Australia’s Biggest Bank Restructures Institutional Banking Division, Plans Job Cuts
(Bloomberg) -- Commonwealth Bank of Australia said it’s restructuring its institutional banking and markets division as new Chief Executive Officer Matt Comyn continues his reshaping of the lender.
The overhaul will result in unspecified job cuts, according to a person familiar with the matter, who asked not to be identified talking about staffing issues. The division, which includes the bank’s traders, had 1,566 full-time staff as of June 30, up from 1,467 the previous year, CBA said in its latest results.
“In order to be future-fit and to contribute to the group strategy of building a better bank, we recognized a need to simplify and strengthen institutional banking and markets,” the bank said in an emailed statement to Bloomberg News Thursday, which didn’t mention the impact on jobs.
Since taking over in April in the wake of a money laundering scandal, Comyn has moved quickly to reshape the lender and focus on its core retail and banking businesses. He has announced plans to spin off its wealth management and mortgage broking operations, as well as selling stakes in various overseas ventures.
The bank is combining its client relationship management, product origination and structuring into one business unit, the person said. There will also be changes to the global markets business, including combining distribution functions.
Institutional banking businesses at Australian lenders have been under pressure for some time, as low interest rates and a push by foreign institutions into the local market combine to squeeze margins. Typical activities include financing for large companies, cash-management and transaction services.
In the year to June 30, cash profits at Commonwealth Bank’s institutional banking and markets division were essentially flat compared with eight years ago, and the unit’s return on equity has fallen to about 10 percent from 15 percent in 2014, according to Citigroup Inc. estimates. Meanwhile, staff numbers and costs have been rising, despite the subdued financial performance, Citigroup added in a note to clients on Sept. 10.
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