taking proactive steps to correct them, flagging that it had thus far invested approximately $800 million to improve its financial crime and fraud controls.

The bank has also regularly engaged with AUSTRAC over these matter, stressing that its focus is on addressing and improving its AML/ CTF Program.

Commenting on the situation, NAB Chief Executive, Ross McEwan noted that the bank is focused on cooperating with the regulator, while adding:

'NAB takes its financial crime obligations seriously. We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do.'

'NAB has an important role in monitoring and reporting suspicious activity and keeping Australia's financial system, our bank and our customers safe.'

The NAB share price finished out the session down 3.16% or 87 cents, at $26.64 per share off the back of this news.

Despite that pronounced reaction, NAB has been in a clear uptrend over the last 6-months, rising 14% in that period.

Besides NAB – CBA, ANZ and WBC all drifted lower on Monday, as investors cool on the sector.

Want access to a best in class trading platform – that’s competitive on both costs and doesn’t sacrifice on features? IG Australia was recently awarded three 5-star ratings from Canstar, across the Active Investor, Casual Investor and Trader categories.

Find out what sets us apart from the rest here.

A regulator on the offensive

AUSTRAC on Monday also announced it was investigating Crown and SkyCity, marking a busy day for the regulator.

The Crown share price (ticker: CWN) fell sharply during the session, finishing Monday down 1.50% to $12.50 per share.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.