National Australia Bank Ltd. : National Australia Bank Plans 730 UK Job Cuts -Union
07/11/2012| 03:14am US/Eastern
--National Australia Bank cuts 730 jobs in U.K.
--Majority of cuts in Midlands, North East and Southern business
--Cuts are first tranche of 1,400 job losses signalled in April
(Adds breakdown of regional cuts in third paragraph.)
By Caroline Henshaw
SYDNEY--National Australia Bank Ltd. (NAB.AU) will slash 730 jobs from its U.K. workforce as it pulls out of commercial real-estate lending and investment in the recession-hit economy, according to the Unite union.
The cuts, equal to around 10% of the Australian bank's U.K. staff, come after NAB announced in April that it would shed 1,400 employees over the next three years as part of a strategic review of its struggling Clydesdale and Yorkshire banks.
The overhaul will see Australia's fourth-largest lender by market value close 29 of its offices across the U.K., with more than half the job losses located in the North East, Midlands and South of the country. In Scotland, home of Clydesdale bank, a total of 145 jobs will be shed, according to Unite.
Analysts predict that the U.K. likely contracted for a third straight quarter in the three months to June, as Europe's debt crisis dragged the economy further into recession.
In April, NAB's Chief Executive Cameron Clyne announced $742.1 million in writedowns in the six months to March 31 linked to a "significant downgrade" to the lender's growth prospects in the U.K. The bank also said at the time that it would pull out of business and private-banking in the country to focus on retail and small-business lending in Scotland and Northern England.
David Flemming, National Officer at the U.K.-based union, labelled the cuts as "devastating" for the workforce.
"Unite has strongly challenged the bank on these job losses," he said. "Serious questions need to be answered by the management as to why the bank expanded in this business area so rapidly, when the model was significantly flawed."
Write to Caroline Henshaw at email@example.com