Bank of Nova Scotia (TSE:BNS, Mkt cap 73.43B, P/E 10.92, Div/yield 0.72/4.59, EPS 5.75, Shares 1.20B) announced that it will incur a $375-million pre-tax restructuring charge in the second quarter as it goes about executing a digital transformation of its organization, the Financial Post reports.
The cost of digitizing processes is one that all banks are having to absorb, with customers seeking out more ways to bank online and through mobile devices.
Scotiabank has decided that it is its turn to restructure its existing business in line with digital trends, the effects of which will be felt in the second quarter’s earnings report.
The charge will amount to 22¢ per share ($275 million after tax) and is mostly likely to be felt in the Canadian banking business, according to analysts.
Scotia would not be drawn on the exact details of the charge, explaining that it will do so when it it releases financial results for the second quarter on May 31.
Canada’s third-largest bank announced a similar pre-tax charge of $148-million in the fourth quarter of fiscal 2014.
The latest charge fits with Scotia’s recent strategy of hiring people with digital expertise. However, in order to keep an even balance, others have seen their position eliminated.
While Scotia would not disclose the number of people to have lost their jobs as part of the reshuffle, the latest round of cuts are understood to have affected as many as 60 brokers in the bank’s wealth management division.
“We are making some changes to better align all of our wealth management services and operate more efficiently in each of our markets,” Scotiabank spokesperson Heather Armstrong said in an email.
The Bank of Nova Scotia, also known as Scotiabank, is a Canadian diversified financial institution, based in Toronto. The Bank offered a range of financial services, including retail, commercial, corporate and investment banking to more than 21 million customers in more than 55 countries around the world. Scotiabank has 4 business segements: Canadian Banking, International Banking, Scotia Capital and Global Wealth Management. The Canadian Banking segment provided a range of banking and investing services to more than 7.7 million customers across Canada, through a network of 1,190 branches, 3,869 automated banking machine (ABMs), as well as telephone, Internet banking and third-party channels. International Banking includes Scotiabank’s retail and commercial banking operations in more than 55 countries outside Canada. Global Wealth Management (GWM) consists of wealth management insurance and Global Transaction Banking businesses. More from Reuters
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