Comerica to cut 16 Mich. branches through ’17
Comerica Inc. plans to close or consolidate 16 Michigan bank branches through next year in its efforts to cut costs.
As part of Comerica’s GEAR Up (“Growth in Efficiency and Revenue”) initiative announced July 19, officials have undergone a comprehensive review “to assist in the goal of appropriately reducing our overall real estate footprint,” spokeswoman Kathleen Pitton said Tuesday.
Comerica announced in July that it planned to cut 9 percent of its workforce nationwide, or about 790 workers, aiming to trim expenses by $110 million in 2017, increasing to $160 million in total by the end of 2018. Comerica had 8,792 full-time employees as of June 2016.
The company recently told customers about plans to close eight locations in central and west Michigan in April 2017 and four in southeast Michigan in May 2017: the Ann Arbor-Sheldon branch in Plymouth; Hayes-17 Mile in Clinton Township; Pinehurst in Bloomfield Hills; and the Canton Mart in-store banking center, she said.
Officials earlier announced four consolidations slated to occur in November in Metro Detroit, Pitton said: Northland (Southfield), Michigan-Neckel (Dearborn), Van Dyke-Continental (Warren) and Plymouth-Winston (Redford Township).
“We have banking centers located within a few miles of the vast majority of these offices where customers will be able to continue to conduct their banking once these consolidations are complete,” Pitton said.
The consolidations, she added, “reflect our customers’ migration to a broader use of digital channels and are part of our plans to consolidate 38 banking centers nationwide ...”
The cuts came amid stockholder dissatisfaction after poor first-quarter earnings reported earlier in 2016, when earnings fell from $132 million to $59 million in a year.
On Tuesday, Comerica Inc. reported third-quarter 2016 net income of $149 million, compared to $104 million for the previous quarter and $136 million for the same time in 2015. Meanwhile, earnings per diluted share were 84 cents for the third quarter compared to 58 cents for the second quarter 2016 and 74 cents for third quarter 2015, officials said.
“On our last earnings call, we announced that we had identified more than 20 work streams in our GEAR Up initiative that are expected to drive a significant improvement in our bottom line,” said Ralph W. Babb Jr., chairman and chief executive officer said in a statement.
“At that time, we also indicated there was more to come, as we were still identifying and analyzing opportunities. We have determined that those new opportunities add about $40 million to our initial financial target. As a result, we are now expecting to drive at least $270 million in additional pre-tax income for full-year 2018. These actions, which we have already begun to execute with urgency, take us a long way towards achieving a double-digit return on equity.”