Bancpost, the eighth-largest local bank judging by the value of the assets held at the end of last year, is going through an extensive restructuring programme in order to cut costs, which includes personnel cutbacks, branch closures and changes of salary packages, after having posted negative financial results in the last quarters.
The bank’s employees were requested to take five days off without pay until the end of the year and some of them were asked to sign fixed-term employment contracts, instead of the indefinite term contracts, sources on the market say.
Several managers were demoted, thus losing some of the perks in their salary packages and the targets to be achieved in order to get bonuses were raised a great deal.
Bancpost, however, is not the only player to have resorted to such steps: this spring ING invited its employees to take two weeks off without pay; Credit Europe Bank is applying such plans, as well.
“Unpaid holiday is already in place at Bancpost, from chairman to the last employee. Officially, this is an ‘optimisation’ programme,” banking sources say, adding that other cost-cutting steps are being considered, too.
Bancpost officials could not be reached on Tuesday for comment on this information.
The streamlining plan was developed in June, following the financial results of Bancpost, as requested by the Greek shareholders – the EFG Eurobank group, which directly supervises its implementation.
“The bank has made 700 employees redundant both in Bucharest and in the rest of the country, since March. Most of them were fixed-term employees, whose contracts were not renewed or were close to the retirement age,” says a Bancpost manager who chose to remain anonymous.
According to data published by the bank, the number of retail branches has gone down by five since March, reaching 287 and two of the 19 centres for corporate clients have been closed. Sources say 10 to 15 more unprofitable branches have been identified and will have to be closed.
Banca Transilvania, another top ten player, has also closed down 11 unprofitable branches in the first half and made 431 employees redundant, after profit dropped to less than one tenth, as a result of the pressure to increase provision-related spending. BCR, the largest local financial group resorted to personnel cutbacks in the first half, as well, because provisions bit into its profit.