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Aggressive cost-cutting a necessary evil for ANZ expansion

Aggressive cost-cutting a necessary evil for ANZ expansion

(11 June 2013 – Australia) ANZ Bank’s aggressive stance on costs has left some people scratching their heads, especially after posting an 11 percent jump in cash profit to A$1.4 billion in the latest half.

The head of the banks Australian operations, Phil Chronican, conceded some may struggle to understand why the cost-cutting drive has led to job cuts, with further reductions likely.

''I acknowledge that it's hard for some people to understand how in the one breath you can announce a A$6 billion profit and then in another one say that you're fine-tuning your operation and 50 jobs are going here or 70 are going to New Zealand,'' he said.

But an organisation the size of ANZ has an array of expenses, he said, so there is a constant need to be vigilant on costs.

''It might look from the outside like everything would be fine if we just left it alone. The reality is that most of our costs go up every year.''

He is equally direct when asked if this means the bank may need to lose more of its 47,000-strong workforce.

''Do I think we can be even more efficient than we are today? Yes. We still have a lot of our processes that are very manually-intensive and I would like us to have more automation. So by definition that means we would have fewer jobs in back-office areas.''

ANZ's cost-cutting has been controversial, with the Financial Services Union accusing the bank of treating its staff as an ''expendable commodity'' after it said last month it would replace 70 call-centre jobs with positions in New Zealand.

Chronican believes the hard stance, paired with the bank’s decision to move its rate decisions "out-of-cycle" with the Reserve Bank of Australia (RBA) are tactics that have helped the bank expand into Asia.

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