Westpac (ASX: WBC) has unveiled plans to offshore a further 83 jobs to India as part of its focus on cutting costs, despite expectations that the bank will deliver a record annual profit of $7.1 billion when it reports early next month.
The changes will affect workers in Adelaide, Sydney and Melbourne across the business consumer lending, business consumer services and group finance divisions. A further 65 job cuts from its retail branches were announced just last week, although the group claims to remain “fully committed” to supporting the affected employees with the intention of retraining staff in new roles, according to the company’s spokesperson.
Whilst the bank currently retains the lowest cost-to-income ratio of any of the big four banks, the bank has also recognised slower mortgage credit growth than its rivals, which is largely due to the bank’s higher standard variable rate. Westpac’s weak volume growth and loss of market share will be key focus areas for investors and analysts when its annual results are announced.
However, Westpac isn’t the only bank to have moved jobs offshore in recent times. ANZ (ASX: ANZ) and NAB (ASX: NAB) both sent a number of jobs overseas earlier in the year, and ANZ was also recently forced to scrap plans to offshore 590 jobs to New Zealand and Manila after the proposal was announced by the media. Commonwealth Bank (ASX: CBA) remains the only major bank to keep all of its jobs within Australia.
The Finance Sector Union (FSU) responded to the news by stating, “The practice of offshoring Australian jobs whilst deriving profit from the Australian community is unfair to local communities, staff and customers… Westpac can afford to invest in Australian jobs and skills, and the bank has an obligation to do so.”
Shares in each of the major banks have become overpriced, meaning they are unlikely to deliver market-beating returns in the long-term. This is despite expectations that Westpac, ANZ and NAB will announce record profits, just as Commonwealth Bank did in August.
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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.