The cuts will affect about 2,300 people across all parts of the bank’s operations. It reported net income of $1.2 billion for the quarter ending October 31, a drop from about $1.7 billion last year. (The Logic)
Talking point: These are the most dramatic staff reductions by BMO, or any Canadian bank, in more than 15 years. Until now, Canadian financial institutions have largely avoided the cuts roiling global banks, which have eliminated more than 75,000 positions so far this year. BMO is looking to reduce costs while increasing its efficiency ratio, a measurement for how much it spends to create a dollar of revenue. It’s currently at 60 per cent, but it’s looking to hit 58 per cent by fiscal 2021. U.S. banks will cut over 200,000 staff in the next decade as automation allows firms to replace humans, according to an October report from Wells Fargo. That’s possible in part because of their US$150-billion annual investment in technology. Canadian banks are spending a fraction of that.