National Australia Bank axes 6,000 jobs as annual profit jumps

National Australia Bank axes 6,000 jobs as annual profit jumps

SYDNEY: Up to 6,000 jobs will be axed in a major restructure at National Australia Bank, the lender said on Thursday (Nov 2) after posting Aus$5.28 billion (US$4.1 billion) in annual net profits.

The positions will go as it further automates and simplifies its business. Some 2,000 new jobs will be created.

"This will result in a net reduction in staff currently targeted at approximately 4,000 by the end of full year 2020," it said. The bank currently has 33,600 employees.

The overhaul comes with the bank's net profit bouncing back in the year to Sep 30 from only Aus$352 million in the previous corresponding period when it took a hit from writedowns for loss-making assets.

These included spinning off British bank Clydesdale and most of its life insurance business to Japan's Nippon.

Cash profit, the financial industry's preferred measure which strips out volatile items, was up 2.5 per cent at Aus$6.64 billion, in line with expectations.

The bank paid a dividend of 99 cents, matching what shareholders received in the first half of the year.

Bad and doubtful debt charges rose 1.3 per cent to Aus$810 million, while revenue was up 2.7 per cent.

Chief executive Andrew Thorburn said he was "optimistic" about the future after divesting low returning business like Clydsdale and Great Western banks.

"Cash earnings and revenue are up, asset quality is a highlight again, and we have further strengthened our balance sheet," he said.

"We have made strong progress over the past three years and now we announce an acceleration of our strategy."

This includes making another Aus$1.0 billion in savings by 2020, while boosting investment by Aus$1.5 billion over the next three years

"We have a clear plan to deliver for our customers. We move forward with confidence and a purpose to back the bold who move Australia forward," he added.

All of Australia's big banks are battling higher funding costs and lower interest margins, with rules now demanding they hold more reserves as a buffer against mortgages and fears over rising bad loans.

They also face a hefty new government levy to raise Aus$6.2 billion over four years through a 0.06 per cent charge on the borrowings of the big five banks - ANZ, Commonwealth, Macquarie, NAB and Westpac

NAB, along with ANZ and Westpac, has also been embroiled in a rate-rigging scandal.

It settled a case with Australia's corporate regulator last week over possible fixing of the country's benchmark interest rate. ANZ has also settled although Westpac is yet to do so.

Last week, ANZ posted a 12 per cent jump in annual net profit to Aus$6.41 billion (US$4.93 billion), with Westpac reporting next week.

Commonwealth Bank, Australia's largest, operates on a different reporting schedule.

Source: AFP/de