Bank of Montreal is trimming the ranks of its capital-markets arm, eliminating approximately 100 jobs as the bank continues to hunt for ways to control its costs.
The job cuts were announced internally over the course of a few days this week, according to sources who were granted anonymity by The Globe and Mail because they were not authorized to discuss the changes. The job losses span a range of divisions and seniority levels in Canada and the United States, as well as in other countries where BMO does business.
In April, BMO revamped the leadership of its capital-markets team, as four senior bankers left. And that shuffle came six months after Dan Barclay was installed as CEO of BMO Nesbitt Burns Inc., succeeding Pat Cronin, who had been promoted to be BMO’s chief risk officer.
Like many of its peers, BMO had to weather volatile conditions for capital markets at the tail end of 2018 and while markets have calmed since then, the division continues to face a challenging climate. In its first fiscal quarter, which ended Jan. 31, BMO reported a 6-per-cent drop in profit from capital markets, compared with a year earlier – and that stood out as a good result relative to several other major banks.
BMO is also in the midst of a bank-wide drive toward greater efficiency that has been a key priority for chief executive Darryl White, who is himself a former head of the capital-markets division. BMO’s efficiency ratio, which measures expenses as a percentage of revenue, is above 60 per cent, trailing other large Canadian banks by a wide margin.
“Our strategy is clear and unchanged and will continue to be client driven. From time to time, we make adjustments to align with the current market environment,” a BMO spokesperson said in a written statement.
As of the end of January, BMO Capital markets had 2,747 full-time equivalent employees, up from 2,375 two years earlier.
As part of its efficiency drive, BMO has been scrutinizing every corner of the bank, from staffing levels to procurement contracts. And while Mr. White has declined to project what that will mean for BMO’s total headcount, he said at the bank’s 2018 annual shareholders meeting that “I don’t think it’ll be a heavier bank going forward, put it that way.”
Stay up to date on all our Streetwise stories. We have a Streetwise newsletter, covering mergers and acquisitions, plus financial services news. It is sent Tuesday to Saturday morning. Sign up today.
James Bradshaw
Andrew Willis