Brokers are already bracing for a surge in the number of mortgage specialists entering the channel, with one big bank’s announcement that it will shed 1,500 positions in a drive to achieve “greater efficiencies” – even at a cost of $148 million.
“Scotiabank today announced that it expects to record certain charges in its fiscal 2014 fourth quarter earnings, aggregating to a total of approximately $451 million pre-tax, or $341 million after tax,” an official release from the bank states. “The Bank has initiated certain restructuring initiatives in order to improve the speed and quality of service it provides its customers, to reduce costs in a sustainable manner, and to achieve greater operational efficiencies.”
Those “efficiencies” will come from across the Canadian operation.
Scotia isn’t yet specifying which divisions will bear the heaviest brunt of the cost-cutting, although it singles out wealth management operational support as one area that will see significant cuts. It is worth noting that two thirds of the reductions will be in Canada.
“The Bank intends to record a restructuring provision of approximately $148 million in the fourth quarter,” the release states, with its fourth quarter results expected to come in the next few weeks. “The majority of the restructuring provision relates to employee severance charges in the bank’s Canadian Banking and International Banking divisions and will affect people at all levels of the organization.”
Broker networks were already reporting an uptick in the number of mortgage specialists migrating to the channel ahead of this latest chop. That flow is expected to increase over the coming months as Scotia players look to soften their landing and their counterparts at other big banks move ahead of any similar cost-cutting at their institutions.