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National Australia Bank chairman Ken Henry says he has changed his mind and now believes the banking royal commission was warranted.

Dr Henry told NAB’s annual general meeting in December that the big banks’ conduct had not justified a royal commission, but now admits the inquiry has shed light on misconduct and mistreatment of customers.

Dr Henry on Tuesday said the commission was a ‘necessary and important process’.

‘There was a time that I had a view that it wasn’t warranted but necessary,’ Dr Henry told an Australian Shareholders Association conference in Sydney.

‘I now consider that it is warranted.’

Dr Henry described evidence heard so far as ‘simply unacceptable’.

‘From our own bank we have heard examples of systems and processes having failed us, where individuals have acted dishonestly and there is no excuse for any of this,’ he said.

The former Treasury secretary said customers were clear victims of misconduct, but said shareholders had also suffered.

‘Some have suggested that misconduct is a consequence of our employees being too focused on the shareholder, to the detriment of our customers,’ he said.

‘I don’t think that argument can be sustained: mostly, it has been to the ultimate detriment of the shareholder.’

Shares in NAB are worth about 28 per cent less than they were three years ago, but at about $27 are still up 60 per cent on 2009’s post-GFC low.

The royal commission heard of practices including widespread incorrect document witnessing by NAB financial planners, and Commonwealth Bank financial advisers charging clients fees even after they died.

Revelations that wealth management giant AMP charged clients fees for services they did not receive and then lied to the corporate watchdog about it forced its chief executive and chair to resign, and wiped billions off its market capitalisation.

Dr Henry said he had been following the royal commission closely.

‘We see an opportunity to accelerate improvements and make real change and I am very confident that the proceedings will make us stronger,’ he said.