National Australia Bank to Slash 1,400 Jobs in Britain
National Australia Bank on Monday said it plans to restructure its struggling British business, slashing more than 1,400 jobs at the loss-making arm by 2015.
The announcement came as Australia’s fourth-biggest bank said its unaudited first-half net profit fell to A$2.05 billion (US$2.14 billion) in the six months to March 31, 15.6 per cent below the previous corresponding period.
The result came after the lender booked writedowns and restructuring charges at its British division worth a combined GBP456 million (US$742 million).
NAB said it had completed a strategic review of its British assets to adapt to weak economic conditions, with the business to be simplified to focus on retail and small business lending in Scotland and northern England.
Chief executive Cameron Clyne said the review was undertaken because recovery in the region was now considered a longer-term prospect.
“In the last half-year, there has been a significant downgrade in the growth prospects of the UK economy, in part reflecting the drag on its recovery from heightened weakness in the eurozone,” he said.
“In addition, the commercial property market, which had previously seen signs of recovery, has recently experienced a ‘double dip’ as the recovery stalls and other banks accelerate the reduction in their commercial real estate exposures.”
“This has contributed to the current downturn in the UK being longer and slower to recover than experienced in the 1930s following the Great Depression, and has led us to take these actions at this time.”
The bank said it would result in at least 1,400 jobs being lost by the end of the 2015 financial year.
“While every effort will be made to support our people, the substantive repositioning of the business will impact roles in the UK,” Clyne said.
The moves are expected to see annual cost savings of about A$116 million by 2015, NAB said.