Bank of Queensland (BoQ) is set to cut jobs from its workforce of 2,200 staff as part of a program to reshape its organisational structure to better affect the bank's strategy.
The regional lender has said it wants to automate some of its manual systems and reduce duplication of staff responsibilities.
BoQ's CEO Jon Sutton said the bank needed to reduce costs in the face of strong competition and market volatility, telling shareholders on Monday that the size and shape of the bank's business had changed significantly over the last three years as it had grown organically and through acquisition.
"We have redefined our strategy over the last 12 months and need to ensure our organisational structure continues to support this strategy," he said.
"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."
For the financial year ending August 2015, BoQ posted statutory net profit after tax of AU$318 million up 22 percent year-on-year, thanks to a record second half of AU$164 million in statutory profit.
BoQ's IT spend for the financial year was AU$79 million.
It was the bank's fifth successive record half, which Sutton said in October was a significant achievement in an environment of low growth and changing regulations.
He also said that BoQ's FY2016 priority is to "break-in digital", by continuing to digitise its back office, introduce a new IT sourcing model, build new online capabilities, and continue the simplification of its IT.
"A key plank of our strategy is to improve productivity through our retail lending origination system which will start rolling out later this month," Sutton said. "This will improve our time to yes for customers and free up employee time from administrative tasks."
The company also told shareholders it plans to utilise data analytics in the future.
To enable the implementation of these new organisational changes announced on Tuesday, an investment in the order of AU$15 million pre-tax is anticipated to be incurred over the course of FY16. BoQ said that the expense will be present in its FY16 cash earnings.
The bank said that the AU$15 investment should deliver 100 percent payback 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 percent range in the years ahead," Sutton said.
"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."
For the first half of the 2015 financial year, the digitisation and transformation of its back office capabilities helped the bank boost its statutory profit after tax to AU$154 million.