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ISCOVER
Staff reporter
The lowest growth in credit in decades is likely to force Australia’s big banks to scrap up to 7000 jobs over the next two years.
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A new report by UBS said weak credit growth would force lenders to cut costs.
As per the report, lenders are expected to trim total staff numbers by 3.9 per cent to 172,000 from 179,000.
‘‘We expect the banks to be heavily focused on their cost bases,’’ the UBS analysts said.
‘‘Solid reductions in headcount and discretionary costs are anticipated as banks react to the lower growth environment.’’
According to the UBS report, the outlook for credit growth is not good, with analysts not expecting a “significant pickup in the housing market.”
At present, housing credit growth is expanding at 5.7 per cent – far lower than the traditional 14 per cent.
In fact, the current growth is now the weakest since World War II.
“We anticipate housing credit growth to continue to remain subdued, probably staying in the 4 to 6 per cent range for some time,’’ the report said.
