Australian major banks hit record headcount as strong performance fuels future investment

Thursday, 13 November 2025

Australian major banks hit record headcount as strong performance fuel future investment

Australia's major banks have reached their highest-ever headcount levels, topping 171,000 employees, as solid financial performance enables significant investment in technology and capability building for the future, according to new analysis by PwC Australia.

The Banking Matters full-year analysis reveals a period of strategic repositioning underpinned by financial stability. With three of four major banks appointing new CEOs in the past 18 months, the sector is converging around common strategic priorities: proprietary home lending channels, deposit growth, and business banking expansion – all underpinned by a renewed focus on customer experience.

This strategic shift is driving unprecedented investment, with technology spending surging 11.2 per cent to $8.8 billion and total investment spending rising by $750 million to $7.7 billion. The sector added 3.4 per cent more staff this year, with personnel expenses rising 7.66 per cent to reach a record $27 billion, as banks accelerate transformation initiatives.

"Our analysis shows a year of strategic repositioning underpinned by stability," said Noel Williams, PwC Australia's Banking and Capital Markets Leader.

"With refreshed leadership at three of the major banks, we're seeing convergence around common strategic priorities – proprietary home lending, deposit growth, and business banking expansion – all with a renewed focus on the customer. The strong fundamentals are enabling substantial investment in future capabilities, with investment spending up $750 million as banks execute on these priorities."

Strategic repositioning drives transformation spending

The analysis reveals the sector is undertaking significant transformation in a challenging operating environment marked by global economic and geopolitical uncertainty.

While headline cash earnings fell 4.5 per cent to $29.4 billion due to substantial one-off charges and restructuring costs, underlying performance remained stable with cash earnings relatively flat (up 1 per cent) when adjusted for acquisitions and one-off payments. Net interest income rose 4 per cent to $77.1 billion, and net interest margin improved modestly by 2 basis points to 1.8 per cent.

Operating expenses reached an all-time high of $46.7 billion excluding notables as banks reconfigure their workforce to focus on strategic initiatives, including hiring more bankers for proprietary lending and in-sourcing technology expertise to build engineering capability. The expense-to-income ratio has pushed 50 per cent, reflecting the cost of strategic repositioning.

"The headline numbers don't tell the full story," Williams said. "When you adjust for one-off charges, you see underlying stability combined with strategic repositioning. Banks are investing heavily in transformation, and this is expensive work, but the numbers show disciplined execution on clear strategic priorities."

Solid foundations support investment surge

Despite elevated investment spending, the sector's foundations remain solid. Credit quality is stable, with impairment expense and provisions flat year-on-year. Capital ratios stand at 12.1 per cent, well above regulatory minimums, providing substantial capacity to support continued lending and investment.

Deposits surpassed $3 trillion for the first time, providing a stable funding base, while gross loans and advances grew 5.5 per cent – the strongest growth in recent years. While home loans remained the largest component, business and institutional lending's share of growth has increased, consistent with banks' strategic priorities.

While some reductions in headcount have occurred across certain parts of banking operations, the overall uptick in employment to record levels suggests strong demand for skills in emerging areas such as technology, AI, and specialised banking roles. This reflects a broader workforce transformation as banks shift resources towards strategic growth areas and future-focused capabilities aligned with their refreshed strategies.

Competitive market dynamics

The strategic repositioning is playing out in one of the most competitive lending markets globally, where customers are benefiting from competitive pricing, particularly in deposits where pricing competition has created downward pressure. Despite this, deposit volumes continued to grow strongly, demonstrating customer confidence.

"This is a good story for Australia," Williams said. "Our major banks are maintaining financial stability while undertaking significant transformation, balancing immediate performance pressures with long-term strategic positioning. The renewed focus on customer experience, combined with strategic clarity from refreshed leadership teams, positions them well to support Australian businesses and households through whatever lies ahead."

The challenge ahead

Williams noted that the challenge ahead is sustaining disciplined execution and converting elevated investment spending into operational leverage and competitive advantage while maintaining the sector's characteristic financial stability.

"We're seeing sharper strategic focus combined with steady underlying performance," Williams said. "The environment continues to change at pace and present volatility, but with strong fundamentals in place and clear strategic priorities, the major banks are well-positioned for the period ahead."

The full report can be viewed here: https://www.pwc.com.au/banking-capital-markets/banking-matters.html