Greek banks to close down 800 branches, cut 8,000 personnel

November 12, 2018

Greek systemic banks are forced to cut 8,000 personnel and close down 800 branches across the country. The Single Supervisory Mechanism of the European Central Bank keeps reminding the Greek banks that they have to proceed with drastic cut of operational cost and thus as soon as possible.

It was only recently that the SSM returned a plan submitted by a Greek bank as it did not include the sufficient number of staff cuts, Imerisia newspaper reported on Sunday.

Greek banks will have to change structure, logic and policies, go into the digital era, reduce operational costs and get  rid of 8,000 staff in total.

The merges in 2016-2017 have created super banks with a big number of branches and a huge number of personnel.

Alone in two systemic banks 5,500 to 6,000 personnel will have to leave.

“Banks will suffer what the business world suffered in recent years: large cuts in the number of workers,” a banker told the newspaper.

Banks try to make the voluntary exodus attractive to personnel with bonuses, however, the voluntary exit program do not yield the expected results.

Bonuses were reportedly at €400,000-€500,000* before the economic crisis, now they are at approximately €180,000 for executives and much lower for ordinary staff.

Furthermore, the age of bank employees has fallen to 40 to 45 years after many left with early retirement in the crisis years.

A bank employee aged 40-45 will hardly abandon his job when it is highly doubtful that he can obtain a job with a similar income elsewhere, the newspaper notes.

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Banks will most probably have to adopt other solutions to remove redundant staff, however, with doubtful results as well.

Last month, Piraeus bank proposed to its staff union a 12-month sabbatical without pay, of course. the union rejected the proposal out of fear of permanent job losses.

Pressure for lean and digital banks is high, though.

President of National Bank of Greece, Nikos Karamouzis, said recently that the four systemic banks will have to invest €3 billion for new technologies that will take them to their digital transformation.

“This transformation is imperative and is provided for in the restructuring plans approved by the SSM,” as new technologies are constantly gaining ground.

The Greek banks will have to proceed with the changes in the next 18 months, and each systemic bank will not have more than 250-300 branches.

According to the statistics of the Greek Banking Union (EET), by the end of 2017, the four systemic banks had a network of 1972 branches.

By end of 2017:

  • Piraeus Bank had 12,848 employees and 622 branches
  • National Bank:had 9,970 employees and 485 branches
  • Alpha Bank: 8,431 employees and 469 branches
  • Eurobank: 8,026 employees and 396 branches.

In 2017, the number of employees in Piraeus, Ethniki, Alpha, Eurobank, Attica, HSBC totaled  40,317 and the network numbered 2,042 branches. In 2016 the corresponding figures were 41,119 people and 2,206 branches. In 2011 before the mergers started, there were 56,042 employees and 3,565 branches, imerisia notes.

*now we know why we had to bailout our banks….

PS and if you think that closing down branches is an easy task for Greek banks, you are most probably living far away from the Greek reality. Two systemic banks closed their branches in our area with the effect that we are left with an ATM of a third bank that had no branch nearby anyway. Now one of these two banks that closed their branches has 3 branches in a radius of 200 meters in the commercial center of our suburb. The second bank has two branches, also relative close to each other. We are at a distance of 3 km to these banks and, of course, we need to private or public transport means if we want to withdraw a 20-euro banknote from the ATM. By a ticket price of €1.40 certainly a  …good deal, right ?

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