Canaccord Genuity to cut staff, skip dividend

Canaccord Genuity Group, the Toronto-based parent of the Canaccord Genuity wealth management business active in the UK and Europe, said Thursday it is to eliminate jobs and suspend its quarterly dividend, as it reported a third quarter loss of C$321m (US$231m).

However, the company said its wealth management operations in the UK and Europe held their own during the three months to the end of December, generating a pre-tax profit of C$6.5m on revenue of around C$35m. Assets under management (discretionary and non-discretionary) in this division rose by 7% during the quarter, to C$24.5 bn, the company’s latest results statement shows.

In an introduction to its results report, the TSX- and LSE-listed Canaccord cited “the combined effect of weak equity market conditions globally and in each of our principal operating regions”, which it said had resulted in third-quarter declines being reported “in each of our principal operating regions”.

Dan Daviau, President and chief executive of the Canaccord Genuity group, pictured, added that although “a number of cyclical factors in the broader economy continued to put pressure on revenue, and negatively impacted our third quarter performance”, the company was making “significant progress to re-position our business”. It was doing this, he added, with a strategy “centred around improving our operational efficiencies and better aligning our core strengths, so that we can return to profitability and steadily improve our bottom-line returns.”

Daviau was appointed to the CEO job in October, and has already begun to cut jobs and reorganise the company’s US operation, according to recent *press reports.

Another of the measures taken to reduce costs thus far has been to close Canaccord’s capital markets operation in Barbados. It continues to offer capital markets services in Canada, the US, the UK, France, Ireland, Hong Kong, China, Singapore and Australia.

Canaccord’s wealth management offices are located in Canada, Australia, the UK, Guernsey, Jersey and the Isle of Man.

As reported, Canaccord Genuity last month announced that it had poached Arthur Molloy from Creechurch Capital to be its Isle of Man-based investment director, to boost the “investment management potential” of its Isle of Man wealth management operations.

The Canaccord Genuity Wealth Management operation was created in the wake of the acquisition, first announced in late 2011, of London-based Collins Stewart Wealth Management by Cannacord Financial (as the company was known then).

The Canaccord Genuity Group is said to be Canada’s largest non-bank brokerage.

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