NAB boss quits in forex scandal

THE forex trading scandal that cost National Australia Bank A$360m (£150m) claimed a second scalp today as chairman Charles Allen resigned.

Chief executive Frank Cicutto fell on his sword over the affair two weeks ago after pressure from investors.

Allen said that he had waited for Scotsman John Stewart, Cicutto's replacement charged with rebuilding the bank's reputation, to settle into his new job before making the announcement.

'I believe that this action is in the best interests of the bank and its shareholders,' Allen said in a statement.

The news of Allen's departure was generally greeted as a positive. 'To the extent there was some uncertainty, this clears that. It's no longer a negative,' one analyst said.

Board member Graham Kraehe, 61, former chief executive of wine giant Southcorp, will take over as chairman of NAB, Australia's largest bank.

But his appointment does not mean an end to the embarrassment the trading scandal has caused. Kraehe says his first task will be to deal with the fallout over the affair, ensuring new checks were introduced to make sure such a scandal did not happen again.

He said his priority was to clean up NAB culture to make it more 'open and transparent'.

There have been no arrests so far in the scandal, but Federal police and two independent watchdogs are investigating the rogue currency trades which the bank has blamed on four dealers, one based in the City. They were suspended last month by the bank.