TORONTO — The Bank of Montreal quietly made swift and widespread staff cuts in the fourth quarter, reducing its workforce by the equivalent of nearly 1,000 positions.
Chief operating officer Frank Techar confirmed Tuesday during a conference call to discuss the bank’s fourth-quarter results that BMO made the cuts in an effort to reduce expenses and make the bank’s overall operations more efficient.
The total reductions were “full-time equivalent” positions, which are calculated on an average work week, but can include part-time jobs.
“We did see a big reduction in the head count,” he told analysts in a financial results conference call.
But he conceded that the bank may have actually laid off too many people at once.
“For the quarter, we overshot a little bit,” he said. “We do have some outstanding vacancies that I would expect we will fill as we go into the first quarter.”
Typically, a public company issues a news release about significant layoffs as part of its disclosure practices, although Canadian banks haven’t always followed that practice.
Most of the cuts were made at the Bank of Montreal’s Canadian personal and commercial banking operations, where about 730 jobs were eliminated.
At the end of the fourth quarter, BMO had about 45,631 employees across its business, which includes its U.S. banking operations, wealth management division and capital markets.
The last time BMO made deep cuts to its workforce was when it laid off three per cent of its staff in 2009 amid widespread economic uncertainty.
Meanwhile, there’s a divide between how the Bank of Montreal is characterizing its fourth-quarter results and the underwhelming reception from analysts and investors.
The Toronto-based bank said Tuesday that growth in Canadian loans and its wealth management division helped deliver a strong quarterly net income of $1.09 billion, which was about one per cent higher than a year earlier.
But several analysts say there is a notably different story beneath the headline figures.
“When you start digging into the numbers, it looked pretty disappointing to me,” said Tom Lewandowski, a financial services analyst with Edward Jones in
St. Louis, Mo., who said BMO fell “well below” his expectations.
He pointed to weakness in the bank’s U.S. operations as one key area that fell short.
Adjusted net income for the quarter fell two per cent from a year ago to $1.102 billion. That was well ahead of estimates, but included a one-time $121-million gain that one analyst said would put off investors.
BMO’s overall adjusted earnings including the one-time gain amounted to $1.64 per share, down one cent from a year earlier, but ahead of analyst estimates of $1.58 per share.