National Australia Bank chairman Ken Henry and chief executive Andrew Thorburn will both leave the bank, with board member Phil Chronican to act as CEO.
Dr Henry, a former head of Treasury who had been chairman since 2015, has been under pressure since a brusque performance at the royal commission in which he seemed reluctant to answer some questions.
Thorburn and Henry have been specifically called out for their intransigence in the final report issued by the retired judge who ran the inquiry, Kenneth Hayne.
In the statement, Thorburn said he had had a number of conversations with the chairman this week.
"And I was upset by it". The more I thought about it.
'As CEO, I understand accountability. I really should have performed quite differently. "I should have been much more open". "It just gives NAB an opportunity to reset". "I have always sought to act in the best interests of the bank and customers and I know that I have always acted with integrity", he said in a statement.
National Australia Bank CEO Andrew Thorburn has had a rough week. "However, I recognise there is a desire for change".
Former ANZ executive Philip Chronican, now a board director at NAB, will take on the poisoned chalice of acting CEO from March 1, while an worldwide search for a permanent replacement is conducted.
Thorburn, who joined as NAB's head of retail banking in 2005 and became CEO in August 2014, will leave on February 28. There is also set to be renewal of the bank's board, something that has occurred at other scandal-plagued financial institutions.
Mr Thorburn's future has been subject to speculation since he announced surprise plans to take leave around the release of the Hayne report.
Thorburn, by contrast, received the backing of the Board earlier this week but has been forced to step down as ongoing investigations into large-scale fraud by his former chief of staff portrayed a culture of extravagant and lavish spending in his executive office.
Radio host Alan Jones threw Mike Baird's hat in the ring saying the former premier would be a "very good CEO". A spokesman said this was yet to be finalised.
When Dr Henry was asked if customers should take their business elsewhere, he replied: "Of course they shouldn't".
As ANZ's head of Australia, he guided the local bank through the global financial crisis and moved aggressively into the mortgage market, taking swathes of market share.
"This is naturally a hard decision but I believe the board should have the opportunity to appoint a new chair for the next period as NAB seeks to reset its culture and ensure all decisions are made on behalf of customers", he said.
Henry said he was "enormously proud of what the bank has achieved" but "equally disappointed" by instances in which it had failed customers. "Andrew and I are deeply sorry for this", he said.
"In 2017 he launched a significant transformation of NAB to make the bank simpler, faster and more focussed on customers. And I believe that we have been making better decisions to put you first...but it is clear we need to lift even more to rise and serve you better".
"I'm sad to be leaving NAB in these circumstances but it is absolutely the right thing to do".
It was up 1.3 per cent to 24.93 at the time.
"For Australians sitting at home tonight that have been victims of banking industry misconduct this news will be little comfort", he said.
"Australians have a choice for the upcoming election".