Union Crticises NAB Plan to Cut Staff in Britain

Unite, the union of finance sector employees in Britain, criticised on Tuesday a plan by the National Australia Bank (NAB) to shed 1,400 jobs in the lender's operations in the United Kingdom.

The reduction of 17 per cent of NAB's manpower in Britain and close branches is part of the bank's strategy to lower risks and save costs on the underperforming Clydesdale Bank.

Unite National Officer David Fleming described the job cuts, announced Monday morning in Australia, as "nothing short of brutal for the UK workforce."

"Unite finds it disgusting that the company decided to release a statement from Australia in the middle of the night so UK staff across Yorkshire and Clydesdale banks would wake up to hear that their jobs are being cut through the morning news reports," The Sydney Morning Herald quoted Mr Fleming.

"This is not the behavior of a responsible or credible organization," Mr Fleming pointed out.

It is not only in Australia but also in Britain that jobs in the finance sector are at stake. UBS Bank said about 7,000 banking jobs are expected to be axed in Australia in the next 24 months while HSBC disclosed plans to cut 3,000 jobs and RBS and Lloyds also disclosed plans to axe jobs by the thousands.

NAB Chief Executive Cameron Clyne defended the timing of the bank's announcement as unavoidable because the Australian Stock Exchange requires immediate disclosure of financially sensitive information.

He said over the next year, Clydesdale Bank will pull out of commercial property and lending to big business and would rather concentrate on markets in Scotland and northern England. However, the move would cost NAB$710 million in restructuring charges and provision in 2013 as NAB overhauls its underperforming business.

Nomura analyst Victor German said the Clydesdale's business is not sustainable and the bank should rather focus on mortgages and smaller business banking in markets where it is strong.

The bank's investors are in favour for NAB to sell the Clydesdale and Yorkshire banks because of the two lenders' consisting dragging the group's earnings. But NAB rejected a fire sale of the banks due to the depressed valuations in the British banking market.

UBS analyst Jonathan Mott said that NAB's review of operations were not unexpected but were still disappointing. Mr Mott said the shedding of jobs is a logical step but not a silver bullet solution.