ANZ job cuts spark fears of more to come

ANZ Banking Group has angered unionists by announcing plans to axe 1,000 jobs just days after lifting interest rates independently of any official increase from the Reserve Bank of Australia.

ANZ said on Monday it would cut 1,000 its 24,000 Australian staff by September this year, with 492 people notified today that their jobs were gone.

ANZ's Australian operations chief executive, Philip Chronican, said the job cuts were about adapting to new global conditions and ensuring "the bank remains strong and can grow and invest for the future.

Finance Sector Union national secretary Leon Carter said that the union would consider strike action in protest.

Mr Carter said 2,000 banking jobs had been cut this year and the FSU estimates 8,000 more may go by the end of 2013.

A UBS report on banking sector costs, released in January, identified staffing as a problem area, accounting for 58 per cent of total costs.

Total industry staff numbers were 141,000 in 2002 and have grown to about 179,000 now.

The UBS analysts wrote that they were "anticipating some solid reductions in headcount over the next two years down to 172,000".

Deloitte banking partner James Hickey said that as growth in mortgage business slowed for banks in the wake of the global financial crisis, they needed to pay attention to costs.

"They are faced with a lower growth environment than they have faced over the past 10 years and they need to adjust their operations to suit that," Mr Hickey said.

ANZ was the first bank to increase mortgage rates independently of the Reserve Bank of Australia this month, lifting its standard variable rate from 7.30 per cent to 7.36 per cent on February 10.

Westpac increased standard variable rates by 0.1 per cent to 7.46 per cent the same day, while the Commonwealth Bank announced on Monday that it will increase rates by 0.1 per cent to 7.41 per cent on February 20.

Bendigo Bank also announced on Monday that its standard variable rate will rise 0.15 per cent to 7.45 per cent on February 21.

The banks have defended their rate rises as necessary as the cost of funding home loans from overseas markets - about 20 per cent of their funding source - increases.

While the majority of bank funds are sourced from local deposits, costs are also increasing domestically, with the Commonwealth increasing the rate paid on six-month term deposits on Monday.

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