ECONOMY

Drastic cut in banking sector is in line with rest of economy

The post-crisis picture shows that the domestic credit sector has undergone big changes, with almost 12,000 jobs gone and about 1,000 fewer bank branches, while 13 banks have disappeared from the banking map in what has been an unprecedented restructuring as a result of the need to adjust to the new reality that brought the country to the verge of bankruptcy.

In Greece alone, local lenders have cut some 11,700 jobs since December 2010, amounting to a staff reduction of almost 20 percent. Their branch network has shrunk by 26 percent while the number of banks has gone down from 20 to just seven: National, Piraeus, Alpha, Eurobank, Attica, HSBC and Panellinia.

Already ATEbank, Emporiki, Marfin Egnatia, Hellenic Postbank, Millennium, Proton, Probank, FBBank and the Greek branches of Bank of Cyprus, Cyprus Popular and Hellenic have been consigned to the financial history books, while Geniki will soon be absorbed by parent group Piraeus and Citibank’s local network has already been bought out by Alpha.

The shrinking of the banking system reflects the contraction of the economy, which has declined by about a quarter over the last five years. However, on the slightly bright side, the major decline in staff numbers has been largely in the form of voluntary exit programs and retirements.

Bank officials tell Kathimerini that the credit system’s restructuring has mostly been completed and that it is just minor adjustments that remain. One of these is the streamlining of the Piraeus network, as after the absorption of six banks in the last couple of years it has taken the sum of the group’s branches from 1,354 in March 2013 to 903 in March 2014 and will need to reduce them further to 860 by the end of the year.