BOQ'S $15M REVIEW LIKELY TO COST JOBS
9 February 2016,
BANK of Queensland (ASX:BOQ) is undertaking a $15 million review of its organisational structure, as the business moves to automate some of its manual processes in a move that is likely to cost jobs.
The Brisbane-based financial institution continues to digitise its lending system and restructure IT operations.
While BOQ has skirted around the issue of potential job losses, the move is widely expected to result in cuts to the group's existing workforce of 2200 staff.
BOQ managing director and CEO Jon Sutton (pictured) says the new measures are in response to the evolving business model over the last three years, following organic growth and a number of acquisitions.
"We have redefined our strategy over the last 12 months and need to ensure our organisational structure continues to support this strategy," Sutton says.
"We are building a more flexible and efficient operating model, which is increasingly important given the accelerated pace of change in financial services.
"This will also improve the way we work by reducing duplication and manual processes and will assist us in finding better ways to share capabilities across the group."
BOQ acquired Investec Bank in Australia in 2014 for $440 million, including $230 million to capitalise the business. The professional finance arm was rebranded as BOQ Specialist.
The organisational restructure is expected to cost $15 million over the course of FY16, and will be included in cash earnings this financial year.
Sutton says BOQ will deliver a full return on the investment through cost savings within 12 months.
"We expect this investment in fine-tuning our operating model will help accelerate our path towards a cost-to-income ratio in the low 40 per cent range in the years ahead," he says.
"The uncertainty in the global economic outlook over recent months has resulted in a significant increase in volatility in funding markets. While strong competition for new business remains, this creates headwinds for our margin outlook.
"The challenges of this market reinforce the need for us to be more nimble and efficient to ensure we can take advantage of opportunities as they arise."
BOQ posted a record profit of $318 million in FY15, up 22 per cent compared to the previous year.
The group will report its half-year results ending February 29 on April 7.