Scotiabank To Cut 3% Of Staff Globally

Scotiabank (TSX: BNS) is expecting a rough fourth quarter financially, disclosing this morning that it will be taking several charges as it looks to right size its operation.

First and foremost, the company anticipates a restructuring charge of $247 million to be taken during the quarter on a post-tax basis, which relates to workforce reductions of 3% globally. The reductions, which are not believed to have been previously disclosed, is a result of end-to-end digitization, automation, and a change in day to day banking preferences among consumers.

As of July 31, Scotiabank had 91,013 full time equivalent employees, meaning a 3% reduction would amount to an estimated 2,730 jobs.

At the same time, the company will see post-taxes charges of $63 million related to the consolidation and exit of certain real estate locations and service contracts. Savings from both efforts are expected to be achieved through fiscal 2024.

READ: Scotiabank Falls Short Of Q3 2023 Earnings Estimates

Separately, an impairment charge of $280 million related to an investment in Bank of Xi’an Co Ltd is also expected to be taken during the quarter, as a result of the market value remaining below the carrying value for an extended period of time.

The total impact is said to be $590 million on an after-tax basis, or $0.49 per share.

Further details are slated to be provided at the time of release of the firms fourth quarter results.

Scotiabank last traded at $59.95 on the TSX.

Information for this briefing was found via Cedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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