ASB freezes pay for 75 per cent of workers

ASB Bank is freezing pay for 3500 of its staff earning more than $50,000 a year, as part of a push to protect jobs.

All those earning under $50,000 would get rises of between 2 and 3 per cent, the bank announced yesterday.

Chief executive Charles Pink and the 11-strong "executive leadership team" are making "voluntary salary reductions" but the bank, owned by the Commonwealth Bank of Australia, will not say by how much.

The bank has about 4700 full-time staff, with 3500 earning more than $50,000 a year.

ASB staff are also being given the option to reduce their hours, either by whole days or hours. A bonus pool due to be paid out in August has been "significantly" reduced.

The moves were intended "to responsibly address the effects on its business of the global economic recession and protect jobs", said Mr Pink.

"Our challenge in these difficult times is to take responsible actions to maintain ASB's strong, sound financial position, for the benefit of our customers, colleagues and the communities in which we operate. These cost reductions are aimed at protecting jobs at ASB in the face of pressures on revenue driven by the global recession."

"We recognise that a pay freeze for staff earning over $50,000 is a significant step and, in that spirit, I and my executive team volunteered to lead by example and take a reduction in our own salaries. This reduction will take effect on 1 July."

ASB said last week it would not be moving any of its New Zealand banking operations or roles overseas.

"This affirmation has been viewed extremely positively by our people, especially those working in call centres and information technology areas where other banks are outsourcing jobs.

"Redundancies have always been the absolute last resort at ASB and we are determined to do whatever we can to ensure that this remains the case in our business in the future. This can best be achieved by taking action to save costs responsibly now."

The bank workers' union Finsec said wage freezes for middle income earners did not have be part of the package given bank profits.

Finsec campaigns director Andrew Campbell said ASB announced an after-tax profit of $238 million for the first six months of its financial year.

The financial crisis should not be used as justification to cut or freeze pay when banks continued to make large profits. But he said ASB's goal to keep staff in work was positive.