At a time when layoff announcements are increasing in the Canadian banking sector, National Bank management seems to believe that resignations and retirements will be enough to avoid layoffs over the next 12 months.
In nine months, the size of the financial institution’s workforce in Canada fell by 313 employees, or 1.6%, to 18,735 full-time equivalents, as of October 31.
“We were proactive in managing our expenses at the start of the 2023 financial year [ending last October 31] and we will continue in 2024,” underlines the head of finance, Marie Chantal Gingras, during a conference call on Friday. to discuss fourth quarter results.
The bank, whose head office is in Montreal, does not plan to record any restructuring charges during the next fiscal year, as other Canadian banks have done due to severance pay.
“We have been very clear: a charge is not something we are considering,” replied Ms. Gingras. Now that we’re entering fiscal 2024, we’re still in the same mindset. »
On Thursday, TD Bank announced it would lay off 3% of its workforce, representing nearly 3,100 employees. The same day, CIBC announced that it was taking a charge of $114 million to its results to reflect the fact that it had reduced its workforce by 5%, or 2,300 jobs, during the year.
In October, Desjardins Movement announced the elimination of “less than” 400 employees at its Montreal offices and Lévis head office. In June, Desjardins Movement laid off 176 people in Montreal.
The economic context remains a challenge, warns the big boss of the National Bank, Laurent Ferreira. “The effect of tightening monetary policy is starting to take effect. This puts pressure on our customers as consumers and businesses have to adjust to the higher cost of borrowing. »
The bank has also put more money aside for overdue loans. The provision for credit loss reached 115 million, compared to 87 million at the same period last year.
The head of risk management, William Bonnell, reiterated that Quebec was in a good position. “In Quebec, house prices are lower, household debt is lower and there are more two-income households. »
Despite a difficult context, the National Bank revealed results above analysts’ expectations with a 4% increase in its net profit to reach 768 million. Adjusted diluted net income per share was $2.44.
Before the results were released, analysts had expected earnings per share of $2.26, according to financial data firm Refinitiv.
Scotiabank analyst Meny Grauman attributes the discrepancy to the financial markets division. “National Bank has demonstrated that it can consistently deliver strong results in this sector of activity, but we believe that changes to the tax rules on dividend deductions will have a greater impact on National Bank than on its peers. . »
For its part, the National Bank still anticipates that the Financial Markets division will continue its growth during fiscal year 2024, says the Senior Vice-President of the Financial Markets Department, Étienne Dubuc. “We see a lot of opportunity for global markets in 2024.”
The institution announced that it was increasing its quarterly dividend by 4 cents to $1.06. It also launched a new share buyback program targeting a maximum of 2% of its outstanding securities.
National Bank shares ended the day up $4.36, or 4.9 per cent, at $94.28 on the Toronto Stock Exchange.
