In what is every employee’s worst fear, the Bank of Nova Scotia (TSE:BNS) (NYSE:BNS) said it will cut its global workforce by 3%, which caused shares to slip. Indeed, the company, also known as Scotiabank, said the move became necessary after it increased automation and digitization of services in response to customers’ banking preferences. The Toronto-based financial company said the workforce cut will enable it to streamline its operations and invest in “key growth opportunities.” However, in the short term, this will result in a C$590M (US$432M) charge after taxes ($0.49 per share) and a 10 basis point drop in its CET1 ratio.
Apart from the layoffs, Scotiabank will also have to pay C$63 million in after-tax charges for consolidating and terminating some real estate properties and service agreements. In addition, its stake in Bank of Xi’an Co. Ltd. will also result in impairment charges of C$280 million, as the investment’s market value has dropped. Scotiabank’s earnings report is due on November 28.
Is BNS Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on BNS stock based on zero Buy, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average BNS price target of C$72.10 per share implies 22.48% upside potential.
