ECONOMY

Banks to reduce staff further

banks-to-reduce-staff-further

The expansion of technology use, accelerated by the coronavirus pandemic, is further bolstering the efforts of banks to reduce operating costs through staff cuts.

The outbreak of the Covid-19 health crisis has accelerated the digital transformation of the credit sector, doubling online banking in just four months, with the total number of internet banking users exceeding 3 million in Greece. Over 1.2 million people use mobile banking.

The size of the credit systems in the coming years will depend largely on the size of the country’s economy, as well as on the digital transformation that is already under way and is dramatically changing shape, leading also to changes in its structure and operation. The need for the physical presence of banks through branches has also gone down as a result, a development that entails a proportionate reduction to employee numbers.

The number of bank workers, which stood at 36,727 in end-2019, is expected to decline further by 2,500-3,500 until the end of this year, through an initiative launched by the systemic banks. This concerns two voluntary redundancy programs launched by Eurobank and National, the spin-off of the bad-loans department of Alpha Bank and its transfer to nonperforming loans management company Cepal, expected to be completed by year-end, as well as the sale of Ethniki Insurance, which the management of National has also started.

Last week Eurobank launched a generous voluntary exit program for staff that has complete five years of work at the group. The program will run until October 2 and estimates put the number of employees benefitting from it tat 700.

National’s new voluntary redundancy scheme will offer strong incentives, having already planned for its staff numbers to drop to 8,000 in Greece by year-end from 8,238 at the end of June. On the group level there should be a further reduction of employees through the sale of Ethniki, which employs approximately 900 people.

Staff cuts have been the priority of the credit system in an effort to contain costs in the last decade, and are now dictated by the significant reduction of branch activities via the sale of NPLs.