Cyprus Mail
Cyprus

Stung depositors will not foot bank lay-off bill, union pledges

By George Psyllides

BANK employee union ETYK on Monday rejected suggestions that any extra compensation paid to Bank of Cyprus (BoC) staff retiring early would burden depositors, as efforts went on late into the night to reach agreement on a plan to convince some 1,000 staff to leave.

ETYK charged there was an orchestrated attack against BoC employees, with the objective of misleading the public into thinking that stricken depositors would foot the bill for any extra compensation to staff taking early retirement.

The union said any extra cost would be paid by the remaining workers through the pay cuts that reached 30 per cent.

“A small part of those reductions was given to cover any extra salaries granted to those who chose the (retirement) plan,” ETYK said in a statement.

It said that BoC representatives also agreed “thus no one is saddled with any extra cost.”

Earlier yesterday, BoC interim chairman said they will consider the plan a success if around 1,000 opted to leave.

Sophocles Michaelides said the management could not legally dismiss any people at the moment because it did not have a reorganisation plan in place.

That plan will be drafted in the coming months, he said.

The BoC board was meeting with ETYK late yesterday for a final discussion of the matter.

The board will convene again today to select the plan and present it to workers, after it is approved by the Central Bank.

BoC aims to shed 1,000 plus staff immediately and maybe around 1,000 more by the end of the year.

“We want employees to judge for themselves and opt for the plan we offer,” Michaelides said. “This way, they will make it easier for us to reorganise the bank in the next months and maybe it will later transpire that layoffs will not be necessary.”

Finance Minister Harris Georgiades said the decision was long overdue.

“There must not be any other delay,” he said, adding that any compensation scheme must not lead to a need to increase the lender’s capital as that could only come from depositors.

Depositors have already warned they will not accept footing the bill of additional compensation to departing employees.

To receive a much needed bailout, Cyprus had to agree to close its second-biggest bank, Laiki, and recapitalise BoC by raiding uninsured deposits – over €100,000.

The deal provided that BoC, currently in administration, would absorb certain Laiki assets and its employees.

Following the March 25 decision, BoC has acquired the insured deposits and the majority of Laiki’s assets and loans.

As a result it currently operates in Cyprus through 202 branches and with 5, 640 employees – 85 branches and 2,390 employees were transferred from Laiki.

 

 



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