National Australia Bank breaks profit record, plans headcount drop

NAB announces 6000 jobs to be cut amid $5.3 billion profit

"Cost savings of greater than $1 billion are targeted by the end of FY20 as we further simplify our business", Mr Thorburn said.

The cost-cutting measures were budgeted to save the bank of $1bn by 2020.

National Australia Bank is to shed 6000 jobs and retire up to 20% of its existing IT applications and 50% of its product line under a three-year programme created to simplify the bank and reshape the workforce for the digital age.

The bank says the changes "will result in a net reduction in staff now targeted at approximately 4,000 by the end of FY20, which 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 bank said.

Andrew Thorburn, NAB's CEO, says: "I think all big businesses - particularly incumbent businesses - the reshaping of the workforce is going to be significant".

In doing so, Thorburn announced a NAB initiative called "The Bridge" to assist those made redundant in finding future employment.




"Detail is light on how the bank has determined that 6,000 jobs are to be cut, and where and when", Angrisano said in a statement.

The overhaul comes with the bank's net profit bouncing back in the year to September 30 from only A$352 million in the same period last year, when it took a hit from writedowns for loss-making assets.

The 2016 profit of $352 million profit was primarily the result of the NAB's sales, at a loss, of its United Kingdom and life insurance businesses.

While new bank branches will open up in growing areas like western Melbourne and Sydney, some will be forced to close.

Changes to NAB's executive lineup were also announced, with current managing director and chief executive of Bank of New Zealand Anthony Healy appointed to chief customer officer - business and private banking.

CLSA banking analyst Brian Johnson said it was not clear whether the bank could deliver on its restructuring objective "towards" having a cost-to-income ratio of 35 percent and the best returns of the country's major banks.

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