Hellenic Bank to cut 200 jobs with retirement scheme (Update-1)

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(Updates with additional comment in third paragraph)

By Stelios Orphanides

Hellenic Bank, Cyprus’s third largest lender, is offering its workers a voluntary retirement scheme in an attempt to cut cost which could have an up to €40m short-term impact on profitability, a spokesperson said.

The scheme aims at reducing the number of the bank’s workers by 200, the spokesman said in a telephone interview on Monday. The compensation package depends on a worker’s salary, number of years in service and age, with a €200,000 cap per beneficiary. The spokesman said that the scheme aims at facilitating the exit of workers aged 50 and above.

Hellenic Bank workers who were transferred to APS Debt Servicing Ltd, as part of its agreement with the Prague-based APS Holdings, will also be eligible to participate in the scheme, the spokesperson said. The impact on the bank’s profitability is likely to be considerably below maximum amount.

The lender, which posted a €62.7m loss after tax in 2016, is struggling with a €2.4bn mountain of non-performing loans, more than half of its entire loan portfolio. Last year, the number of its employees rose to 1,646 from 1,555 in 2015 and 1,423 in 2014. Staff cost rose last year to €82m from €80m in 2015, and €75.3m in 2014.

Bank workers’ union Etyk, notorious for its aggressive rhetoric, said in a statement on its website on Monday that it had already been notified by Hellenic about the content of the retirement scheme and received assurances that it will apply on a voluntary basis.

The union also warned Hellenic not to try to pressure any of its staff to apply for the scheme.

The bank’s spokesman said that Etyk already gave its approval to the scheme.

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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • almostbroke

    As I said before a Union never created one job ever , only what jobs were lost with their billigerent antics and the bank unions are leaders in this ! Even with the bank ‘losing ‘ money the unions are still dictating policy , beggars belief !!!!!!!

    • Philippos

      The Unions Strength comes from the need to employ people. That need seems to be going away, even in Cyprus. We might get to the point where the employees get to leave the union because they will see the reality too. Now that would be progress.

      • disqus_ZPlOdQqScB

        Long for the day

  • kimberworth

    I am surprised anyone use the so called big 3 banks here for savings considering the state they are in with non performing loans they have on their books.

  • Mist

    Tip to the staff, take the money, don’t open the box, it may be the booby prize, statutory redundancy payments.

  • Philippos

    The increase in staff since 2014 is a symptom of loss of focus by its management, so stand by for other rotten news across the whole of this Banks Businesses.

  • Sergio Ramos

    Dear journalist. Where did you get the number of 40m euro? Not everybody will get 200k. Do the maths!

    • Kevin Ingham

      It does say “could have”

      What the bill will actually be is of course still to be determined, but I can’t see people who would benefit least from voluntary redundancy taking up a much smaller package.

      It however could very well be that it will be senior staff approaching retirement age that will take up the offer? If you are a couple of years from retirement and safe in the knowledge you are going to get your pension either way, the offer might equate to Euro 100,000 pa annum for doing nothing, as opposed to working 2 years for considerably less each year? In effect it would an extremely attractive golden handshake

      It is of course an utter nonsense that the number of employees have gone up in the last few years whilst the bank has achieved virtually nothing by way of debt restructuring

  • disqus_ZPlOdQqScB

    How did amount of employees last year rise? 200 is too small! Only way out is to foreclose properly and quickly-will only happen after elections.

  • Bob Ellis

    Not bad for a bank that should have closed in 2013.