Business and Capital Market Analysis !!!

ANZ admitted to the job cuts on Friday after it poured cold water on a newspaper report that said it planned to cut 10 per cent or 3,500 workers.

Australia’s financial services industry is in the midst of a cost-cutting drive in response to weaker domestic and international growth and the global credit crisis. Local and international banks operating in Australia are also braced for a rise in bad debt charges as a rising number of indebted businesses fail.

Macquarie Group, the Australian investment bank which reports results on Tuesday, has also been the subject of unsubstantiated rumours it may cuts thousands of jobs among its 13,000 employees. Nicholas Moore, chief executive, is expected to be quizzed on the group’s costs base and potential job losses next week.

Westpac, which has bought fifth-ranked St George for A$17bn, has not commented on the level of job cuts resulting from the merger. However, the Finance Sector Union, which represents 50,000 workers, believes it could result in 5,000 fewer jobs at the enlarged entity.

The FSU estimates that 1,500 have already been lost from Australia’s financial services industry this year.

KPMG, the professional services firm, said it was cautious about the outlook for Australia’s banking sector in 2009, and estimated that perhaps two thousand jobs would be lost at each of Australia’s five largest banks.

KPMG noted there had been weakness in the banks’ cost to income rations. With falling revenues, the banks need to cut costs, including jobs, to maintain their cost to income rations, KPMG added.

ANZ said on Friday that it had already announced a “new structure with fewer middle management roles”.

“What we are undertaking is a significant belt tightening exercise over the coming weeks and months – the focus is on middle management roles - but at this stage its not possible to be more definitive on numbers,” it said