Bank of Nova Scotia will dismiss 3% of its employees and take a writedown on its investment in a Chinese bank in a broad restructuring that underscores new Chief Executive Officer Scott Thomson’s focus on cutting costs.

The reductions amount to about 2,700 jobs, based on the Canadian bank’s staff count as of July 31. Toronto-based Scotiabank said it will take a C$590 million ($432 million) charge to earnings in its fiscal fourth quarter, equal to 49 Canadian cents a share.

Shares of Scotiabank were down 1% to C$59.35 as of 10:56 a.m. in Toronto.

The job cuts are larger than those announced by rivals including Royal Bank of Canada and illustrate the scope of the challenges facing Thomson in the face of sluggish revenue growth and rising deposit costs. Scotiabank has called an investor day for Dec. 13 at which he’s expected to outline an updated strategy for the bank.

Thomson, previously the CEO of industrial equipment dealer Finning International Inc., said during an investor conference in September that he adopted a mantra of “better, faster and at a lower cost” in that role, and that he would bring “relentless discipline around cost management” to Scotiabank. He became CEO on Feb. 1.

Thomson has said that changes to the bank’s operations may include “end-to-end digitization” as well as centralizing its international unit rather than running it on a “country by country by country” basis. The bank has operations in Mexico, Peru, Chile, Colombia and other Latin American economies.

Scotiabank said Wednesday the impact on its common equity tier 1 ratio will be about 10 basis points. The ratio was 12.7% as of July, well above the regulatory minimum.

“We interpret the writedowns as a clean-up of the balance sheet and we view this positively,” RBC Capital Markets analyst Darko Mihelic said in a note to investors, calling the restructuring a “step in the right direction.” He said the impact on capital “is not concerning to us.”

The restructuring charges also include the cost of exiting real estate and other contracts. Included in the announcement are impairment charges of C$280 million, after taxes, related to the bank’s investment in Bank of Xi’an Co., “whose market value has remained below the bank’s carrying value for a prolonged period,” as well as impairment of intangible assets including software.

In its fiscal third quarter report in late August, Scotiabank said the market value of its 18% investment in the Chinese bank, based on Bank of Xi’an’s share price, was C$581 million. That was below the carrying value of just over C$1 billion, but the bank said at the time that it had performed an impairment test and “concluded there is no impairment as at July 31.”

The layoffs come two months after RBC said it would cut 2% of its full-time equivalent staff as it tries to reduce the growth in expenses. Bank of Montreal has also trimmed staff in investment banking, research and other areas.

Scotiabank’s move is “consistent with our expectations for more restructurings at Canadian banks in an effort to speed cost cuts and achieve operating leverage,” Bloomberg Intelligence analyst Paul Gulberg said in a note.

–By Christine Dobby (Bloomberg)