NAB reveals 6000 jobs to go as it announces $6.6bn. profit
Clancy Yeates
2 November 2017
National Australia Bank is set to slash 6000 jobs at the bank over the next three years, as part of a plan to overhaul the bank in response to the rise in digital financial services and uncertain economic conditions.
As NAB delivered a 2.5 per cent lift in its profit, to $6.64 billion, chief executive Andrew Thorburn on Thursday announced the job cuts, which are equal to almost a fifth of its current workforce.
Mr Thorburn said the cuts were part of a plan to make $1 billion in savings, by automating processes that were previously performed manually, slashing the number of products it offers, and changing parts of its branch network.
At the same time, the bank will invest an extra $1.5 billion focused on the technology transformation and simplifying internal processes, which would create 2000 new jobs, though with different skill-sets to those being cut.
"The 6000 comes over three years and as we invest these sums of money to simplify the business. It's going to simplify the bank dramatically, and as we do that we are going to need fewer people," Mr Thorburn said at a press conference in Sydney.
The job cuts, and lift in investment, were needed to position the bank over the next three to five years, as traditional banks face the growing competitive threat from financial technology of "fintech" businesses, Mr Thorburn said.
Banks are also dealing with much slower revenue growth because of a slowdown in credit growth, largely due to the housing market.
"When we face into that environment we see the impact of digitisation, fintech players, new global banking players coming into our market, an economy that I think's got a lot of potential but still uncertain, particularly given the global situation," Mr Thorburn said.
"I'd rather face into this environment from a position of strength, and we're in that position today, rather than drift into or someone else force us to do it."
While banks have been shedding thousands of jobs in recent years, and this trend is expected to continue, NAB's move is the most dramatic change to employee numbers publicly announced by a major bank in recent years.
Mr Thorburn said he wanted to be open with staff about the changes facing the industry. It would look to manage the job cuts by moving existing staff into new jobs where possible, and through natural attrition. Mr Thorburn said it had not identified which divisions would be targeted for cost-cutting, but some "traditional" parts of the bank may be affected.
"We're investing here to grow and drive productivity, so it's a very good investment story, it's a long term story. But there's no doubt that our industry is going to have to significantly re-shape our workforce, and that's what we're facing into," he said.
The bank expects to take a restructuring charge of $500 million to $800 million in the first half of 2018. It is establishing a program to help employees into new jobs outside NAB, he said.