Pressured by skeptical analysts to bring its expenses more in line with its revenue, Dallas-based Comerica Inc. announced some tough measures this week to do just that. Among them: trimming 9 percent of its roughly 8,800-employee workforce and shuttering 40 (or about 8 percent) of its locations.
The big regional bank hopes steps like these—part of an initiative called Gear Up—will save Comerica about $160 million by the end of 2018, thereby improving its so-called “efficiency ratio” (that’s its ratio of expenses to revenue).
Comerica’s efficiency ratio has lagged its peers for awhile. That’s been due in part, the bank said, to losses on its loans to the troubled energy industry and to the prolonged low-interest rate environment in general. While some analysts have called the bank slow to respond to these challenges, a Comerica spokesman said its cost-cutting efforts have been ongoing.
“We’ve been working to reduce costs over the last several years,” said Wayne Mielke, the bank’s vice president for corporate communications. “We have renegotiated vendor contracts, reduced our real estate exposure, and rationalized our overall operations. These measures were effective in their own right, but they weren’t enough.”
