National Australia Bank (NAB) expects to cut 6,000 jobs by financial year 2020 as the bank looks to automate the business.
In releasing its 2017 full year results, the bank said around 6,000 roles would be impacted, while it expected a net reduction in staff to around 4,000 by the end of financial year 2020, while it expects to create 2,000 new jobs.
“[This] is expected to give rise to a 1H18 restructuring provision of $0.5-$0.8 billion. Throughout this process we will treat our people with care and respect and equip them for the future,” the results report said.
The bank also expected the 2018 financial year expenses would grow five to eight per cent, with the bank aiming to keep expenses flat over FY 19-20. This would exclude the restructuring provision and large one-off expenses.
“Taking account of the near-term impact of these changes, the Board expects to maintain FY18 dividends at the FY17 level, subject to no material change in the external environment and satisfactory Group financial performance,” the report said.
NAB chief executive, Andrew Thorburn said: “Cost savings of greater than $1 billion are targeted by the end of FY20 as we further simplify our business”.
The bank’s key targets included a $1.5 billion increase in investment programs over three years, around a 15-20 per cent reduction in IT applications, and around 50 per cent fewer products, while 60 per cent were digitally originated.
Underlying profits in consumer banking and wealth rose 2.9 per cent to $2.6 billion, while cash earnings stood at $1.63 billion, a 4.3 per cent increase.
NAB reported a statutory net profit of $5.26 billion for the 2017 financial year, and cash earnings of $6.64 billion, a 2.5 per cent increase.
It declared dividends of $5.3 billion, and returned 79 per cent of cash earnings to over 571,000 shareholders, 95 per cent of whom were Australians.
