Proactive Investors - Scotiabank (TSX:TSX:BNS) said it is slashing 3% of its global workforce as the result of its digitization efforts, changes in customers’ day-to-day banking preferences, and as part of its ongoing efforts to streamline its operations, the bank said on Wednesday.
Other Canadian banks have also reduced their headcounts this year, including the Royal Bank of Canada (TSX:TSX:RY) (RBC) and the Canadian Imperial Bank of Commerce ( CIBC (TSX:CM)) amid higher interest rates and inflationary pressures.
Scotiabank (TSX:BNS) said it is also reducing its real estate and contract costs by exiting certain real estate premises and service contracts.
Combined, the changes are expected to have a $590 million after-tax ($784 million pre-tax) or $0.49 per share impact on its upcoming fourth quarter results.
This includes a restructuring charge and severance provisions of $247 million ($341 million pre-tax) and consolidation of real estate and contract costs of $63 million ($87 million pre-tax).
“We expect the savings on the above items to be achieved throughout fiscal 2024 and anticipate full run-rate benefits in fiscal 2025,” the bank said in a statement.
Scotiabank also expects to incur an impairment charge of $280 million ($355 million pre-tax) related to its investment in Bank of Xi'an, the market value of which it noted has remained below the bank’s carrying value for a prolonged period.
It said additional details would be provided with the release of its 4Q earnings on November 28.