Australia & New Zealand Banking Group said Monday that it would slash 1,000 jobs in 2012 and continue an existing freeze on executive pay, citing a lending slowdown.
Bloomberg reported that ANZ Bank, Australia’s third largest, is not the only Aussie bank to take economic belt-tightening measures for 2012. Westpac Banking Corp. already announced cuts of up to 400 jobs earlier in the month. In addition, on Friday, both raised their standard variable mortgage interest rates, independent of the nation’s central bank, which left rates unchanged. Commonwealth Bank of Australia and National Australia Bank increased their rates on Monday.
Peter Hanlon, Westpac’s acting head of Australian financial services, cited slowdowns in business and consumer activity to an Australian newspaper on Feb. 2. He also called conditions as bad as he has seen in 30 years in the banking field. ANZ Bank has 48,000 employees globally, about 24,000 of them in Australia. The announced job cuts will be domestic and will be made by Sept. 30. They will primarily affect middle management, back office and support staff.
In January UBS had predicted that cuts in the Australian banking sector could run as high as 7,000 jobs over the next two years as banks slash labor costs. According to the Finance Sector Union, which represents some bank workers, cuts announced just since January already total 2,000.
Leon Carter, the union’s national secretary, was quoted saying, “There is no justification for any Australian bank to slash jobs. He added that, considering their combined profits in 2011 amounted to more than A$24 billion ($25.7 billion) last year, “if anyone can afford to invest in Australian finance jobs it is our four big banks.”