Lenders are merging branches, renegotiating rental contracts, limiting labor costs and reviewing all operating expenses from square one in a bid to lower spending. Industry sources describe the right cost management as being a «key point for 2011.» In the Greek market, banks are aggressively renegotiating the cost of rental space, changing offices and shutting down branches when rental expenses are deemed to be excessive. Regarding labor expenses, lenders are seeking to move around staff members, depending on where there are greater operating needs. While layoffs are not being examined at the moment, banks are however trimming expenses stemming from the payroll by not replacing employees that leave and by offering incentives for workers to leave of their own accord. However, if economic conditions don’t start improving in the second half of this year, then certain banks re-examine the issue. More drastic action is being taken in regard to general expenses, including promotional costs for products and spending on producing new products and services. Concerning Greek banking operations beyond the country’s borders, there is greater flexibility in cutting expenses as markets abroad start to rebound. Banks are cutting back on foreign branches and staff levels abroad where they consider there is fat to be trimmed. But the general rule being followed is that lenders want to hold on to capacities in markets outside of Greece. In some markets which are experiencing a rebound, Greek banks are moving ahead with investments. In the first nine months of the year, Greece’s largest lender, National, said that it is boosting spending on growth in Turkey, via its subsidiary Finansbank, while costs back at home are being reduced by 3 percent.