Commonwealth Bank's BankWest to cut 400 jobs in Australia - Update

Australian mortgage services provider Commonwealth Bank of Australia (CBA.AX) late Sunday announced that it would cut 400 jobs at its wholly-owned subsidiary Bank of Western Australia Ltd or Bankwest across Australia. The bank cited the deteriorating national and Western Australian economies as well as a high cost base as the reason for implementing these job cuts.

Commonwealth Bank agreed to acquire Bankwest from its UK parent, HBOS plc (HBOS.L) in October. By buying Bankwest, Commonwealth Bank hoped to get a clear market lead in Bankwest's fast growing home state of Western Australia, and increase its overall share of the Australian market.

The bank noted that out of the 400 jobs, about 250 jobs would be cut on the west coast and 150 on the east coast this year. However, Bankwest has increased its national workforce to 5,100 from 3,340 in the past four years.

The bank added that the job cuts would come in back office roles, and will not affect customer facing retail roles and customer help centers. The bank is also not closing any of its stores.

The bank noted that by lowering costs, it would be able to strengthen its ability to continue delivering competitive home loans, deposit rates, and credit cards in Australia.

In a statement, managing director of Bankwest, Jon Sutton said, "I regret the impact on Bankwest staff but those affected will receive severance payments and outplacement support to assist them to find other employment. Decisions of this sort are never easy and are only taken after full investigations of all options available."

In Monday's regular trading session, CBA.AX is currently trading on the Australian Securities Exchange at A$34.45, down $0.55 or 1.57% on a volume of 1.59 million shares.

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