Westpac, Australia’s second largest bank, has implemented a hiring freeze across its operations.
A temporary hold on non-critical roles was put in place last week. It covers back-office positions and Business Insider understands it will not cover roles which would cause delays for customers.
A Westpac spokesperson told Business Insider it would run for an initial three-month period and there was a hiring approval process for critical roles.
He said it was something that occasionally happened at the company.
Westpac employs around 34,000 people in Australia.
The hiring freeze comes amid a period of rapid change for Australian banks with companies increasing interest rates on investor loans and re-examining their capital requirements following a period of intense scrutiny from the banking regulator, APRA.
Westpac announced this morning it would be bolstering its capital reserves with a $750 million corporate note issue.
The increase in capital holding requirements – essentially a risk-reduction exercise by the regulator – means banks’ profit margins could be squeezed in the coming months, so banks will be looking for ways to defend their profitability and shareholder returns.
APRA has been known to be concerned about some investor lending in the Australian market, especially to people looking to invest in the searing hot property markets of Sydney and, to a lesser extent, Melbourne.
Many observers have been waiting to see what kinds of results there might be as a result of APRA’s focus on investor lending and, in recent days, there have been some significant initiatives announced by the major banks.
The Commonwealth Bank, ANZ, and NAB have all announced changes to their investor loans. NAB was the latest to move, announcing today that it was increasing the rate on its interest-only loans by 29 basis points.
Business Insider Emails & Alerts
Site highlights each day to your inbox.