Banks need to find wage compromise
Banks are expected to submit an alternative proposal for pay hikes in the sector, in the fifth round of negotiations with the unions (OTOE) which was scheduled for yesterday but postponed. Bankers are said to be eager to reach an agreement, hoping to avoid arbitration, even if that means giving up on their demand for a more flexible work-hour schedule for another year. Nevertheless, prospects are still not favorable for the next meeting, as a huge gap remains in how the two sides perceive the serious impact of rising operating costs on employment, at a time when profits from a variety of operations, such as financial and portfolio transactions, are minimal to non-existent. For those banks with big bond portfolios, the situation is more serious and is expected to be reflected in their first-quarter results to be published soon. Moreover, the cost-to-revenue ratio is reported to be showing serious deterioration, approaching 70 percent. Banks are also subject to the 2-percent limit in dismissals every six months. Faced with such problems, employers, particularly the National Bank – which is the biggest – have adopted a hard stance in the negotiations with OTOE. Officials at EFG Eurobank, which has adopted an equally hard stance, take the view that there is no excess of personnel, given the present level of technology in the banking sector. However, OTOE’s resistance to an extension in working hours limits the potential for increasing the profitability of many branches. Banks have proposed an increase in opening hours of five and a half hours weekly for branches, along with a reduction in working time by 50 minutes (10 minutes daily). According to their estimates, the 50-minute reduction will add 2.25 percent to operating costs. Banks estimate the cumulative increase in operating costs could be as much as 7.35 percent. This, along with the 2-percent increase they have proposed in pay raises, includes the costs of the reduction in working time and an expected 1 to 1.5 percent increase in the new employee contracts they will have to sign.
