Daily Management Review

Just Before A Royal Commission Inquiry, Job Cuts Focus Of The Big Banks Of Australia


Just Before A Royal Commission Inquiry, Job Cuts Focus Of The Big Banks Of Australia
The already tarnished image of the big banks of Australia may take another hit just before an inquiry into their businesses because they are set to cut jobs and other costs as they react to a revenue crunch.
Cost curtailment has been go-to method for the so-called Australia’s Big Four banks, Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp, for enhancing their profits ever since there have bee demands made by the country’s regulators that the banks shore up more capital and their scrutiny into internal operations.
However, this strategy will force the banks to incur a cost.
“If you can be the most successful at bringing your staff numbers down the quickest, that’s going to give you the quickest cost advantage,” a senior bank official with knowledge of the cost-cutting strategy reportedly told the media in the country.
But the “society and the community will push back, won’t accept it”, the source reportedly said – referring to a point in time when the job cuts would be large.
Among the cost cutting methods apart from jobs, banks are planning on reduction of the number and size of the branches, use of technology for back office functions.  
Sources have said that there are plans to cut about 40,000 jobs over a period of five years by the Big Four where the main savings would be the reduction in wages of personnel.
This proposed action by the banks for the cost curtailment measures happens at the same time as an inquiry into alleged misconduct in the financial sector by a royal commission.
There are allegations that some of the banks had not given out genuine health insurance payouts while providing ambiguous financial advice, a culture of toxic trading room in some of the financial institutions and rigging of rates of interest which has shaken up the confidence of the public o the banks.
criminal charges and legislative changes could be recommended by the inquiry which would potentially take about a year to get completed. If that is the case profits of the banks would be impacted along with restrictions just like the bank tax that was imposed last year by the government.
However, with net profit margins of 36.4 percent in the June quarter of 2017, the big four banks of Australia re still amongst the most profitable in the world according to the view of the Australian government.
Increasing sales and not limiting operations has been the focus of the banks in light of the continuous economic growth for years and the rise in property prices.  “Top line revenue growth is going to be a struggle, so they need to look closely at their cost lines really seriously,” said Brad Potter, head of Australian equities at Nikko Asset Management, which owns shares in the major banks.
“This is just early stages for banks,” Potter said. “There needs to be a massive reengineering of back-offices to cut costs.”
“Rather than going through this stage with a sledge-hammer to shed tens of thousand of jobs, we think that this is an opportunity for banks to deal with disruption in the right way, re-skilling and re-training their workforce,” said Julia Angrisano, national secretary of the Australian Finance Sector Union.
“It’s likely we will see branch layouts, sizes and experiences evolve, but they continue to play a pivotal role in the experience our customers have,” NAB’s chief operating officer, Antony Cahill, said.

Science & Technology

Israel Completes Mars Habitat Simulation Experiment

Just $24 Earned By Hackers From The Huge Cryptojacking Campaign Conducted Last Week

New Molecule That Quickly Fights Cancer Cells Identified By Swedish Scientists

The U.K.’s Health Sector To Integrate Israeli ‘Digital Health’ Technology

Cryptocurrency Mining Malware Infects Government Websites In Multiple Countries All Across The World

New Research Into Space Settlement And Space Habitation Will Be Supported By Seed Grants Launched By UAE

NASA Confirms Mystery Satellite To Be Its IMAGE Satellite

Facebook To Put A Ban On Cryptocurrencies Ads

Study Show An Early Sign For Alzheimer's Is Sleep Disruption

Malicious ads on YouTube were used to mine cryptocurrency with viewers’ CPU

World Politics

World & Politics

Australia To Welcome Britain On The Latter’s Interest In Joining TPP

South African President Zuma Finally Resigns, New President To Be Elected Soon

13 countries with the best healthcare system

France is coming closer to Iran

India-Russia Develops Supersonic Missile Which Could Raise Concerns In China

Yet another serious political risk for Europe: Italian elections coming soon

Seven Weeks Time Period , Says Theresa May, For Agreement On Brexit Transition Deal

Germany on the brink of political chaos