Hellenic Bank is preparing to launch a new voluntary early retirement scheme aimed at reducing its workforce by a substantial number of employees, with completion targeted by the end of 2025, it emerged on Tuesday.

According to reports, which have been backed up by sources who spoke to the Cyprus Mail, the scheme will offer compensation capped at €200,000.

The exact figure will be determined by various parameters, such as annual salary, years of service, and employee age.

While the bank has not confirmed the exact number of targeted departures, sources suggest the goal is to facilitate the exit of approximately 500 members of staff.

This follows a similar scheme in 2022, which saw the departure of 450 employees, representing 17 per cent of the bank’s workforce at the time.

According to Hellenic Bank, the primary factor for the reduction in personnel expenses was the decrease in staff numbers following the voluntary early exit scheme implemented in the fourth quarter of 2022.

The 2022 scheme resulted in a 16 per cent drop in payroll costs, with expenses falling to €118.2 million in 2023 from €140.3 million in 2022.

This reduction lowered payroll expenses as a percentage of total operating costs from 50 per cent to 46 per cent.

However, Hellenic Bank’s financial results for the first nine months of 2024 show personnel expenses rose by 11 per cent year-on-year, reaching €99.4 million.

This increase was attributed to salary raises, higher cost-of-living allowances (CoLA), and employer contributions under the collective agreement.

As of September 30, 2024, the bank employed 2,274 people, up slightly from 2,256 at the end of 2023.

Of these, 2,227 were permanent staff and 47 temporary, compared to 2,200 permanent and 56 temporary staff at the end of the previous year.

Hellenic Bank noted the provision for wage increases as part of the upcoming renewal of its collective agreement with the bank employees’ union Etyk.