National Bank of Canada is undergoing a major internal reorganization that will see business units realigned across the entire bank and employee roles and responsibilities shaken up at both the corporate and branch levels.

In the midst of these moves, the bank has made a key acquisition, taking a minority stake in Winnipeg-based Wellington West Holdings Inc. — the latest in a string of five acquisitions in the wealth-management arena this year.

National Bank’s realignment, announced in September, will be made to “assure the future of the bank and to be ready for long-term growth,” says Denis Dubé, spokesman for the Montreal-based firm, Canada’s sixth-largest bank.

The bank has announced it will, over the coming months, review functions and roles at the corporate level to improve co-ordination and efficiency.

The effect will be job reassignments and some job losses at the corporate level, but more positions in the branches and in other client-facing positions, Dubé says. Branch staff and managers will have more decision-making powers and responsibility, but will also be more accountable.

The bank employs more than 17,000 people, and the effect on job numbers would be neutral, according to the bank, as newly created roles will replace those lost during the transformation. The bank won’t disclose the number of jobs affected.

With the reorganization, National Bank intends to align business operations with the primary aim of better serving customers; streamline processes and fast-track technology investments; and foster and support an internal culture of “co-operation, accountability and performance” across the bank.

The reorganization, known by its motto “One Client, One Bank,” is part of a five-year plan announced in 2007 by National Bank president and CEO Louis Vachon when he took over the top job.

Last year, National Bank was beset with problems related to the asset-backed commercial paper market. It was forced to transfer $2 billion of affected ABCP from its mutual funds and small clients to its own books. Despite those troubles, the bank has rebounded and managed to post better than expected earnings, including a profit of $286 million in its fiscal third quarter ended July 31, a 17.5% jump from the same period last year.

With these recent moves, Dubé says, the bank intends to continue to grow earnings and shareholder returns by strengthening its position as the largest bank in Quebec and continuing to expand in the rest of Canada. The bank also aims to ready itself to take advantage of opportunities, whether that is making acquisitions or playing a role in bank mergers, should a future federal government allow them.

“If mergers happen, there might be clusters of branches that, for competition reasons, become available,” Dubé says. “If we think it’s a good deal, we might make an offer for them.”

A key part of the “One Client, One Bank” transformation will be a greater alignment between wealth-management operations at the retail level and at National Bank Financial Ltd., the bank’s brokerage subsidiary.

Earlier this year, NBF co-president and co-CEO Luc Paiement took over responsibility for the bank’s entire wealth-management operations, including those at the retail level. With the recent reorganization announcement, all the bank’s wealth-management businesses will fall under Paiement’s supervision. These firms include Natcan Investment Management, the bank’s institutional money management subsidiary; National Bank Trust, the bank’s discretionary asset manager; and National Bank Direct Brokerage, the bank’s discount broker.

All wealth-management product development, marketing and distribution will also fall under Paiement’s purview.

As well as these changes, National Bank has announced it will be creating a new business unit specifically for high net-worth clients.

The moves in wealth management are being made to boost National Bank in an area in which it feels there is tremendous growth potential. “We want to be a more-involved player in the wealth management sector,” Dubé says.

While the reorganization in wealth management is meant to build business organically, National Bank also has been busy growing by acquisition.

The latest acquisition gives the bank a 12.5% stake in privately held Wellington West for $35.8 million. Subsidiary NBF will pay up to an additional $35 million if Wellington West hits certain earnings targets over the next three years. The bank has a right to purchase an additional 5% of Wellington West equity if existing shareholders decide to sell their shares.

In addition to the Wellington West deal, National Bank last month acquired Montreal-based Retirement Option Group, a full-service broker with $1.5 billion in assets under management.

@page_break@With these two purchases, National Bank now has made five acquisitions in the wealth-management arena so far this year. In May, National Bank bought Manitoba-based Bieber Securities Inc., and in February, the bank scooped up Toronto-based Aquilon Capital Corp. and Montreal-based Groupe Financier Everest.

“We’re always looking for acquisitions,” Dubé says. “If we see something interesting and the price is good, we will jump in.” IE