NAB to slash 4,200 jobs
(CNN) -- Australia's largest bank, the National Australia Bank, will cut 4,200 jobs from its global operations over the next two years in an attempt to rein-in costs.
The bank, which has suffered over the recent years due to badly performing overseas investments and an options trading scandal, released the news as it announced a first half net profit of Aust. $2.54 billion ($1.98 billion), boosted by one-off items.
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.
Some of the key changes announced by chief executive John Stewart include closing the banks institutional markets and services offices in Singapore, South Korea and Malaysia, as well as its Tokyo-based securities office.
NAB's first half result was buoyed by a $1.1 billion one-off profit from the sale of its Irish banks last year.
And while the bank's underlying net profit fell 11.1 per cent to $1.87 billion, when compared with the previous corresponding period, the result beat analysts expectations.
Business loans increased by 2.5 per cent to $47.8 billion in the half.
Stewart said earnings had bottomed during the first half and the bank was expecting earnings to grow again in the second half.
"Earnings have bottomed, we're regaining market share, contained the expense growth and pursing with our plans for restructuring and with everything going well, we can maintain our dividend," Stewart said according to a report on Web site news.com.au.
But he warned growth would not be as good as the bank's competitors.
"We expect acceptable earnings growth in the second half of 2005 consistent with where we are in the recovery process," Stewart said.
NAB's first half dividend remained unchanged at 83 cents a share.
