Banking sector faces industrial action

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The banking sector is in choppy waters after employees backed their union to strike over Hellenic Bank’s intention to make 350 staff redundant, while Bank of Cyprus is also cutting branches.

The decision was taken by a 99.5% majority vote, following bank staff union ETYK’s regional general assemblies. Just 28 out of 5,715 cast a ‘no’, with another three abstaining.

ETYK said in a statement: “The result demonstrates the high sense of responsibility, solidarity, unity and determination among all our members to fight in any way, to protect their jobs and their rights”.

The bank employees union said it was “forced to take strike measures by Hellenic Bank’s management’s stance”.

It called on Hellenic’s management to reconsider avoiding industrial action.

Hellenic, Cyprus’ second-largest commercial bank, officially informed unions of their intentions to reduce their staff by 300-350 to slash operating costs earlier this month.

The bank informed unions it is determined to go ahead with its new business plan, letting 350 staff go without compensation.

Unlike previous voluntary exit schemes rolled out by Hellenic and its main rival Bank of Cyprus.

Hellenic CEO Oliver Gatzke announced redundancy plans in the bank’s annual report for 2021.

He had then warned the redundancy process was inevitable unless a collective agreement considered the bank’s revenue, expense ratio and the percentage of wage claims.

Gatzke argued the bank should gradually get rid of “outdated”, as he characterised it, the practice of horizontal promotion and compensation schemes.

He ruled out the possibility of compensation of around €200,000 to each employee who decides to press the exit button, as was the practice in previous schemes.

Hellenic Bank is turning its attention to the transformation plan, highlighting the reduction of the high cost/return ratio as key.

Last year, the bank recorded losses of €11.7 mln but will be offloading €1.3 bln in toxic loans.

Bank of Cyprus

Meanwhile, on Thursday, the Bank of Cyprus also announced plans to reduce its staff by 15% by letting 500 employees go.

However, unlike Hellenic, BoC has said the process would be done through a voluntary exit plan, hinting that HB should follow the same path to avoid confrontation with employees.

Presenting the bank’s results for the first quarter of 2022, BoC said it would be reducing its 3,395 staff by 509 employees while closing 25% of its branches.

During the financial results presentation, Bank of Cyprus’ CEO, Panicos Nicolaou, said that BoC “has unlimited respect for its staff and before any decision is made, it must be discussed first”.

He said the bank’s structure would be changing, as management has done its homework on the new company shape.

Nicolaou said the Bank of Cyprus has so far reduced its workforce only after compensating staff through an exit scheme.