National Bank CEO worried about effect of remote work on downtown Montreal

The head of National Bank says he's worried about the impact of remote work on the vitality of downtown Montreal, but plans to maintain a flexible approach towards being in the office with his employees. The head office of the National Bank is seen Friday, April 21, 2017 in Montreal. THE CANADIAN PRESS/Ryan Remiorz

The CEO of National Bank plans to maintain a flexible approach toward his employees working in the office, even though he's worried about the impact remote work is having on the vitality of downtown Montreal.

Laurent Ferreira said he's worried about the effect the widespread adoption of telecommuting is having on small businesses in Montreal's downtown business district.

"I'm concerned for downtown Montreal and I think the business community has a very great responsibly (to ensure) the dynamism of Montreal's ecosystem," he said in an interview Friday, during the bank's annual shareholders meeting.

But, for now, Ferreira doesn't want to impose anything on his teams.

"We want a flexible approach. We want the teams to organize themselves and for them to decide when they need to meet, work together," he said.

It's an approach that contrasts with that of the Royal Bank of Canada, which has asked its employees to work from the office three or four days a week, depending on the nature of their work.

National Bank is suggesting workers come in 40 per cent of the time, though Ferreira said he would like a "better balance" that sees employees coming in more frequently.

But he said telecommuting hasn't had a negative affect on the productivity of the bank's employees.

Around 12,000 people work at National Bank's downtown Montreal headquarters. The bank will begin gradually moving into a new 40-storey tower during the second half of the year. The project, announced in 2018, represents an investment of more than half a billion dollars.

Ferreira told the shareholder meeting he expects the economy to slow in 2023 and 2024, but noted that the job market remains resilient.

National Bank is in an enviable position to deal with an economic slowdown, Ferreira said, with higher capital reserves than its peers.

"Because we're in an advantageous position, that might allow us to gain market share," he said.

National Bank's capital ratios were at 12.6 per cent on Jan. 31.

"It's more than the required minimum of 11 per cent and more than most peers when you take into account their acquisition plans," said Darko Mihelic, an analyst at RBC Capital Markets.

National Bank wants to grow organically, without acquisitions, in other Canadian provinces and has identified commercial banking and wealth management as its main avenues for growth.

"That's where we're putting the emphasis, especially outside Quebec, but you understand that commercial and wealth management clients also need a bank account and a credit card, so it's all related," he said.

Like the CEOs of other large Canadian banks, Ferreira was asked about the institution's environmental policies during the shareholders meeting. The bank does not want to completely divest from the oil and gas sector, but want to support companies that are making efforts to decarbonize their operations.

This report by The Canadian Press was first published April 21, 2023.