The improved terms of the voluntary retirement scheme Bank of Cyprus offered its workers, managed to attract a marginally higher number of employees compared to a previous version of the scheme that expired on February 26 but it still only one third of the bank’s target, a source said.
The scheme, which aimed at reducing the bank’s staff by 250, attracted only 75 workers, a source familiar with the matter who spoke on condition of anonymity said. By comparison, the previous version of the scheme convinced less than 70.
The Cyprus Business Mail understands that the bank’s board of directors which is scheduled to meet next week is expected to evaluate the situation following the failure of the improved offer before taking a decision on how to reduce the bank’s payroll, which was €234m last year and in 2014, or roughly less than a quarter of its 2015 total income. Bank of Cyprus, the country’s largest lender, currently employs in Cyprus more than 4,100 workers.
“The next day finds the bank as the chief executive officer described it in his circular,” the source said.
John Hourican, who heads the bank since late 2013 and agreed in November to extend his contract for two more years after submitting his resignation in April 2015, said in his circular that the bank will go ahead based on the organisational structure it needs.
Bank of Cyprus improved the previous version of its voluntary retirement scheme by agreeing to maintain interest rates for outstanding loans of workers who agreed to make use of the scheme, and allow them to keep their life insurance policies. In addition, retirees could continue benefiting from the healthcare scheme of bank workers’ union ETYK for another ten years.
The Bank of Cyprus source said that interest in the scheme was evenly distributed across all categories, pay scales, ages and genders of its staff.
According to the terms of the scheme, workers were entitled to receive 50 per cent of their monthly salary for every year they served at the bank, provided they worked there for less than 15 years. Compensation would increase to 75 per cent of the monthly salary for every year of service for the next 15 years of service and to 125 per cent for every year of service for those of over 30 years at Bank of Cyprus with a €200,000 cap, or up to 70 per cent of the otherwise remaining earnings until retirement.