Bank of Montreal will lay off 1,850 jobs, nearly 4% of its total workforce, as it looks to trim costs following a decline in quarterly profit.
Bank of Montreal will lay off 1,850 jobs, nearly 4% of its total workforce, as it looks to trim costs following a decline in quarterly profit.
With an increase in the number of its customers switching to online banking, the bank is forced to cut jobs and invest in technology.
Bank of Montreal chief executive Bill Downe was quoted by Reuters as saying: "We have taken this step to position the bank for what lies ahead – and to account for the structural changes underway in the financial services industry."
The bank’s chief financial officer Tom Flynn said that the job cuts would be more in its retail banking operations than its investment banking arm, as the bank plans to shut down some branches in the medium-term.
Flynn said that the transactions made by its customers online and mobile platforms went up by five million in the past two years compared to a fall in transactions at its branches.
Flynn was quoted by CBCnews as saying: "The underlying activity that drives the charge really relates to the increased use of technology in our business.
"And that’s true both on the customer-facing side, where customers are increasingly doing things in a digital way – either mobile or online – but also in terms of how we use technology to drive efficiency in our business."
The bank has aside $132m for the restructuring plan, which weighed on its profit in the quarter ended 30 April.
Provisions made by the bank to cover bad loans in the oil and gas sector increased to $201m in the quarter from $161m in the corresponding quarter last year.
The bank witnessed a drop in its profit due to restructuring costs and increase in bad loan provisions
Its net income fell 3% to $973m in the February-April quarter compared to $999m in the same period a year earlier. Revenue rose to $5.10bn from $4.53bn on year-over-year basis.
Image: BMO, Toronto. Photo courtesy of Andrevruas/Wikipedia.