UK banks to slash 1,700 jobs in cost cutting cull

The Clydesdale and Yorkshire banks are to slash 1,700 UK jobs as part of a massive restructuring of management teams and technology platforms that will save £117m a year.

The far-reaching cost-cutting plans have been unveiled by the National Australia Bank (NAB) group, which owns the two UK banks.

NAB employs over 10,000 staff in the UK and the majority of the job losses are expected to be back-office and support positions.

NAB's UK CEO Lynne Peacock said further savings will be achieved through a broader cost cutting programme for the consolidation and streamlining of the banks' technology platforms, which will include the renegotiation of "key" supplier contracts.

Peacock cited "upward cost pressures" that are expected to add £80m onto NAB's cost base in 2005, including regulatory work around Sarbanes Oxley and Basel II. The £117m annual savings are expected to be achieved by September 2007.

NAB also plans to increase investment in electronic and direct channels, such as internet and telephone banking, for the Clydesdale and Yorkshire Bank brands.

Staff cuts and redeployment is already underway and Peacock said in a statement: "We have made it clear that we are committed to a strong presence in the UK but to do so we must change the way we do business. All areas of our existing operations have been under review and we are moving quickly to implement the changes necessary to create an efficient, competitive business that delivers leading products, great service and lasting shareholder value."