National Australia Bank has recorded a 7 per cent slide in profits across the third quarter, days after it was leaked that nearly 3,000 staff would be asked to reapply for their jobs under a major restructure.
The major bank recorded unaudited cash earnings of $1.55 billion for the third quarter - a 7 per cent dip compared to this time last year - with chief executive Ross McEwan citing Covid-19 “challenges” as the reason.
“The Covid-19 pandemic continues to challenge our customers and our bank, with varied impacts across industries and communities,” McEwan said.
“The outlook remains highly uncertain, but decisive actions in April to strengthen our balance sheet allow us to support customers, while keeping our bank safe.”
While revenue actually rose 10 per cent compared with the first half of the year, lower interest rates were starting to impact the bank’s profit margins.
And while the 30 September expiry date for home loan deferrals was fast approaching, McEwan indicated some extensions are on offer.
“Encouragingly, about 16 per cent of home loan deferral customers contacted via our check-ins have recommenced payments,” he said.
“However, many customers still face an uncertain future. Where it makes sense, we will offer them extra support to help manage through the pandemic, but providing further credit won’t always be the right thing to do.”
Customers seeking a deferral extension or a new deferral beyond 30 September will be assessed on a case-by-case basis.
The bank’s profit slump follows reports that more than 2,600 staff will need to reapply for their roles in three divisions under its restructure plan.
There are likely to be 1,200 fewer roles at the bank as a result of the restructure, but hundreds more created across technology and enterprise operations, risk and finance, the SMH reported.
Of the 2,600, at least 350 will likely be made redundant.
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