Mumbai: banks in Australia could cut as many as 10,000 jobs or 8 per cent of the big five's workforce over the next 12 months as banks cut costs and spruce up their balance sheets, global consulting firm KPMG said in a report.

Andrew Dickinson, head of KPMG's banking division said he expected the five banks to cut around 2,000 jobs each over the coming year.

The KPMG report follows major restructuring programmes announced by ANZ, Westpac and Commonwealth recently. The banks are expected to spend $1 billion in 2008 on restructuring programmes, KPMG financial services partner Michelle Hinchliffe said.

The big five banks, Commonwealth Bank, Westpac, ANZ, National Australia Bank, and the St George, employ around 125,000 globally, according to union figures.

Westpac said it would spend $226 million on restructuring its business model and changing banking and IT systems, while CBA said it would spend $377 million on restructuring.

Over the past two weeks, all banks said they would focus on lowering their cost to income ratios during their fiscal 2009, Hinchliffe said, adding, the average cost to income ratio across the big banks currently stood at 45.4 per cent, down 0.9 per cent on the previous year.

Dickinson said he expected Westpac to gain between 20 and 30 per cent in revenue in fiscal 2009 after a merger with St George Bank.

ANZ, whose costs jumped 10 per cent in fiscal 2008, is expected to spend $100 million on job cuts and a corporate restructuring that would result in annual costs savings of up to $200 million from 2010.

KPMG said Australian banks were generally in good shape with no systemic credit problems in the sector. However, further consolidation was on the horizon with a two-tier banking system expected to emerge.

The big four banks would dominate while the mid-tier players would fall by the wayside, he said.