New Zealand's largest and most profitable bank is asking many of its contractors and suppliers to cut what they charge, blaming weakening economic conditions.
ANZ has confirmed that it is asking specialist contractors and suppliers - mostly working in IT roles or supplying digital services - to cut what they charge the bank by 20 per cent.
The Australian-owned bank, which made a profit of $789 million in the six months to March 31 - a 15 per cent fall - cited a change in economic conditions for the move.
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It said the change applied to "specialised" roles and contracts which tended to be well paid, with the pressure not being applied to areas such as cleaning or maintenance.
But a supplier which had been asked to reduce its prices said his company's profit margin was below 20 per cent and it would be impossible to make the changes without having an impact on its own employees.
"I can understand the process they're going through and I'm not surprised they're looking for cost savings," said the boss of one IT service company, who asked not to be named because ANZ was a major customer.
"They're asking for the same services, and the same quality [and] quantity, and everything else, at reduced cost."
Other banks were not yet making similar moves he said, and the pressure was at odds with ANZ's public statements that its role was to support customers and protect jobs.
"Our view is that we'll do what we can to help with cost savings but at some point that will impact the people I employ ... If you look at our overall profit margin, it's significantly less than 20 per cent."
Another major IT services provider which counted ANZ as a customer confirmed the request to cut prices by 20 per cent. While the bank was not unique in applying pressure to reduce prices, the others who had moved to quickly ask for price reductions tended to be in sectors where revenue had fallen close to zero as a result of Covid-19 restrictions.
So far ANZ has not announced any Covid-19-related redundancies, but a spokesman blamed the request to contractors and suppliers on the impact of the coronavirus.
"The economic environment has changed, and we are responding by making changes across the business," ANZ said in a statement, adding that this had led to a review of its use of contractors and suppliers.
"We understand these are difficult times for all suppliers, and these decisions haven't been made lightly, but they reflect the reality of our business and the impact of Covid-19."
Some contractors had been offered full-time employment "while for others we are asking they agree to a 20 per cent charge rate reduction until the end of ANZ's financial year" which ends on September 30. For "a small number" contracts would cease.
Contractors tended to be on short-term contracts "and are paid more than comparable full-time employees in head office roles", ANZ added.
The lower rates would be effective from June 3, with the lower rates reviewed before the end of September "in light of economic conditions" ANZ said.
ANZ said that it had introduced a new policy "to help our suppliers" which saw it - along with the entire banking sector - commit to paying suppliers within two weeks, matching the Government's target for the entire public service.