BMO is making strategic changes to its capital markets arm.Fred Lum/The Globe and Mail
Bank of Montreal is quietly making strategic changes to its capital markets arm, announcing jobs cuts and a realignment of roles throughout the month of April.
In total, roughly 50 people have lost their jobs, according to people familiar with the situation – many of whom are senior professionals, including directors and managing directors.
Rob White, who had responsibility for BMO's fixed-income, currencies and commodities business, is no longer with the bank.
The changes are spread out across departments and countries, with job losses in areas such as sales and research, and spanning the world from Canada to Hong Kong and India.
A number of groups now have different reporting lines as well – the Canadian high-yield desk, for instance, will report to the bank's leveraged finance group in the United States.
The restructuring follows the transition of BMO's capital markets leadership last fall. At that time, Darryl White, the group's current chief executive, took over. Speaking at a conference earlier this year, he said he had confidence in BMO's existing capital markets strategy. He added, however, that there had been some changes to "resource deployment," and that "we will look at others" – foreshadowing the recent cuts.
In the weeks since Mr. White spoke at that conference, BMO announced plans to re-organize its sales and trading group, which included naming co-heads for a global equity team that combined research, sales and trading. The bank also announced the retirement of Mike Miller, who had run equity products and research since 2008.
Over the last four quarters, BMO's interest-rate trading arm saw revenues drop 48 per cent, while foreign exchange trading revenues jumped 17 per cent and commodities trading revenues climbed 11 per cent.
Addressing the flurry of changes over the past month, BMO said in a statement, "We are making some changes with respect to how we allocate our resources, and remain fully committed to our clients, and our strategy has not changed."
The chief executive of the bank's capital markets arm stated that, in Canada, one of his goals was to have a top-three market share in every capital markets business line. At the National Bank financial services conference in March, he also said that "when we don't, we have some difficult conversations and we try to make sure that we can get back into that objective."
In the United States, BMO's capital markets arm deploys a different strategy. It targets the mid-market, hoping to advise companies who have market values between $200-million and $5-billion (U.S.).
Outside North America, BMO has focused on building out its wealth-management business and bought London-based F&C Asset Management PLC for $1.3-billion (Canadian) in 2014. Before the current restructuring, some markets, such as India and Hong Kong, had small investment-banking groups. These teams have been retooled to focus more on trade finance.
BMO's capital markets changes come after Bank of Nova Scotia made similar cuts and shuffled managers over the past few months. Last fall, the bank's capital markets arm made multiple changes to its global equity and advisory, global foreign exchange and global fixed income groups. Those moves were made as part a broader campaign to slash 1,500 jobs across the entire bank.
Since then, Scotiabank has shuffled managers on its trading floor, with Vikram Rao, co-head of global fixed income sales and trading leaving the bank. Kevin Felix, global head of fixed income, currencies and commodities, also named three new managing directors.