The National Australia Bank, which is Australia’s largest bank, is cutting 4,200 jobs or 10% of its workforce over the course of the next two years.
The jobs will be cut in Australia, Britain, and Asia as an effort to cut down on costs. Over the last few years, the bank has not been performing too well with overseas investments. The bank did however announce an A$2.54 billion net profit for the first quarter. This was helped by one-off items.
NAB’s net cash operating profit before the extraordinary items fell to A$1.62 billion for the first half to March 31 compared to A$1.85 billion the previous year. CNN explains:
Under the cost cutting program, 2000 jobs will be cut from the banks Australian operations while the remainder, announced in March, will come from its offshore operations.
The bank said it would make a $403 million provision to cover the redundancies in the first half result and a further $400 million in the second half of the year.
CEO John Stewart warned that growth would likely not be as good as the NAB’s competitors. “We expect acceptable earnings growth in the second half of 2005 consistent with where we are in the recovery process,” said Stewart.
Stewart also said that the bank is regaining market share and will be able to maintain its dividend by pursuing its restructuring plans. The bank’s first half dividend stayed at 83 cents a share.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
