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TORONTO (Reuters) - Canadian wealth management firm Canaccord Financial Inc CF.TO said on Monday it will close 16 underperfoming branches and cut 35 advisory teams in an attempt to reduce costs so that it can break even on an operating basis.
The closing of the branches leaves the securities dealer, one of the few independent firms left in Canada's competitive wealth management space, with another 16 branches that will remain open. It said it will retain about 180 advisory teams.
"This initiative will allow us to make additional investments in markets where we see the most opportunity for future growth," John Rothwell, president of Canaccord Wealth Management's Canadian unit, said in a statement.砀
Canaccord said the 16 branches it chose to close accounted for just 16 percent of the firm's C$13.1 billion ($13.4 billion) in client assets in the Canadian wealth management division, while the 16 branches to remain open accounted for the rest.
"After these branch reductions, it is expected Canaccord Wealth Management will operate on a near break-even basis in current market conditions. All branches remaining open have the capabilities to be consistently profitable and Canaccord is committed to their continued success and growth," the company said in a statement.
It also announced on Monday it would add to its British wealth management platform with the purchase of the wealth management business of Eden Financial Ltd, a boutique private client investment management business, for C$20.3 million in cash. The purchase will result in a C$5.2 million in restructuring charges in the third quarter.
With global financial market turmoil hurting business, Canaccord said in August it had a first quarter net loss of C$20.6 million, or 24 Canadian cents a share. That compared with a profit of C$13.2 million, or 16 Canadian cents a share, a year earlier. Excluding one-time amortization costs and other items, the company reported a loss of C$16.3 million, or 20 Canadian cents a share.
The Toronto-based financial services firm also halved its quarterly dividend payout in August.
Reporting By Andrea Hopkins; Editing by Peter Galloway