National Bank of Canada will cut as many as 400 jobs, or 2.3 percent of its workforce, as it seeks to reduce costs amid changes in technology and customer preferences, a person familiar with the plan said.
The reductions will mostly be in the Montreal-based lender’s personal and commercial banking unit and corporate operations, and will be spread across the country, said the person, who asked not to be identified because details haven’t been disclosed. The firm has a similar number of open positions and is seeking employees with technology and digital skills, the person said.
Chief Executive Officer Louis Vachon said Thursday in a statement that “a few hundred employees” will be affected as part of a restructuring that will result in National Bank taking a C$64 million ($48 million) charge in the fourth quarter.
“Given the IT transformation and to what extent and how rapidly consumer preferences are changing, you cannot substitute or retrain people,” Vachon said Thursday in a call with analysts. “We are being forced to let some people go and, at the same time, hiring other people with the expertise that we’re looking at.”
Claude Breton, a bank spokesman, declined to comment on the number of job cuts.
National Bank also sold 7.16 million shares at C$41.90 apiece to raise C$300 million. Canada’s sixth-largest lender wants a buffer of 20 to 25 basis points above its required Tier 1 capital ratio of 9.5 percent, said Vachon, who anticipates the lender’s ratio will be 9.8 percent after the share sale and restructuring costs.
National Bank fell 5.4 percent to C$40.84 at 12:24 p.m., the worst performance in the Standard & Poor’s/TSX Commercial Banks Index. The shares have dropped 17 percent this year, compared with the 10 percent decline of the eight-company index.
“The banks are trying to firm up their costs and get capital ratios higher so they can better withstand whatever impact they will see as we go through October,” said Andrew Pyle, fund manager at ScotiaMcLeod Inc. in Peterborough, Ontario. “National Bank is not the first out of the gate. It’s not the first and probably won’t be the last.”
The last time National Bank had significant job cuts was in 2012, when the firm announced plans to cut about 300 positions, or almost 2 percent of its workforce at the time.