Canaccord Financial Inc. (CF) said it will shut 16 branches at its wealth management unit, half the total, as it tries to revive profit at the division.
The outlets account for 16 percent of the C$13.1 billion ($13.4 billion) of assets the division manages for clients, the Toronto-based company said in a statement today. The firm will record a C$11.5 million charge in its fiscal second quarter.
Canaccord said last month it would eliminate a further 60 jobs after posting a larger-than-estimated loss for the first quarter. After the cuts, the wealth management unit will operate on a “near break-even basis,” the company said today.
“This initiative will allow us to make additional investments in markets where we see the most opportunity for future growth,” John Rothwell, president of Canaccord Wealth Management in Canada, said in the statement.
The company today agreed to buy the private wealth management division of Eden Financial Ltd. for 12.8 million pounds ($20.8 million) to expand its business in Britain.
The purchase follows Canaccord’s December acquisition of London-based Collins Stewart Hawkpoint for 253.3 million pounds. Eden manages 835 million pounds of assets for 2,500 clients.
“Our expanded client base will benefit from a wider variety of investment opportunities and the backing of an independent, global financial services company,” Alexis de Rosnay, chief executive officer of Canaccord’s U.K. and European operations, said in the statement.
Canaccord fell 34 cents, or 5.6 percent, to C$5.76 at 4 p.m. trading in Toronto, the biggest one-day decline since Aug. 2, according to Bloomberg data.
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