NAB to cut 6000 jobs as profit rebounds

Javier Howell
November 3, 2017

Releasing its full year results, NAB said a reshaping of its workforce would see the creation of 2000 new jobs to 2020, though overall about 6000 roles will be impacted as the bank accelerates its strategy to grow and maintain productivity.

Treasurer Scott Morrison insists NAB's job loss and profit announcement does not bolster the case for a royal commission into banking.

And as we simplify, we automate processes and things move to digital channels.

The 2.5 percent rise in profit to A$6.64 billion ($5.1 billion) comes amid a broader sector drive to improve margins, cut costs and hoard cash in response to regulator-imposed changes to capital requirements.

Shares of NAB, Australia's largest business lender, ended 2.8 per cent down after the company said it would incur restructuring charges of A$500 million ($385.55 million) to A$800 million in the first half of fiscal 2018, and a spike in expenses of between 5 per cent and 8 per cent over the year.

Thorburn told a results briefing that the bank was operating in a "fast-changing world", with new customer expectations and NAB facing competition not just from other banks and fintechs but "more significantly the potential for global tech giants to materially impact over time our business model and economics".

While NAB's net interest margin, a key gauge of profitability, fell 3 basis points from past year, it was 6 basis points higher in the second half of the 2017 results, as the lender benefited from repricing its mortgage book.

"We have a clear plan to deliver for our customers".

NAB's positive outlook contrasts with that of rival Australia and New Zealand Banking Group Ltd, which has said finding revenue growth was getting harder. It settled a case with Australia's corporate regulator last week over possible fixing of the country's benchmark interest rate.

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

The bank said it would again pay a half-year dividend of A$0.99 a share, for an unchanged full-year payout of A$1.98.

Other reports by Insurance News

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