Scotiabank to take C$451 mln charge on job cuts, loan-loss provision

Tue Nov 4, 2014 6:03am EST
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Nov 4 (Reuters) - Bank of Nova Scotia , Canada's No. 3 lender, said on Tuesday it was cutting about 1,500 jobs and would take a pre-tax charge of C$451 million ($396 million) in the quarter ended Oct. 31.

Scotiabank said the charge, most of which is related to the job cuts and additional loan-loss provisions, is expected to hurt its earnings by about 28 Canadian cents per share in the fourth quarter.

Analysts on average were expecting adjusted earnings of C$1.40 per share in the quarter, according to Thomson Reuters I/B/E/S.

Two-thirds of the jobs cuts, mainly due to branch closures and changes in its leadership structure, would be in Canada and the rest in international locations, Scotiabank said.

Of the total charge, about C$148 million is related to the job cuts, mostly as employee severance costs. About C$109 million is for loan-loss provisions, related primarily to three existing net impaired loans within its hospitality portfolio in the Caribbean.

The company will announce its fourth-quarter results on Dec. 5.

Scotiabank expects to save about C$120 million as a result of the restructuring. The savings will be modest in 2015 and are expected to be fully realized in financial year 2016. (1 US dollar = 1.1379 Canadian dollar) (Reporting by Ashutosh Pandey in Bangalore; Editing by Maju Samuel)