ANZ is not alone as Westpac recently announced 400 job cuts, and analysts predict thousands more bank layoffs, some possibly in Asia, as market conditions crimp margins and the Australian lenders seek to rein in costs.

I think it's quite reasonable to think across the industry we'll see seven-to-eight thousand jobs domestically shed, said Brian Johnson CLSA banking analyst.

But before you get too excited about that, some of those jobs will be basically offshored, he added.

Johnson said while ANZ's Asian operations were relatively new, offshore job cuts could not be ruled out.

Australia's top four banks, which also includes National Australia Bank and the Commonwealth Bank of Australia, are among the country's largest employers with close to 40,000 employees each.

While job cuts in the global banking industry are common in turbulent market conditions, Australian banks are coming off more than a decade of almost uninterrupted growth that saw them adding staff, growing assets and boosting profits several-fold.

Last year, Australia's big four banks together made a record $25 billion in profits. But credit growth is at the lowest level since the 1970s, as households increase savings and corporates pay down debt, forcing banks to focus on cost controls.

A different and very difficult environment is now emerging for banks globally, said ANZ CEO, Australia, Philip Chronican.

Just as we are seeing in other parts of the Australian economy, we are also having to adapt our business to the new conditions and become leaner, more agile and more customer-focused so we ensure the bank remains strong and can grow and invest for the future, he added.

JOB CUTS ANGER UNIONS

The ANZ angered its customers and Australian political leaders last week when it decided to raise mortgage rates independently of the central bank, also citing intense pressure on margins due to higher funding costs and slow lending growth.

The ANZ's move to slash jobs came under fire on Monday from the Financial Sector Union, which urged the government to intervene to save jobs.

This is an incredibly profitable, iconic Australian employer that can afford to keep every one of these workers in place and continue to make multi-billion dollar profits, said Financial Sector Union national secretary Leon Carter.

is about greed at the expense of workers, he added.

The job cuts to ANZ's Australian staff will take place during 2012 and will be primarily focused in middle-management, back-office and support functions, with customer-facing employee cuts minimal, ANZ said in a statement.

If you have a look at the Australian banks, these guys rationalised their branch networks in the very early 1990's so when we see them basically looking to respond by cutting costs it comes from stripping out superfluous layers of management and back office processing, said Johnson.

ANZ notified 492 staff on Monday that their roles would be affected, 130 employees were cut earlier this year, with further job losses expected during the year. ANZ has employs approximately 24,000 staff in Australia.