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EYE-BALL Guru on – The ANZ axes 1000 jobs – Bank jobs being tossed overboard…

February 15, 2012
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Title:
The ANZ axes 1000 jobs –
Bank jobs being tossed overboard…
The ANZ announcement to cut 1000 jobs will save it $40 million – yet the Bank’s CEO earns in excess of $10 million – that equates to the cost of 250 staff who are about to lose their jobs.This issue of Bank profitability – and Bank Executive remuneration is at the front of why the GFC has taken the World to the brink.   Bank executives hold up – ‘shareholder returns’ and – ‘return on capital’ – or ‘funding margins’ – and ‘margin on assets’ – all mis-direction and targeted at complexity and confusion to distract media hounds on the prowl for a good story.

This is not rocket science – comparing Bank returns internationally and in past decades requires some time consuming investigative background work – something modern day journalists are reluctant to do.

It’s a simplistic calculation – 20 years ago this Nation faced interest rates of 17-20% for housing loans – and the Banks were making 1% margins – in a present interest rate environment of 5-10% Banks are still earning 1% margins.

Comparing like with like – their margins should have reduced to .5% levels but to the dismay – nobody understands the cost of goods argument when applied to Banks and their base cost of funds.

For Banks to still make their 1% margins – the Banks have increased ‘fees’ and ‘non funding’ loan costs to boost their profitability.  The ANZ is currently facing a ‘class-action’ over its high fee structures relative to the cost to provide their fee structure services.   Where have the ACCC and ASIC been on the collusive nature of Bank announcements about interest rate rises and falls?

The unspoken debate in Bank profitability is how Executive remunerations are connected to the Banks performance – when ANZ cuts 1000 jobs and saves $40 million – how much of that goes to the Executive Branch’s end of year bonus payments?

In a stagnant credit market – soon to be delivered massive write downs on non performing debt – the Banks only way of maintaining the gravy ride for those conditioned to receiving $millions in remunerations and bonus’ – is to reduce costs – and that means job losses and a reduction in customer service … and we all know how those bank queues during lunch breaks have you spending your time waiting for your Bank to provide you with a simple bank transaction …

Jobs lost announcements in the Banks this year alone number in the thousands – yet Bank profitability has returned to pre 2008 levels.  The CBA announced a half-year profit today of $3.62 billion – yet they are also cutting jobs.   There is no forgiveness or compassion in business today – every minute and personal time has to be accounted for – the stress levels in the workforce over job security are rising again – and productivity will suffer.

Why would the ANZ Bank CEO think his $10+ million pay packet is deserved when it comes with the loss of 250 jobs at the low rung of the pay scale?

Gillard and Swan’s responses to the Banks actions is not that of a Government who boasts – ‘Jobs, Jobs, Jobs’ as its call to arms.

They pay lip service to the Bank’s decisions on retrenchments knowing that they need the Banks more than they need this Government.  Yet – in 2008-11 – the Banks were the beneficiaries of Federal Government guarantees to allay the public panic that was gripping the world when the GFC hit hard …

Bank’s are a hated species – they control our lives beyond reason – they entrap youth into credit card debts they carry for decades trying to get themselves out of – they enticed you into fully funded home loans leading up to the GFC – and because you lost you job or the property value fell – they now have complete control over all your life as you try to sell your home or have your interest cost added to principle to swallow up everything – they have no moral objection in using your cash flow to offset a dead asset – they own it and having you bust your ass trying to keep your home is a better outcome than them foreclosing and having to take a hit as a bad-debt and capital write-off.

Banker’s are worse than Real Estate salesman, even Lawyers rank above them as enticed friends …

What can anyone do with $10 million in a year – how many boats, cars, houses, holidays, and the like can a person do in a year?

The taxman loves them and that is a reason why they escape any real scrutiny – but the packaging of their pay often renders their tax rates at lower than the clerks who are being retrenched … it’s time to crunch a few Bank executives and put the Banks back in their place.

Bank profitability has to be made accountable and in line with economic hardship and good times.  Just as this Government seeks to tax the resources sector $40 billion –  at a time when the A$ value has reduced their revenues by 30-40% – it’s a yardstick set to crush the resource industry.

Banks divorcing themselves from RBA interest rate moves was a marriage they walked themselves into because it allowed them to target profitability and connect it with the Government’s economic policies and the RBA’s decisions on interest rates.

Now that it does not suit them – Bank’s want the divorce without paying a cent in settlement having benefited from the relationship to the tune of $billions …

Since the CBA was uncoupled as a Government owned asset – the Banking sector has run riot – it’s time to adjust the regulatory controls and rein in the Banks and once again make them responsible to their customers ahead of their bonus linked shareholder returns.

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To have your say where it counts:  – contact your Local Federal Representative and have your say  on this matter – please use the links below to find your Local Member and let them know how you feel about this – of you can just post a comment below and let off some steam.

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The EYE-BALL Guru …

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