BANK of Cyprus (BoC) will close 12 more branches by early August, raising the number of shutdowns to 29, it emerged on Tuesday.
The lender had closed 17 branches by July 5, as part of its drive to cut operating costs following a Eurogroup decision that decimated the island’s banking sector.
Staff from the branches that were closed were transferred elsewhere, depending on needs, the Cyprus News Agency said. The agency reported that BoC would be closing a further 20 branches after August 2.
The final figure will depend on the bank’s restructuring plan, expected to be ready by the end of September. To receive a much needed bailout, Cyprus had to agree to close its second-biggest bank, Laiki, and recapitalise BoC by seizing uninsured deposits – over €100,000.
All three Cypriot banks were also forced to sell their Greek operations. The deal provided that BoC, currently in administration, would absorb certain Laiki assets, and its employees.
As a result it currently operates 202 branches in Cyprus and employs 5, 640 employees – 85 branches and 2,390 employees were transferred from Laiki. On Monday it introduced a voluntary retirement scheme, which aims to cut staff by 1,000 plus.
The employee union has rejected the scheme, warning that it will fail. BoC said it was a generous offer and urged staff to take advantage or possibly face being made redundant later on, under worse terms.
The Eurogroup decision in March also saw the introduction of capital controls, that are still in place, to prevent bank runs. These however are damaging the island’s economy, which is not expected to achieve the targets forecasted by the €10 billion bailout programme.
Cyprus has so far received €3.0 billion and a decision on the disbursement of the second tranche will be taken by the Eurogroup mid-September.