The Bank of Montreal (BMO) is making further cuts to its U.S. investment banking unit, including the dismissal of at least two managing directors. This move is part of a broader effort to reduce costs, according to sources familiar with the matter.
The recent layoffs have affected several employees in the health-care division, although the exact number has not been disclosed. A spokesperson for BMO declined to comment on the specifics.
This follows a significant reduction last June, when about 100 positions were eliminated at BMO Capital Markets. In August, BMO revealed a restructuring plan aimed at saving $400 million (US$293 million) annually. The bank aims to achieve this target by the end of 2024. During a fiscal first-quarter earnings call in February, CEO Darryl White confirmed that the bank is on track to meet this goal. "We’ve reduced expenses by 4 percent from last quarter and remain focused on returning to positive operating leverage beginning next quarter," White stated.
Despite these cost-cutting measures, BMO’s capital markets division reported a 19 percent drop in net income, totaling $393 million for the quarter ending January 31. This decline was primarily due to lower trading revenue. Notably, the U.S. segment contributed to just under half of this profit. However, executives expressed optimism about improving activity levels moving forward.
BMO's strategic focus on cost reduction reflects broader trends in the banking industry, where firms are seeking to streamline operations amid fluctuating market conditions. As BMO continues to adjust its workforce and operational strategies, the impact on its U.S. investment banking unit will be closely watched by industry analysts and stakeholders alike.
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