NAB Lets Go Hundreds Of Staff In Cost Push
News: National Australia Bank (NAB) has let go of hundreds of em ployees as it looks to generate hundreds of millions of dollars in savings, Business Spectator reports. The Melbourne-based lender has shed almost 600 jobs, according to the Financial Sector Union, with 438 roles cut and another 133 positions outsourced to other countries. NAB has also told the union that it may cut an additional 100 roles.
BMI View: While monetary easing has seen funding costs edge lower, there are growing signs of trouble facing debt-reliant businesses and households, with loan losses likely to rise over the coming quarters. Indeed, the central bank has highlighted the vulnerability of companies providing services related to the mining industry, and residential mortgages-back ed securities (RMBS) have seen a persistent rise in arrears of late. We maintain our downbeat profit outlook for the banking sector and highlight the growing risk to the fiscal accounts as authorities provide safety nets rather than implementing reforms to make the financial system more resilient.