Boss out in Aussie bank scandal

THE FOREX trading scandal that cost Australia's largest bank A$252m (£106m) has claimed the scalp of its chief executive, Frank Cicutto, despite tough talk last week when he said he would ride out the crisis.

Cicutto will be replaced at National Australia Bank by Scotsman John Stewart, formerly of the Woolwich and Barclays Bank, suggesting that Britain could be central to NAB's attempts to claw back its reputation.

But Stewart said an acquisition was not part of the plan. Asked by reporters if the bank needed a big acquisition in Britain, he replied: 'No, I don't.'

Cicutto's departure adds A$3.27m - his golden parachute payment - to the bill for the trading fraud that exposed serious flaws in the bank's supervision systems.

Cicutto said his decision to resign was to limit damage. 'I regret the decision was necessary but I believe it is in the best interests of the bank,' he said. 'I am proud of the contribution I have made to its development as Australia's leading banking and wealth management business.'

Last week, a combative Cicutto said he expected to see out the three-year contract he signed in October.

It is understood NAB is keen to tap Stewart's knowledge of the British market, which provides a quarter of the bank's revenue and profit.

NAB owns Clydesdale, Yorkshire, Northern and National Irish banks. It failed last year in an attempt to woo Abbey. NAB's share price has languished under Cicutto's stewardship, the worst performer of Australia's big four lenders. Today, its shares were up 1.7% at A$31.07.

Diver who enjoys being in charge

STEWART has more than 28 years of banking experience, but has shunned the traditional route to the top.

Born and raised in Edinburgh, Stewart attended Boroughmuir High School and studied chemistry at Heriot-Watt University before dropping out to go scuba diving, still one of his favourite pastimes.

His first job was at Legal & General and in 1977 he moved to the Woolwich. In 1989 he set up Woolwich Independent Financial Advisory Services and went on to become Woolwich chief executive in 1996 before selling the bank to Barclays for £5.3bn in 2000.

The 54-year-old father of two was made second-in-charge at Barclays, but quit last year to head NAB's European operations.

When he left Barclays in March with a £1.7m pay-off, Stewart said: 'I may go and be chief executive somewhere else. I do miss being in the number one slot.''