Anglo Irish Bank has begun a targeted cost-management exercise that is likely to result in job losses after appointing management consultants to help reduce its cost base to match its shrinking balance sheet. The move comes as rumours circulate among Anglo staff that a redundancy announcement is expected in September.

The bank declined to comment, but market sources said it was "premature" to talk about staff reductions at this stage in the cost-cutting process, although headcount was a key cost item.

Anglo's staff numbers have fallen by about 250 since last year to just under 1,700, mainly due to the sale of its Austrian and Swiss private banking businesses. However, overall staff costs were cut nearly in half in the first half of the year, mainly due to the elimination of bonuses and share-based compensation schemes at the bank.

Despite steady progress on controlling staff costs, Anglo's cost-income ratio – a key measure of efficiency – has deteriorated significantly as income from the bank's severely impaired loan book has slowed to a trickle. Total operating expenses were down 18% at the end of March, the more recent date for which figures are available.

With much of its loan book transferring to Nama within the next year, Anglo is seeking to cut costs even further, as executive chairman Donal O'Connor indicated in the bank's interim results statement in May.

Anglo has not yet appointed a new chief executive or a chief risk officer as planned, but a CRO would be named "relatively soon", according to a spokeswoman.

A well-placed source in the bank told the Sunday Tribune that the first-choice refused for the CRO position declined the offer three weeks ago, but the spokeswoman could not confirm this.

Anglo has been without a chief executive since David Drumm resigned in December following revelations that the bank disguised the extent of large loans to directors.

Analysts say AIB and Bank of Ireland will eventually have to face staff cuts. One senior Bank of Ireland executive told the Sunday Tribune that the bank had reached the limit of redeployments and would have to address headcount in the coming months.

Meanwhile AIB, which reports interim results on Wednesday, is expected to book an underlying loss approaching €1bn due to worsening impairments and narrowing lending margins, according to analysts' estimates.