Scotiabank cuts jobs, books charge as some foreign bets sour
By Jeffrey Hodgson and Euan Rocha
TORONTO (Reuters) - Bank of Nova Scotia will cut about 1,500 jobs and book a pretax charge of C$451 million ($396 million), Canada's No. 3 lender said on Tuesday, as it took a hit on soured bets in the Caribbean and Latin America.
Scotiabank said the moves will reduce earnings by about 28 Canadian cents a share in the quarter ended Oct. 31.
The profit warning knocked its stock down 1.9 percent to C$67.48. It also stoked fears about the prospects for other Canadian banks ahead of fourth-quarter results due next month.
Scotiabank said it will close, or reduce staff, at about 120 branches, primarily in Mexico and the Caribbean. The changes affect about 10 percent of its international operations, Chief Executive Brian Porter told analysts.
"The frustration for us is across the international footprint we've had very solid asset growth over the past three or four years, and not all of that has dropped to the bottom line," he said on a conference call. "We continue to look at initiatives to reduce our structural costs."
Porter, who took over as CEO a year ago, said the bank's international operation was "absolutely" still in growth mode. Scotiabank has focused on Latin America, the Caribbean and Asia.
Acquisitions in countries such as Mexico have often resulted in overlap in data and call centers as well as branch networks, the bank said.
"In the Caribbean ... in some of these countries, we're just over branched and we have to size it to the economic reality of each of those countries," Porter said. Continued...