Scotiabank to retrench 149 employees, close 2 branches

Nearly 149 workers have been targeted for retrenchment by Scotiabank TT which will also close two branches.

Scotiabank said via email Thursday said the move was necessary due to its digital transformation.

It said, “A total of 149 employees will be impacted over the period March-May 2022. These decisions were not taken lightly, and we will ensure all employees are treated fairly and with respect as they transition employment.

“Upcoming changes will result in the consolidation of certain support services and back-end functions, including the consolidation of a part of our collections unit into our global business services hub in the Dominican Republic – which also currently services our Canadian operation. Over the next few months, OSSCL (Operations and Shared Services Company Ltd) will also be impacted by the expiry of some operations functions that support the divested Eastern Caribbean territories.”

The bank said it advised in November 2021 that there would be changes to the branch network which included continued investments in technology as there have more viable digital alternatives for conducting banking business.

“Customers are using our branches differently today – less frequently, as they complete more transactions online, and more for complex needs.”

Scotiabank said its Cipero and Rushworth Streets branch in San Fernando will be closed as of March 18 and the operations will be consolidated into the High Street branch.

Effective April 14 its Park and Pembroke Streets branch will close and the operations will be consolidated into the Independence Square, Port of Spain branch; also the Cunupia sales centre will be consolidated into the Cunupia branch as of March 25.

It said post consolidation, the ATMs at Cipero and Rushworth Streets and Park and Pembroke Streets would remain operational and customer accounts will be transferred automatically, so no action was required from them at this time.

The changes occur after a year of improved profitability for the bank which recorded an after-tax income of $604 million as of October 31, 2021. This was an increase of $83 million, or 16 per cent, when compared to the previous year's $521 million.

In the results released in December, senior vice president and managing director and head for the Caribbean South and East Gayle Pazos said the covid19 pandemic increased online banking services by almost 67 per cent and digital transactions increased by over one million or 42 per cent over the previous year.

She said the income increase was due to effective cost management strategies.

“Consistent with trends noted within our industry, our revenue has been negatively impacted by the continued economic challenges. Total revenue declined by $48 million or three per cent with net interest income declining by $94 million or seven per cent.

“The decline in net interest income was partially offset by non-interest income increasing by $46 million or ten per cent as we saw some recovery in key core banking activity,” Pazos said.

Non-interest expenses dropped by $55 million or seven per cent because of improvements to operating cost management in the face of lower revenues, resulting in a 41 per cent operating efficiency.

It also reported a reduction in net impairment losses by $121 million or 53 per cent from the prior year, while total assets of $27.2 billion decreased slightly by $333 million.

Loans to customers declined by $545 million due to lower economic activity and reduced borrowing and deposits from customers also declined by $627 million because customers opted to use alternative channels.

Pazos said, “The bank continues to hold a strong capital adequacy position of 18.1 per cent, well above the ten per cent minimum requirement of our local regulators, demonstrating our ability to withstand economic shocks."

She said both the insurance and wealth portfolios performed well with insurance recording a marginally increase in income after tax, and the wealth delivered solid growth in non-core banking business lines with increased non-interest income.

She said despite retail banking declines in its loan portfolio which was directly affected by the current economic climate, Scotiabank was seeing signs of recovery for 2022.