Lower bank rates could lead to job losses

Scotia Group President and CEO, Bruce Bowen, has indicated that if interest rates and bank fees are to be reduced, the result could be job losses in the banking sector.

The banker, who was speaking at a Rotary Club meeting earlier Thursday afternoon, said the prevailing high interest rates and bank fees are a result of the high cost banks face to operate.

The Scotia head said, in his organization, he is trying to drive down operation costs, and indicated it could result in some job losses.     

“The bottom line is that we just need to be able to delivering the services at a lower head count in order to achieve that so that’s one of the big priorities that we have,” he said.

He said Scotiabank is trying to direct some transactions to electronic channels to help cut costs as he highlighted that salaries and wages cost the Scotia Group $7 billion each year.

Mr. Bowen said it is an attempt to supplement those costs that is the reason behind some of the bank fees that are now being charged.     

“If we charge no fees, we need a wider margin and a wider spread. The philosophy is where we can identify a specific cost related to certain types of transactions that everyone doesn’t do, to the extent that we can attach a fee to those services so we don’t have customers that aren’t using that service subsidizing those that do,” Mr. Bowen said.