Unite says announcement by National Australia Bank ‘in middle of night’ meant UK staff ‘woke up to hear their jobs are being cut through morning news reports’
Union officials have reacted furiously to news of 1,400 job cuts at Yorkshire and Clydesdale banks after the Australian owner of the loss-making operations announced a major restructuring.
Cameron Clyne, chief executive of National Australia Bank, blamed the UK economy and losses in commercial property for which the bank took a £150m charge, for the decision to scale back the banks and pull out of commercial property lending.
“This has contributed to the current downturn in the UK being longer and slower to recover than experienced in the 1930s following the Great Depression, and has led us to take these actions at this time,” Clyne said.
Until a year ago, the Melbourne-based bank had been regarded as a potential competitor to the traditional high street banks in the UK and only a year ago was linked to potential expansion. But Clyne ordered a strategic review of the UK business in February, raising fears among the 8,500-strong workforce of Clydesale, bought in 1987, and Yorkshire, bought in 1990.
The announcement of the cuts – which came during Australian working hours, in the early hours of Monday morning UK time – was described as “nothing short of brutal for the UK workforce” by David Fleming, Unite national officer. The cuts follow the loss of more than 3,000 jobs in the UK at HSBC.
“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. This is not the behaviour of a responsible or credible organisation,” said Fleming, adding Unite would be opposing the cuts.
The jobs are to go by 2015, to save £74m, as the bank returns its focus to Scotland and northern England and closes 29 of its “financial solution centres” in southern England, as well as six back-office locations.
The UK arm has been stung by losses through commercial property lending – prices are down 35% from the 2007 peak – and £6.2bn of remaining loans are to be transferred to the parent group and run off to ease any strain on the capital position of the UK arm.
The UK sank to a £25m loss in the first half of the year, compared with a £77m profit a year ago, also taking an extra provision for payment protection insurance misselling.
There has been speculation that NBNK, the bank led by former Northern Rock boss Gary Hoffman, considered a bid – although Clyne said there had not been a formal offer.
“We’ve never rejected a formal offer. So it’s not as though we’ve been walking past deals in the last three-and-a-half years,” Clyne said, as he also ruled out an acquisition in the UK.
“While there’s been much speculation about the prospects for an outright sale of Clydesdale Bank, the reality is that given current pricing of listed UK banks and the difficulty in executing a clean sale it is unlikely to be a realistic option which could provide value for NAB shareholders,” he said.