National Bank of Canada cuts 600 jobs in restructuring

A sign is pictured outside a National Bank of Canada branch in Ottawa, Ontario, Canada on August 27, 2009. REUTERS/Chris Wattie/File Photo

TORONTO (Reuters) - National Bank of Canada said on Thursday it will cut 600 jobs as part of a restructuring and take a charge of C$175 million ($131 million) in the fourth quarter.

Canada’s sixth biggest lender said the charge included severance payments to employees and the cost of changing premises. The restructuring will bring C$120 million in annual savings.

The bank said that at the same time it is looking to fill over 500 positions, primarily in sales, service and IT functions and expects to increase the proportion of its staff in “knowledge-intensive” sectors over the coming years.

Banks around the world are adapting as customers visit branches less and use mobile banking apps more.

“The shift to a digital economy offers tangible growth opportunities for National Bank but requires us to remain agile and efficient in fully meeting client expectations,” said National Bank of Canada Chief Executive Officer Louis Vachon. “Our clients’ habits are changing, and our services need to change with them.”

National Bank of Canada said the charges will reduce its core tier 1 capital ratio, a key measure of financial strength, by 14 basis points to around 10 percent.

($1 = 1.3360 Canadian dollars)

Reporting by Matt Scuffham; Editing by Jeffrey Benkoe