AMP is taking the axe to its New Zealand and British banking arms and severely curtailing its Australian banking operations as part of an ongoing strategic review.

The moves will cut its banking staff from 600 currently to less than 100 by the end of 2003 and reduce the banking operations’ capital needs by about A$500 million ($NZ568 million) to less than A$100 million.

With other changes planned within the AMP group, the jobs toll will total more than 1,000.

Newly appointed chief executive Andrew Mohl, who took over from Paul Batchelor last month, says he is "tackling sacred cows and embedded behaviours" and the changes just announced are merely the early decisions.

The review was taken because of increasingly difficult and competitive market conditions, Mohl says. "Tough times call for tough measures. The business needs to change to become more efficient, more productive, more competitive and more cost effective," he says.

AMP shares have been savaged this year, falling from as much as $24.10 to as low as $12.50 in September after the company disclosed in the depths of a prospectus that its Pearl life insurance company in Britain had fallen below regulatory solvency levels.

AMP Banking was set up four years ago and has slowly been moving towards making good profits. The decision to quit New Zealand comes a day after St Georges Bank said it was coming into the New Zealand market with a joint venture with Foodstuffs.