TORONTO, June 5: With foreign banks starting to bang at the door and their merger plans rejected. Canada's big banks are turning to cost-cutting to squeeze out profit gains, says Reuters.

The round of frugality also comes as slumping equity markets reduce the earnings power of their brokerage divisions.

For the second-quarter reporting period that ended on , Thursday, Canada's Big Six banks reported combined earnings of C$1.92 billion, compared with C$2.02 billion for the same period last year.

In the past two weeks, three of them have Introduced various cost-cutting measures.

The deepest cuts are being made at Canada’s biggest bank. After reporting a one-third drop in second-quarter earnings. Canadian Imperial Bank of Commerce CM .TO on Thursday introduced a plan to identify high return businesses such as wealth management and electronic commerce and concentrate on them.

The plan contained a C$500 million cost reduction programme.

C1BC reported net income of C$300 million or 66 Canadian cents a share, for the second quarter, compared with C$434 million, or 97 Canadian cents a share, for the same period last year.

"Our goal going forward is to be the No 1 Canadian bank in total shareholder returns. I think you all agree we have a long way to go." the bank's chairman. John Hunkin. said during an analysts' call on his first official day in the top job.

Last week. Royal Bank of Canada RY.TO, the country’s

second largest bank by assets, said it plans to sell most of its major real estate holdings, valued at more than C$850 million, to focus on its core businesses.

The 33 buildings on the block include its flagship Royal Bank Plaza in the heart of Toronto's financial district.

"We feel we can take advantage of other opportunities with that money and get better returns for our shareholders and move consistent with our strategy which Is to be in hlgh-groivth. hlghertreturn businesses." David Moorcroft, vice-president of public affairs at