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Bank of Queensland boss Stuart Grimshaw reckons more job cuts are likely. Picture: The Courier-Mail Source: The Courier-Mail

AUSTRALIA'S big four banks may look to shed more jobs to counter losses in revenue, Bank of Queensland chief executive Stuart Grimshaw says.

On Thursday, Westpac briefed workers about 410 job cuts and positions it will relocate to India as part of a group-wide restructure.

Earlier last week Suncorp Group said it would shift 77 jobs offshore to Bangalore, while ANZ Banking Group in January announced 131 employees in Victoria would lose their jobs.

Bank of Queensland CEO Stuart Grimshaw said the major banks may consider cutting costs further if their revenue lines slowed.

"I think we're seeing as regular headlines now ... across the whole economy, head-counts reducing," Mr Grimshaw told the ABC's Inside Business program today.

"I think if you look back over the last 12 months, there's been a lot of reduction in head-count that's gone quietly through without being reported in the press."

He said there were better ways of lifting earnings than shedding jobs.

"I don't think cutting costs is quite the answer.

"Cutting costs is actually a brutal way of putting more work on fewer people and that doesn't work for anyone - in fact, that's actually worse for an organisation.

"We don't believe taking a blunt axe to heads is the right way about it."

Finance Sector Union figures released in January showed National Australia Bank, ANZ Banking Group, Westpac and Commonwealth Bank collectively made 3,309 roles redundant in 2011.

The union said it expected the trend to continue in 2012.

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Big four banks 'may cut more jobs'

STAMFORD: The United States indicted Wegelin, the oldest Swiss private bank, on charges that it enabled wealthy Americans to evade taxes on at least US$1.2bil hidden in offshore bank accounts, according to the US Justice Department.

The announcement, by federal prosecutors in Manhattan, represents the first time an overseas bank has been indicted by the United States for enabling tax fraud by US taxpayers.

The indictment said the US government had seized more than US$16mil from Wegelin’s correspondent bank, the Swiss giant UBS AG, in Stamford, Connecticut, via a separate civil forfeiture complaint. Because Wegelin has no branches outside Switzerland, it used correspondent banking services, a standard industry practice, to handle money for US-based clients.

The charges against Wegelin, of fraud and conspiracy, provide a rare glimpse into the world of Swiss private banking in the wake of a crackdown on UBS AG. In 2009, UBS paid US$780mil and entered into a deferred prosecution agreement with the Justice Department over charges it engaged in fraud and conspiracy by enabling scores of Americans to evade taxes through its private bank.

The bank later turned over the names of more than 4,500 clients, a watershed in Swiss bank secrecy, which protects the confidentiality of clients and their data.

The indictment signals a ramping up of pressure on 10 other Swiss banks under investigation by the Justice Department, including Credit Suisse, Julius Baer and Basler Kantonalbank.

A week ago, Wegelin – founded in 1741 – effectively broke itself up by selling the non-US portion of its business.

The indictment represents the latest blow to the tradition of Swiss bank secrecy in a long-running US crackdown on tax dodgers.

Switzerland is seeking a global solution for its entire banking industry, not just the 11 banks under criminal scrutiny.

On Tuesday, the Swiss finance ministry handed US authorities encrypted data on bank employees who served US clients suspected of dodging taxes, and said it would only provide the key to decipher the data once the row was settled.

The US Justice Department said Wegelin “affirmatively decided to capture for Wegelin the illegal US cross-border banking business lost by UBS and deliberately set out to open new undeclared accounts for US taxpayer-clients leaving UBS,” the indictment said. – Reuters

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Wegelin charged with helping to evade taxes

By Lynnley Browning

(Reuters) - The United States indicted Wegelin, the oldest Swiss private bank, on charges that it enabled wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts, the U.S. Justice Department said on Thursday.

The announcement, by federal prosecutors in Manhattan, represents the first time an overseas bank has been indicted by the United States for enabling tax fraud by U.S. taxpayers.

The indictment said the U.S. government had seized more than $16 million from Wegelin's correspondent bank, the Swiss giant UBS AG, in Stamford, Connecticut, via a separate civil forfeiture complaint. Because Wegelin has no branches outside Switzerland, it used correspondent banking services, a standard industry practice, to handle money for U.S.-based clients.

UBS could not be reached for immediate comment.

The charges against Wegelin, of fraud and conspiracy, provide a rare glimpse into the world of Swiss private banking in the wake of a crackdown on UBS AG. In 2009, UBS paid $780 million and entered into a deferred prosecution agreement with the Justice Department over charges it engaged in fraud and conspiracy by enabling scores of Americans to evade taxes through its private bank. The bank later turned over the names of more than 4,500 clients, a watershed in Swiss bank secrecy, which protects the confidentiality of clients and their data.

The indictment signals a ramping up of pressure on 10 other Swiss banks under investigation by the Justice Department, including Credit Suisse, Julius Baer and Basler Kantonalbank.

Six days ago, Wegelin -- founded in 1741 -- effectively broke itself up by selling the non-U.S. portion of its business. The indictment represents the latest blow to the tradition of Swiss bank secrecy in a long-running U.S. crackdown on tax dodgers.

Switzerland is seeking a global solution for its entire banking industry, not just the 11 banks under criminal scrutiny.

On Tuesday, the Swiss finance ministry handed U.S. authorities encrypted data on bank employees who served U.S. clients suspected of dodging taxes, and said it would only provide the key to decipher the data once the row was settled.

ACCOUNTS FOR FORMER UBS CLIENTS?

The U.S. Justice Department said Wegelin "affirmatively decided to capture for Wegelin the illegal U.S. cross-border banking business lost by UBS and deliberately set out to open new undeclared accounts for US taxpayer-clients leaving UBS," the indictment said. U.S. clients were told that Wegelin presented less risk amid the crackdown because it had no branches outside Switzerland and "had a long tradition of bank secrecy."

The indictment also accused Wegelin of helping two unnamed Swiss banks "repatriate undeclared funds to their own U.S. taxpayer-clients by issuing checks drawn on Wegelin's Stamford correspondent account." The transfers were separated into chunks below the $10,000 threshold at which such transfers are reported to the IRS. Wegelin, the indictment said, "co-mingled" the repatriated funds with other, unrelated funds, to better conceal their origin and nature.

The charges against Wegelin were filed as a superseding indictment of three previously charged Wegelin bankers: Michael Berlinka, Urs Frei and Roger Keller. The three men were charged on January 4 with fraud and conspiracy. The superseding indictment named several unindicted co-conspirators, including one who served as a team leader for the three men at the Zurich branch.

The charges provided new details on how the bank worked to solicit new U.S. clients fleeing UBS. According to the indictment:

* Wegelin, one of the last "pure" private banks, is principally owned by eight managing partners and run by an executive committee that included partners. One unindicted co-conspirator, named as Executive A at the bank, was a member of Wegelin's executive committee and worked in Zurich.

* Wegelin used a special code, "BNQ," on around 70 new U.S. undeclared accounts that were opened over 2008 and 2009. It also sometimes opened accounts for U.S. citizens who held passports from other countries, and opened the accounts through the non-U.S. passports.

* Wegelin recruited U.S. clients through a website, http://www.SwissPrivateBank.com, that was run by an unidentified third party. The website boasted there that "Swiss bank secrecy is not lifted for tax evasion ... Neither the Swiss government nor any other government can obtain information about your bank account." Unlike the United States, Switzerland generally does not consider tax evasion to be a crime.

* Wegelin gave accounts special names, including "Elvis" and "Limpopo Foundation." The charges detailed the bank's work for nearly three dozen American clients, known only as clients A through JJ.

* Wegelin encouraged clients not to come forward to the U.S. Internal Revenue Service and disclose their names in exchange for reduced penalties. Clients who did so in recent years helped provide the Justice Department with a roadmap to the inner workings of Wegelin - a map that led to the bank's indictment.

(Reporting By Lynnley Browning in Hamden, Connecticut; Editing by Kevin Drawbaugh, Howard Goller, Phil Berlowitz)

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U.S. Justice Department indicts Swiss bank Wegelin

Westpac Banking Corporation is poised to axe more than 400 jobs and send another 150 offshore in the latest round of job cuts at the big banks.

Australia's second biggest bank on Thursday briefed workers about the 410 job cuts and positions it will relocate to India as part of a group-wide restructure.

"We are commencing consultation with a number of our employees around changes to Westpac," a Westpac spokeswoman said.

The Finance Sector Union (FSU) told AAP 150 positions would be moved to Bangalore, India, and it feared more cuts were on the cards.

The roles affected are mostly back office, non-executive support roles, but there will be a decline in the bank's overall standard of customer service, FSU national secretary Leon Carter said.

"They're saying this will be the most significant announcement they'll make this year but there's no guarantee that it's the last one," Mr Carter said.

"Westpac continues to make a multi billion-dollar profit and has the capacity, and we say the obligation, to invest in and protect Australian jobs not continue to sacrifice them on the alter of profit."

Westpac's acting head of Australian financial services Peter Hanlon told The Australian's website that the cuts were necessary due to the slowdown in business and consumer activity, as well as the lull in housing credit demand.

The bank will shift 150 jobs to its third party provider in Bangalore, along with 28 IT management roles in its wholly owned BT Financial Group and Westpac Institutional Bank.

Workers in India are usually paid between one-third and a half the wage of Australian workers in comparable jobs.

Westpac also is reviewing all business units excluding its New Zealand operations.

Prime Minister Julia Gillard said that despite the job cuts at Westpac, Australia's financial services sector had a bright future.

Ms Gillard said the growing middle class in China, India and other regional countries would ensure a strong future for financial services.

"That burgeoning new middle class will want sophisticated financial services that can be provided by us right here in Australia," she told reporters in Melbourne.

Westpac's job cuts came amid cuts at other banks.

Earlier this week Suncorp Group said it would shift 77 jobs offshore to Bangalore, while ANZ Banking Group in January announced 131 employees in Victoria would lose their jobs.

Several hundred more jobs will be shed from the Melbourne-based lender in the next six months, ANZ's chief of Australian operations Phil Chronican said at the time.

Westpac posted a 10 per cent jump in annual net profit to $6.99 billion in fiscal 2011, with salaries and other staff expenses up three per cent on a year earlier.

It also made 302 roles redundant through 10 restructures in 2011, according to FSU figures.

Westpac's permanent headcount stood at 33,898 at September 30, 2011, down 1,157 from a year earlier.

Another 3,908 temporary workers were employed, along with 94 employees working on the integration of Westpac and St George Bank.

That took the bank's total headcount to 37,712, a drop of 767 on a year earlier.

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Westpac cuts 410 jobs, sends 150 to India

Westpac is the latest bank to trim staff numbers. Photo: Glenn Hunt

Westpac is cutting hundreds of jobs as part of its cost-cutting program, with Sydney facing the brunt of the redundancies.

The Finance Sector Union has confirmed that 560 jobs are set to go at Westpac, in the latest round of job cuts to hit the financial services sector this year.

BusinessDay understands the bank will be making an offical announcement this afternoon.

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"We're conducting consultations to a number of our employees around changes to Westpac," a spokeswoman for the bank said.

Westpac began consulting staff about their employment, and the Finance Sector Union said it had been informed of the bank's plans.

Jobs to be offshored

FSU national secretary Leon Carter said that, of the 560 jobs to be cut, about 150 lending operations jobs would be sent offshore.

The remaining 400 jobs were to be chopped from primarily backroom processing and general support roles over the next two to four months.

Mr Carter criticised the decision by the bank and implored the government to step in to support the industry.

"From our point of view, it's completely pathetic that an organisation that continues to make a multibillion-dollar annual profit thinks the only way through difficult times is to sacrifice Australian jobs on the altar of making more money," he said.

Mr Carter said the government should support the local finance industry with as much backing as it gave the manufacturing sector.

Unlike manufacturing, financial firms had the capacity to keep these jobs in the country because the finance sector was continuing to grow, he said.

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Cutting since late 2011

The staff briefings follow Westpac's decision to review 28 IT management roles in its wholly owned BT Financial Group and Westpac Institutional Bank last month as part of a group-wide restructure announced last November.

BusinessDay also understands that Westpac's business equipment finance division is one of the areas affected, with those jobs to be sent offshore.

The bank has been cutting jobs since the end of last year, when it shifted about 200 back-office jobs offshore.

On January 19, a spokeswoman for the bank said the bank planned to cull more positions this year.

"We can expect that staff numbers will decrease as we reduce higher cost contract-based staff and reduce duplication in roles at head offices," she said.

Thousands of jobs to go

Analysts from UBS tip that as many as 7000 banking jobs may be shed in Australia in the next two years, as demand for loans slows and households reduce debt levels.

ANZ Bank is expected to slash as many as 1000 jobs as it struggles with the weaker demand for loans and a slowing growth.

Employment in the banking sector has come under pressure this year, after the housing sector cooled through most of 2011, forcing management to trim costs rather than relying on growing credit for earnings. At the same time, job security is emerging as a political issue for the banks, which received backing from the government when the financial crisis in 2008.

Late last month, the protest group Occupy Sydney staged a demonstration in front of Westpac's office to protest at the bank's offshoring after a year of record profits.

Overseas, the falls in transaction levels as well as regulatory changes in Britain forced the Royal Bank of Scotland to jettison as many as 400 jobs in Australia.

Westpac's full-time equivalent staff levels fell from 35,055 in 2010 to 33,898 last year, according to the bank's annual reports.

The bank's shares were up 6 cents, or 0.3 per cent, at $20.91 in afternoon trade, underperforming both the broader market and the financial sector sub-index.

czappone@fairfax.com.au

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Westpac set to axe hundreds of jobs