National Bank says it won’t follow rivals in eliminating services

MONTREAL — National Bank of Canada is cutting branches and jobs to fund its digital transformation but won’t eliminate services as other financial institutions have done, its CEO said Wednesday.

“We have not stopped offering banking or transaction services in our branches, unlike some of our competitors,” Louis Vachon said in a conference call to discuss its strong third-quarter results.

Canada’s sixth-largest bank (TSX:NA) beat analyst expectations as its net income increased 8.4 per cent to $518 million or $1.37 per share, lead by strong support from its personal and commercial, and wealth management operations along with cost controls.

Total revenue was up 7.6 per cent at $1.68 billion.

Excluding one-time items, adjusted profits were $524 million or $1.39 per share, six cents per share above last year and $1.32 per share forecast by analysts.

Vachon’s comments came a day after Montreal-based rival Laurentian Bank (TSX:LB) said it would cease to offer certain types of counter services like depositing a cheque between now and the end of 2018.

The move would eliminate the equivalent of 150 full-time positions. That’s in addition to 300 job cuts announced last September as it reduces the number of branches to 100 from 150.

Other Canadian financial institutions, including Bank of Montreal (TSX:BMO), Scotiabank (TSX:BNS), Toronto-Dominion (TSX:TD), CIBC (TSX:CM) and Desjardins, are also restructuring their operations in part to improve their digital operations.

Royal Bank (TSX:RY) said this week that its closure of 25 branches mainly in city centres across Canada over the past year is having a minimal impact on clients, as it increasingly shifts toward digital services.

National announced last fall that it plans to cut 900 positions over the next 12 months as it invests more in digital services. It is down to 21,526 employees while seven branches have been eliminated with some others being reduced in size.

“We are very sensitive that we are in the middle of a massive transformation,” Vachon told analysts.

“You do have to reduce the costs on the physical network so you can reinvest on the digital side to move where the clients want to go to.”

Analyst John Aiken of Barclays Capital said domestic operations are benefiting from National Bank’s exposure to the Quebec economy.

“We would expect the performance in its retail banking platform to be repeatable in the near term,” Aiken wrote in a report.

Vachon said the bank is helped by a resurgent provincial economy where unemployment has hit a 40-year-low, the employment rate among the working age population is at a historic high and affordable housing is keeping a lid on indebtedness.

Higher family incomes has made them more resilient, as was the case in 2009 when loan losses didn’t go up as much as in other parts of Canada, he said.

“Quebec is a no boom, no bust economic jurisdiction,” he added. “So we do not have explosive growth of four to five per cent, but at the same time when things get rough we have less volatility to the downside.”

Just Posted

Joshua Frank takes stand in murder trial

Joshua Frank testifies he had no idea Klaus family would be murdered

Doctor first in Red Deer to offer Mohs surgical suite for skin cancer

A local doctor says a skin cancer surgery newly offered locally will… Continue reading

Lacombe family in TV cooking contest needs Central Albertan votes

The Gustafsons are in the running to win a trip to Italy

Methamphetamine, THC found in half-million dollar seizure and Bowden Institution

Nearly half a million dollars worth of drugs and other contraband was… Continue reading

Community support needed to bring Canadian Finals Rodeo to Red Deer

Bid from Westerner Park and Red Deer & District Chamber of Commerce

WATCH: National women’s hockey team in Red Deer

Before heading to next year’s Olympics in South Korea, the women’s national… Continue reading

New columnist joining Advocate team

Market Gypsy starts on November 30

Volunteer with victim services in Red Deer

Learn more at info session on Nov. 27

Updated: Missing Sylvan Lake women found

Women were reported missing earlier this week

Liberals propose billions for affordable housing, including individual benefits

A Liberal government fond of promising help for those working hard to… Continue reading

Alberta Party sees growth in Central Alberta

Greg Clark addressed health care needs addressed in Red Deer

Ponoka council freezes Ponoka Fire Department spending

All discretionary spending frozen until full budget numbers are presented

WATCH: Ponoka’s Festival of Trees sees continued support

Three days of celebration and fundraising held at the Calnash Ag Event Centre

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month