Amid protest by bank employees’ union ETYK, the Co-operative Central Bank (CCB) this week unveiled an early-exit proposal, which aims to reduce its 2,750 staff by 100 by the end of this year.
The CCB, which oversees a network of 18 members, or co-operative credit institutions, across Cyprus, became 99-per-cent state owned in 2013, after the government injected €1.5 billion of bailout money in order to save the failing organisation. The bailout was given on condition that the co-op is restructured so that it returns to profitability before the government sells off at least three-quarters of its stake.
As part of implementing the restructuring plan, the first voluntary-exit plan offered by the CCB in April 2014 saw some 300 employees depart.
Last December, an additional €175 million in capital was injected by the state, following a stress-test conducted by the European Central Bank’s Single Supervisory Mechanism.
So far, the CCB’s adherence to the plan has paid off, with the group announcing a €60-million profit in Q4 2015, and €28 million in Q1 2016.
Still, the restructuring plan calls for the scrapping of 100 jobs by the end of the year, and management presented staff with the terms of a voluntary exit plan on Monday, which will remain open until September 15.
ETYK, which boasts roughly one in three CCB employees, responded with a circular to its members, in which it criticised management’s decision to ignore its proposals.
“We expressed our views [to management] with regard to the content of such a plan, taking into account the age distribution, staff payroll, and circumstances in the broader environment (we proposed that the compensation be similar to the latest plan proposed by the Bank of Cyprus or Alpha Bank), in order to make it attractive to a large number of colleagues and exceed the target set by the bank,” ETYK said.
“Unfortunately, the bank did not adopt our recommendations with regard to compensation levels, and opted to stick to the compensation offered under the previous plan (2014), along with some improvements (continued medical coverage and life insurance for three years after exiting, payment of all vacation days not taken, and so on).”
According to local daily Phileleftheros the voluntary-exit schemes offered by the Bank of Cyprus and Alpha Bank placed the compensation cap at €200,000, while the CCB capped compensation at €105,325.
But despite the plan’s shortcomings, the union said, each employee was urged to make the decision on a personal basis.
“Although our organisation considers the compensation levels not satisfactory, because the plan is voluntary, each colleague can evaluate the bank’s offer and judge whether it serves his or her personal circumstances, and decide accordingly, without pressure,” ETYK said.