Australia’s big four banks, facing flat profits from economic headwinds, have shed 4,229 jobs in the last year.
Two of the four have made significant cuts in the last year. Westpac got rid of 1,882 positions, a 5% cut, and the ANZ 2347, a fall of 4.8%, according to half year reports to the ASX.
The Commonwealth at 45,221 employees was up about 2% for the year to the end of December. However, staff numbers dropped to 2% in the six months running up to the end of calendar 2015.
The NAB added 952 jobs, mostly for customer facing roles, in the year to March and now has 35,063 full time staff.
While full time staff numbers have fallen a combined 1.7%, the big four between them still have 163,857 employees.
Bank layoffs by institutions seeking to defend profit margins have been a traditional “canary in the coalmine” for the Australian economy, although this is now arguably less reliable because of the disruption to the service delivery model caused by technology developments, especially mobile banking. Like many industries, banks are reshaping their customer service models and beefing up technology departments to adjust to changes in consumer demand.
That said, the ANZ today put an external hiring freeze in place and announced another 200 jobs would go from its Melbourne office – and blamed the economy.
“The changes are in response to subdued economic conditions, low lending growth and the need to simplify our business and improve productivity,” says the ANZ.
The banks have been reporting worse than expected profit results, with cash earnings coming in at a combined $14.81 billion for the latest half-year, a fall of 2.5%.
The past six months have been characterised by stock market volatility, escalating concerns about the trajectory of global and economic growth, concerns over falling oil prices and indications of slowing growth in China.
“In this environment, the banks’ share prices have continued to fall, in a market now highly sensitive to strategic announcements,” says Tim Dring, the EY banking and capital markets leader.
Ratings agency Moody’s says the banks face multiple headwinds, including potential further stress in resources-related sectors and regions, a worsening outlook for residential property developments and continued stress in the New Zealand dairy sector.
Collectively, the big four banks have an exposure of more than $3 billion from a handful of recent high profile corporate collapses.