More worries for financial sector as Clydesdale and Yorkshire Banks to cut 1400 jobs

News about the UK economy sliding into a double dip recession and continuing problems in the euro-zone do not bring much hope for UK businesses and consumers alike.

While UK unemployment rates are not the highest in Europe, constant news about further job cuts are worrying.

Just last week HSBC unveiled plans to restructure its UK business operations: with 3,167 fewer positions by the end of 2013; while 950 staff members may be offered other roles within the company, 2,217 employees will become unemployed.

Following their UK strategic review, NAB (National Australia Bank), owner of Clydesdale and Yorkshire Banks announced plans to cut 1,400 jobs, stating it was "in response to the deterioration in the economic and operating conditions in the region".

The report, published yesterday, sees the need to close 29 Financial Solution Centres  and six back office sites, and the relocation of nine other financial solution centres.

According to the report, their UK operations have made a loss of £25 million in the first half of the financial year of 2012, in comparison to the £77 million profit for the same period last year, blaming " weakness in the property market and the absence of a sustained economic recovery".

Restructuring of the business will not come cheap and will cost NAB £195 million, however it is expected that by 2015 it will bring an annual saving of £74 million.

Commenting on the proposed plans, National Australia Bank Group Chief Executive Officer, Cameron Clyne, said that “the action we are taking is needed to adapt to this current economic environment in the UK, and to reposition the UK Banking business to improve returns for the Group over the medium term."

Despite NAB's decision, the proposed changes are yet to be approved by the Australian Prudential Regulation Authority and the UK Financial Services Authority.