The European Commission is pressuring the management of Greek banks to restrict their operating costs, as part of the finalizing the restructuring plan of the four systemic banks. The ultimate goal is to return to operational profitability as soon as possible, after the number of banks was reduced by 15 to 5.
To that end, the EC has requested the closure of bank branches and the reduction of payroll costs through voluntary departures and wage cuts. High-ranking bank officials have suggested that up to 30% of branches could shut down, without affecting the quality of services provided.
Furthermore, the sector-wide contract that was agreed upon in May introduced a 6% wage cut and abolished a 3% balancing benefit. These changes will become apparent in the results of the second semester of 2013.
The Bank of Piraeus, which has the largest work load after the acquiring six credit institutions, has reduced its staff by 12% through voluntary departures. The National Bank and Eurobank are in touch with the European Commission to discuss the extent of staff cuts. Rumors suggest that the National Bank’s management has already agreed to 2,000 to 2,200 departures, while Eurobank is aiming for 500 to 1,000 departures.
So far Alpha Bank has not publicized its intentions, even though the bank has gone through with a 6.8% reduction due to retirements. An increase of retirements over the next few months is possible, as the bank has denunciated pension regulations. Further cuts might also urge more employees to retire, in order to take advantage of beneficial pension conditions.
