The banking crisis that began showing its teeth in 2012, starting with the resolution of the now-defunct Laiki Bank, brought voluntary exit schemes into sharp focus.

The reason was clear: supervisory authorities demanded, among other measures, a drastic reduction in staff numbers at major financial institutions to cut operating and labour costs.

Since then, numerous voluntary exit plans have been implemented — at the former Laiki Bank, the defunct Co-operative Bank, Hellenic Bank, AstroBank, Alpha Bank, and most notably, the Bank of Cyprus.

With Eurobank’s acquisition of Hellenic Bank and their forthcoming full merger — including integration of personnel — staff reductions appear inevitable.

Eurobank’s CEO Michalis Louis, in recent statements, did not rule out the possibility; in fact, he described it as “an unavoidable necessity.”

According to data collected by Brief, as of 31 December 2012, the total number of banking employees in Cyprus stood at 9,500. This figure did not include employees of Eurobank, Société Générale, or Ancoria at the time, as they were not members of the Employers’ Association of Banks.

Today, without counting those who will leave under the Bank of Cyprus’s newly announced voluntary exit plan — or those expected to depart under a similar scheme at the National Bank of Greece (Cyprus) — the number of banking employees is estimated at approximately 6,500.

Compared to December 2012, this represents a 31% reduction in the number of banking employees.

It is also noted that supervisory authorities in Frankfurt impose on all financial institutions a minimum staffing level based on their size and operational needs.

The Bank of Cyprus yesterday announced another voluntary exit scheme targeting a limited number of employees. The Group aims for around 50 to 70 staff to leave under the plan.

>>Bank of Cyprus Launches Voluntary Exit Plan – Compensation Up to €200,000<<

In an internal announcement posted on the staff portal, the Bank’s top management explained that the decision stems from the ongoing digital and business transformation, automation of operational processes, and the significant reduction of non-performing loans.

The scheme is open to all permanent staff of the Group, with priority given to departments or regions most affected by current and future strategic changes. Eligible employees must have at least five years of service within the organisation.

The Cyprus Bank Employees’ Union (ETYK) expressed its opposition to the plan in a circular sent to all members, accompanied by a formal letter to the Bank.

The union argued that under current conditions, there is “no substantive reason to offer such a plan, especially when the Bank is recording strong profitability and steady progress.”

ETYK also claimed that the Bank of Cyprus is understaffed, with hundreds of external contractors employed across various departments.

In addition to demanding an increase in the maximum compensation amount, the union insists on the preservation of medical, health, and life insurance coverage for at least five years after departure.

It stressed that the scheme must remain strictly voluntary, noting that “any threat or coercion by management representatives is unacceptable and unlawful.”

A similar voluntary exit scheme has also been circulated by the National Bank of Greece (Cyprus), prompting a similar negative reaction from ETYK.

In both letters — to the Bank of Cyprus and the National Bank — ETYK demands that the maximum tax-free compensation amount be set at €250,000.