Interpac Business and Migration Solutions Melbourne Australia

(November 17, 2011)

Banking jobs could be on the line if the European sovereign debt crisis bites harder than initially expected, Bank of Queensland boss Stuart Grimshaw says.

Mr Grimshaw it was incumbent on the banks to reduce expenditure in line with revenue to retain profit margins, and wages made up the bulk of banking costs.

He said the European crisis was having a minor impact on the banking sector's bottom line so far, while the slowdown in home loan applications was having a bigger effect.

"It (the mortgage market) is not where it was five years ago," Mr Grimshaw he said.

"The infrastructure of banks is built for a greater growth engine (in mortgages) and it's more how do you balance your infrastructure to what is coming through the door.

"Employment is most of it, but if you can get some slick technology in there you can get rid of defunct processes."

Mr Grimshaw, who addressed the Australian Institute of of Company Directors in Brisbane, said Australia's major banks may soon be able to pick off bargain assets in Asia from European banks hit by the euro zone crisis.

He said European banks will start reducing their liabilities, especially with peripheral assets in Asia.

"The European banks will start shrinking and start selling some of their businesses," he said.

"It will be an opportunity for the majors to buy some bargain based assets."