RBC confirms it is cutting 450 jobs, mostly at Toronto head offices

Royal Bank of Canada said Wednesday it is cutting roughly 450 jobs, primarily at its head office locations in the Toronto area.

Bank says it's making changes to meet clients' needs, despite 2nd quarter profits higher than last year

Royal Bank says it is trimming staff at its head office location in the Toronto area (Reuters)

Royal Bank of Canada said Wednesday it is cutting roughly 450 jobs, primarily at its head office locations in the Toronto area.

"We are making changes that focus on the capabilities that we need now and in the future to meet our clients' evolving needs," RBC spokesperson Catherine Hudon said a statement emailed to CBC News. 

"As always, we consolidate where necessary so that we can re-invest in key areas including digital, data, new technology as well as investment in high growth business areas," she said.

Hudon said the bank is making "hundreds of changes" including promotions, transfers, creation of new roles and new teams.

The bank has more than 80,000 staff, including full-time and part-time employees.

Canadian borrowing down

James Shanahan, a senior equity research analyst covering the financial services industry for Edward Jones, said Canadian banks are responding to a difficult revenue and loan-growth environment.

"Consumers and businesses in Canada just simply aren't borrowing as much as they had in previous years," he said, adding that with slowing loan growth comes slowing growth in revenue and earnings.

"I think what they're doing here is they're generally looking for  opportunities to reduce expenses as a way to drive earnings growth going forward," Shanahan said.

In May, the bank reported a second-quarter profit of $2.81 billion on revenue of $10.31 billion. The profit was up nine per cent from the same quarter a year ago, while its revenues rose from $9.53 billion.

The profit amounted to $1.85 per share, up year-over-year from $1.66 per share.

RBC shares dipped by 48 cents to close at $93.28 on the Toronto Stock Exchange on Wednesday.

with files from Meegan Read