Bankwest slashes 400 jobs, auction clearance rates mixed, shares fall: Economy roundup

Commonwealth Bank has announced it will slash 400 jobs at Bankwest, just six months after buying the company.

The cuts, which CBA has blamed on the deteriorating economy, will see 250 jobs lost in Western Australian and another 150 jobs cut in its eastern state operations. Bankwest will have just under 5000 employees following the cuts, with the vast majority of these based in Western Australia.

CBA said no customer-facing roles in branches and customer help centres were involved. Of the lender’s 5100 employees, 3800 are in Western Australia.

CBA bought Bankwest from British bank HBOS for $2.1 billion in October last year.

CBA can expect an angry response from the Financial Services Union. National secretary Leon Carter claims CBA executives had promised that there would be no job cuts as a result of the merger.

“We’ve told the Federal Government that commitments made at the time of mergers are not worth the paper they’re written on. They need to be more secure,” Carter told The Australian.

Shares lose ground

CBA’s shares have lost 1.2% this morning, as weaker sentiment from Wall Street on Friday pushed the wider market lower.

The benchmark ASX/S&P 200 index was down 47.2 points or 1.3% at 12:10 AESDT to 3625.1 points. 

Westpac and National Australian Bank stock also lost more than 1%, while ANZ managed to buck the trend, rising 0.7%. BHP Billiton stock fell more than 2% on news the company is set to pursue acquisitions in the struggling resources sector, while struggling industrial company Alesco rose 22% after announcing it will sell its medical products division.

Auction clearance rates down

Meanwhile in the residential property sector, auction clearance rates continue to show signs of resilience despite the state of the economy.

Melbourne’s clearance rate hit 77%, although just 390 properties were under the hammer compared to 652 last year. Next week will see more than 600 homes up for auction, which should provide a clearer picture of the state of this market.

In Sydney, the clearance rate dropped from 73% last week to just 66%, with total sales of $137.3 million.

The clearance rate in Brisbane improved from 39% to 44% with 12 properties sold, while Adelaide posted a clearance rate of 69%, although only 10 properties went under the hammer.