Australia and New Zealand Banking Group will focus on cost controls and trimming the total workforce in Australia over the next few years as core banking growth slows, driving lenders to manage costs, a senior ANZ executive told Reuters.
Phil Chronican, chief executive for Australia at the nation's fourth-largest bank, ruled out the sort of deep job cuts at some Western peers and said ANZ would lean on automation, moving some work offshore and job attrition to lower the workforce.
Mortgage growth, which had slipped at the bank between February and April, had picked up over the last two months, he said, adding he was also more confident in the sector after signs of a rise in arrears had ebbed.
ANZ aims to expand in Asia and wealth management to offset slower growth in Australia as softness in parts of the economy and seven interest rate rises since late 2009 weigh on business lending and with mortgages growth at its weakest since mid 1977. Australia contributed 70 percent of ANZ's profit of A$5.6 billion ($5.8 billion) last year but the bank wants its Asian contribution to profit to double to up to 30 percent by 2017.
"We have to face the reality. Revenue growth is well entrenched in single digits. We have to make sure costs are controlled," said Chronican, who joined ANZ after 27 years at rival Westpac.
He expects loan growth to return to historic levels of over 10 percent only in two to three years. "Our aggregate Australian headcount in three years will be lower than what it is now. Now I can manage growth without having to add headcount," he said, adding the bank saw 15 percent annual attrition.
ANZ employs about 17,500 people at its Australian retail, commercial banking and wealth management units, with another 1,500 in its Asian hubs focussing on the Australian operations.
Chronican said he would aim to have 60 percent of Australian operational roles such as processing, documentation and call centres offshore in three years from 35-40 percent now.
His moves are in line with those of rival Australian banks such as Westpac and National Australia Bank, but far from the deep job cuts by global peers like Bank of America and HSBC. Australian banks, which weathered the global financial crisis better than many global rivals, are coming off two decades of continued growth where they kept adding staff to service rapid growth in loan demand.
The recent slowdown is forcing them to cut costs, running at about 45 percent of total income, to maintain record profits. Chronican said besides costs his attention would be on turning around slipping retail fund flows at its wealth management arm through new product launches such as a simpler pension product early next year.
ANZ bought out partner ING's stake in its wealth management joint venture in 2009 for A$1.9 billion and rebranded it in a bit to boost the business that has struggled to raise fund flows.