Mr Stewart, who restored NAB's fortunes after the foreign currency trading scandal, which almost brought the institution to its knees four and a half years ago, will be succeeded by the group's New Zealand divisional banking chief, Cameron Clyne on January 1.

Shares in NAB rose as much as 2pc, or 52 cents, to $25.98, in early trade on the ASX today.

Today's announcement comes little less than a week after the disastrous news that NAB is to write off almost all of its $1.2 billion exposure to mortgage-backed securities which are expected to drop heavily in value due to the US sub prime housing loan crisis.

The unexpected write-offs of $830 million took the total of expected losses to over $1 billion since May this year, and will lop as much as $600 million off the group's 2008 profits.

NAB has been expected to produce a figure of around $4.4 billion to $4.6 billion but analysts now estimate the result could be as low as $3.8 billion.

It will be a disappointing end to Mr Stewart's career at NAB after being parachuted into the chief executive's job in February 2004 from heading up its British subsidiary.

The trading scandal led to a boardroom and managerial clear-out and plunged NAB into a financial and reputational crisis.

Since then, the Scot-born banking boss has completely overhauled its senior executive ranks, restored profit growth and recently challenged Commonwealth Bank for market leadership in the sector.

Michael Chaney, NAB's chairman, this morning told The Age’s BusinessDay that the announcements of last week and that of Mr Stewart's departure were unconnected.

''We had been planning to do this (announce the CEO's retirement) this week as it has been at the conclusion of an 18 month long process,'' said Mr Chaney.

''John's reputation will stand and people who know him will also know that it has nothing to do with these (past) events.''

Mr Chaney said that to have delayed the announcement to the annual results would have required Mr Stewart to stay on for at least another six months and that by disclosing the news now, it would allow a smooth handover to Mr Clyne by January 1.

Nonetheless, the handling of last Friday's news disappointed and angered investors given that it came just two weeks after a brief ASX statement that suggested more provisions might be on their way to cover losses on the collaterised debt obligations (CDOs) in the US.