Australia’s biggest banks are set to shed thousands of jobs in a desperate bid to cut costs and maintain their record profitability.
Despite all of the Big Four banks announcing record profits (between $5.36 billion and $7 billion) in the second half of 2011, three of these – Commonwealth Bank, Westpac, and ANZ – have all drafted plans to cut expenditure as banks tighten their lending and funding costs rise.
Analysts have been keen to identify what this could mean for personnel – the details that the banks have kept quiet.
CommBank is said to be embarking on a mandate entitled "Project 35", which is expected to reduce the cost-to-income ratio of the bank’s retail arm down by almost 4% to 35%. Though the bank has said little about job cuts, analysts suggest that the only way this could possible is through the axing of over 600 jobs.
Westpac has been a little more forthright about their plans. Their chief executive, Gail Kelly, has suggested that employee numbers will "trend downwards". While the bank remains cagey about announcing any concrete plans for job cuts, analysts believe 1,600 jobs could be on the line.
Word from ANZ, meanwhile, is that the bank has started on a redundancy schedule which could involve 1,000 jobs. A similar number at the bank lost their jobs under the "One ANZ" restructuring model just four years ago.
Finance Sector Union national secretary Leon Carter reacted by saying that, in light of record profits in 2011, it would be unfathomable for banks to shed workers to reduce costs. He called upon banks to reassure workers at a time when consumer confidence is already fragile.
"Whenever they mention the word costs all they do is focus on staff costs," he said.
"Despite the capacity to do so, none of them have come out and said 'we won't be sacking Australians in 2012'.
"Instead, what they let go is endless speculation that workers are going to lose their jobs."
Such speculation has added to the increasing pressure for the Federal Bank to cut central interest rates further during its first meeting for 2012 early next month.
If interest rates are set to fall further, why not stay one step ahead and secure stronger rates on your savings accounts now? If banks are adamant in protecting profits, you will have to move sharply to gain advantage of the best savings deals as they stand now.
Keith McDonald
Which4U Editor
