Fri, Nov 03, 2017 - Page 10 News List

National Australia Bank announces restructuring

AFP, SYDNEY

Up to 6,000 jobs are to be axed in a major restructuring at National Australia Bank, the lender said yesterday, after posting A$5.28 billion (US$4.07 billion) in annual net profits.

The positions are to go as the bank further automates and simplifies its business to reshape for a digital future, while about 2,000 new jobs are to be created, it said.

“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.

Chief executive Andrew Thorburn said the entire banking industry was under pressure to reshape its workforce.

“As transactions move to digital channels — and this is driven by our customers — we will need fewer people,” he said, foreshadowing branch closures.

One-off restructuring costs related to the redundancies of between A$500 million and A$800 million are expected to appear in the bank’s first-half results next year.

The overhaul comes with the bank’s net profit bouncing back in the year to Sept. 30 from only A$352 million in the same period last year, when it took a hit from writedowns for loss-making assets.

These included spinning off British subsidiary Clydesdale Bank PLC and most of its life insurance business to Japan’s Nippon Life Insurance Co.

Cash profit, the financial industry’s preferred measure, which strips out volatile items, was up 2.5 percent at A$6.64 billion, in line with expectations. The bank paid a dividend of A$0.99, matching what shareholders received in the first half of the year.

Bad and doubtful debt charges rose 1.3 percent to A$810 million, while revenue was up 2.7 percent.

Thorburn said he was “optimistic” about the future after divesting low-returning business like Clydesdale and US subsidiary Great Western Bancorp.

“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 achieving another A$1 billion in savings by 2020, while boosting investment by A$1.5 billion over the next three years.

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