Australia’s Prime Minister Says Banking Sector Strong Despite Planned Layoffs

Australian Prime Minister Julia Gillard said that the country’s four major banks remain strong, despite word from UBS that the sector may need to cut as many as 7,000 jobs over the next two years.

According to UBS AG, lenders at Australia’s banks are expected to reduce total staff numbers by 3.9 percent to offset the weakest credit growth the country has experienced since World World II, Bloomberg News reports.

Sydney-based UBS analysts stated that Europe’s debt crisis is dimming any prospects of global growth.

“We expect the banks to be heavily focused on their cost bases,” the UBS analysts stated in a note to clients. “Solid reductions in headcount and discretionary costs are anticipated as banks react to the lower growth environment.”

Meanwhile, Prime Minister Gillard said while she is concerned about job cuts, the nation’s financial sector remains strong overall.

“We’ve said about Australia’s banks that they are strong, and given the world we live in … and now of course the volatility we are seeing coming out of Europe, we can take comfort in the fact that here in Australia our four major banks are strong,” Gillard told reporters in Melbourne.