National Australia Bank is to slash jobs in its UK businesses by almost a fifth over the next 18 months to cut costs by A$285m (€169.8m) a year.
NAB, which owns the Clydesdale Bank in Scotland and Yorkshire Bank in England, said on Wednesday that it is to axe 1,700 of its 10,300 UK staff.
NAB said it was five months into its UK restructuring and has already informed 400 of those to go.
A spokesman for NAB said 20% of the job cuts would come from staff who deal directly with retail customers. "The move is really designed to remove duplication an inefficiency from the back office," he said.
Lynne Peacock, chief executive of NAB’s UK operations, said: "We must change the way we do business".
Last August, NAB appointed Lazard to consider strategic options for its UK and Irish operations. Four months later, NAB sold its two Irish banks National Irish Bank and Northern Bank to Danish-based Danske Bank for 967m. Later that month NAB closed its National Custodian Services subsidiary in the UK and transferred the clients to the Bank of New York.
The bank is now considering outsourcing parts of its technology infrastructure in Australia to India. The spokesman said a decision had not yet been made.
Last year, John Stewart, chief executive of NAB, ordered a 40% cut in the bank’s group-wide A$1bn technology spending in 2005 in a bid to boost efficiency.
The Australian Prudential Regulatory Authority had also demanded an overhaul of the bank’s IT systems after they failed to prevent the bank’s A$360m currency trading scandal 14 months ago.