Bank of Queensland to cut around 400 jobs in restructuring By Reuters

By Sherin Sunny

(Reuters) – Bank of Queensland will cut up to 400 jobs and convert all 114 owner-operated branch networks into its corporate structure by next March as part of a wide-ranging restructuring program, the lender said on Thursday Australian.

The Brisbane-based lender expects to incur charges of $115 million to $125 million ($77.41 million – $84.14 million) to convert branch networks over the next four years.

The company’s shares fell as much as 3.7 percent to $6.19.

The bank estimated a restructuring charge of $25 million to $35 million after tax for the job cuts, which could impact statutory net profit after tax from fiscal 2024. Although the company did not disclose the potential extent of the impact.

The job-cutting initiative will generate annual savings of about $50 million over the next two years, the Bank of Queensland said.

“Despite targeting productivity savings equivalent to ~25% of cost base while shedding 400 of 3,100 FTEs, the path to an 8% ROE looks very difficult and with significant execution risk in the business,” the analysts said from Citi in a note. .

The bank restated its full-year 2026 return on equity (ROE) target to 8% from a previous estimate of 9.25% to include the impact of industry-wide challenges and high cost inflation.

Management said 10 specialist bankers will join in the second half of 2024, targeting opportunities in sectors such as agriculture, healthcare and professional services. This comes as part of the bank’s investment to accelerate the growth of business banking roles.

“Our traditional retail banking operating model, which has served us well in the past, is no longer sustainable in its current state in a low profitability environment,” said Managing Director and CEO Patrick Allaway.

($1 = 1.4857 Australian dollars)