Western banks axed 59,000 jobs last year, more cuts to come in Europe

* More than 160,000 jobs lost across 24 banks in two years-data

* U.S. banks axed 7.4 pct of staff, European lenders cut 4.1pct

* Euro zone banks need further cuts to improve returns-analysts

* Move to digital banking could add to pressure on jobs

By Steve Slater

LONDON, March 30 (Reuters) - Top European and U.S. banksaxed 59,000 jobs last year as they restructured and cut costs,with headcount expected to shrink further in Europe as bossesstrive to improve profitability that has been hit hard bytougher regulation.

Lenders have also sold or shut businesses to narrow theirfocus to avoid falling foul of regulators concerned that somehave become too big and complex.

Analysts said that European banks, especially those in theeuro zone, are likely to wield the knife again because theyremain the most unprofitable in the world.

"The screws will stay tight on headcount," said Aymen Saleh,managing director at Boston Consulting Group in London.

"A handful of banks globally have really looked atstructural change and taken a big cut from their cost base. Themajority have done some tactical and convenient belt-tighteningto take out costs, but without really fundamentally changing howthey operate or their business model."

Eighteen of Europe's biggest banks cut a combined 21,500jobs last year, but that was less than half of the 56,100 jobscut by the same banks in 2013, according to data compiled byReuters.

Six of the biggest U.S. banks cut a total of 37,500 jobslast year, having shed 45,700 in 2013.

That means more than 160,000 jobs have been cut across the24 banks in the past two years. The six U.S. banks shed 7.3percent of staff in the period, against 4.1 percent for theEuropeans, the data shows.

Boston Consulting's Saleh said that the majority of banksthat have not restructured much could have to cut more jobs,though those that moved early could be in a position to addstaff in selected areas.

An IMF study last year of 300 large banks showed that onlyabout 30 percent of euro zone lenders had a structure that wasable to make a reasonable rate of return over time, comparedwith 80 percent of U.S. banks.

SECOND WAVE

Tens of thousands of staff were axed during and after the2007/09 financial crisis, but a fresh wave of cuts swept throughthe banking industry in 2013 as trading income slumped andeconomic growth slowed.

"In a world where growth is harder to come by, I'm moreconvinced than ever that costs will remain the strategicbattleground for our sector over the coming years," Barclays Chief Executive Antony Jenkins said last week.

Barclays shed 7,300 jobs last year as part of Jenkins'three-year plan to cut 19,000 staff, or one in seven employees,and save more than 2.4 billion pounds ($3.6 billion) a year.

The biggest cuts last year were made by banks in the UnitedStates, Britain, Italy and Spain. Royal Bank of Scotland shed 10,000 staff and more could follow as it sells overseasbusinesses and shrinks its investment bank further.

Some banks added staff last year after sharp cuts in 2013,including HSBC, Standard Chartered and BNPParibas, the data showed.

U.S. banks with large consumer operations, such as JPMorgan and Bank of America, made substantial job cutsin the past two years as they worked through troubled mortgagesleft by the financial crisis and refinanced many loans at lowerinterest rates. Citigroup also eliminated jobs as itconsolidated back offices and quit some international markets.

Banks are also closing branches and laying off staff as agrowing number of customers shift to mobile and online banking.

The shift to digital banking and more efficient processingis expected to exert renewed pressure on staffing in the comingyears.

Analysts at Citi last month estimated that 54 percent offinancial services jobs were at "high risk" from the impact ofdigitisation.($1 = 0.6709 pounds) (Additional reporting by David Henry in New York and JesusAguado in Madrid; Editing by David Goodman)