Wave of job cuts ‘probably just the beginning’ at Canadian banks

financialpost.com:

Canadian banks have resumed cutting jobs after a three-year hiatus, with lenders and investment banks so far dismissing at least 6,000 workers, and analysts predicting more to come as revenue remains under pressure.

Bank of Nova Scotia, Royal Bank of Canada and Bank of Montreal all disclosed plans in the past few months to reduce headcount by two per cent to three per cent, while smaller players Desjardins Group and Canaccord Genuity Group Inc. have also trimmed staff.

“This is probably just the beginning stages,” said Mike Rizvanovic, an analyst at Keefe, Bruyette & Woods. “The rest will depend on how things recover and if you go into a recession. There’s always potential for more.”

The moves come as Canadian lenders grapple with numerous stresses. As with banks in other countries, they’ve seen a significant jump in the cost of deposits and a slowdown in new mortgages. And deals have stalled in their capital-markets businesses: There hasn’t been a completed initial public offering of more than $500 million in Canada this year, according to data compiled by Bloomberg.

Meanwhile, as credit conditions deteriorate, with housing and commercial real estate under pressure, the banks are expected to take significant loan-loss provisions in the fiscal fourth quarter. And they may be facing another increase in the minimum amount of capital regulators require them to hold.

Wall Street banks resumed cutting staff months earlier, and, in some cases, the cuts have been deeper than those in Canada.

Goldman Sachs Group Inc. embarked on one of its biggest rounds of job cuts ever in January, when it moved to eliminate about 3,200 positions, amounting to 6.6 per cent of its workforce as of the end of last year. Morgan Stanley was also