The two most senior figures at National Australia Bank are leaving after the lender was sharply criticised by a government-appointed body probing widespread failings in the country’s financial system.

The chairman and chief executive of National Australia Bank, which was singled out for criticism by a Royal Commission probing widespread failings in the country’s financial services sector, have resigned.

NAB’s chief executive, Andrew Thorburn, and chairman, Dr Ken Henry, have advised that they are leaving the bank, it said today in a statement. The bank will start a “global search process” to replace Thorburn, who leaves on 28 February; Dr Henry has indicated that he will retire once a new CEO is in place.

Following the issue of a report written by Kenneth Hayne, commissioner, the men had locked horns over findings in the the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The commissioner said that NAB may not have learned lessons from the scandals. The public inquiry has heard that NAB's wealth management arm had charged hundreds of thousands of retirees for financial advice they never received. Around 300 NAB staff have been fired or have left the company as a result of internal investigations into wrongdoing.

The country’s major banks (NAB, Westpac, Australia & New Zealand Banking Group and Commonwealth Bank of Australia), have all been put under the spotlight.

NAB today said that it has asked Philip Chronican, a NAB director, to serve as acting CEO, taking effect on 1 March (subject to relevant regulatory approvals) until a permanent appointment is made.

“I have had a number of conversations with the chairman this week. I acknowledge that the bank has sustained damage as a result of its past practices and comments in the Royal Commission’s final report about them. As CEO, I understand accountability. 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. However, I recognise there is a desire for change. As a result, I spoke with the board and offered to step down as CEO, and they have accepted my offer,” Thorburn said.

Dr Henry said he and the board had recognised that change was necessary. “The timing of my departure will minimise disruption for customers, employees and shareholders,” he said.

"I am enormously proud of what the bank has achieved and equally disappointed about what the Royal Commission has brought to light in areas where we have not met customer expectations. Andrew and I are deeply sorry for this. My decision is not made in reaction to any specific event, but more broadly looking at the bank's needs in coming months and years,” Dr Henry said.

Dr Henry and Thorburn are not the only people to have moved from their roles amidst a raft of scandals and problems in Australia’s financial sector. At Commonwealth Bank of Australia, senior executives left the bank, including its chief executive, Ian Narev, who brought forward his retirement, and was replaced by Matt Comyn.