St George Bank will pour millions of dollars into software development as part of its cost-cutting makeover and modernisation.
Australia's fifth-largest bank announced plans last week to spend $56 million on a company-wide information technology refurbishment.
"Most of the spend would be dedicated to labour costs associated with designing software for call centres, human resources, intranet and Internet," said CIO John Loebenstein.
He said software development and other infrastructure refurbishment would be carried out both internally and externally and no outsourcing tenders had been announced yet.
UBS Warburg banking analyst James Ellis said the bank would be unlikely to outsource most of the IT restructuring.
"It's understood that St George will be implementing most of the restructuring internally," he said.
A St George spokesperson confirmed its IT systems refurbishment will be accompanied by a spend of $11 million on new configuration of branch networks and other implementation costs of $11 million. Also around 50 St George branches are lined up for conversion into pilot versions of "e-branches".
As a result of the overall facelift, the bank forecasts cost savings of $87 million and revenue increases of $33 million by the end of 2002.
Factored into the forecast cost savings is a staffing cut of 1450 positions. However, a St George spokesperson said only 900 of these were directly related to the company restructuring. Typical staff attrition rates would account for the other 550.
Ellis said it was unlikely the mass redundancy would be directly related to the IT rollout. The IT spend would primarily assist back- and mid-office operations. Not all St George staff likely to be made redundant would be from these parts of the company, he pointed out.
However, some analysts are not sold on St George's plans.
According to a report from finance sector research company Ord Minnett, the bank has only recently started to regain customers since its popularity slid after it merged with Advance Bank in 1996.