Hellenic Bank has developed and is distributing today a voluntary exit scheme to its employees as part of the group’s business plan and a key step toward the full Eurobank-Hellenic Bank merger.

According to Brief sources, verified by both bank and union officials, the voluntary scheme is open to all employees of Hellenic Bank, as well as staff working in the insurance companies under the group’s umbrella.

Eligible employees opting into the scheme can receive a maximum compensation of up to €200,000. Hellenic Bank has also secured an official confirmation from the Tax Commissioner that the lump sum compensation for employees who voluntarily leave under this scheme will be tax-exempt.

The provision of voluntary exit payments to banking employees is a well-established practice, primarily aimed at preventing disruptions to the Redundant Personnel Fund, given the high costs associated with voluntary departures in the banking sector.

Each employee’s compensation package will vary, taking into account their current salary, years of service, and job responsibilities.

With the plan now published in detail, Hellenic Bank employees are free to assess the management's offer based on their personal circumstances and needs.

The introduction of a voluntary exit plan at Hellenic Bank was anticipated and deemed necessary, as mergers between banks typically result in redundant personnel.

As of today, the combined workforce of Hellenic Bank and Eurobank Cyprus stands at:

• Hellenic Bank: 2,275 employees

• Eurobank Cyprus: 470 employees

• Total post-merger: 2,675 employees

Supervisory authorities in Frankfurt and the Central Bank of Cyprus have repeatedly raised concerns about the excessive number of employees in domestic banks.

Labor costs in Cyprus' banking sector remain among the highest in the Eurozone, compared to equivalent financial institutions in other member states.

Sources familiar with the voluntary exit process told Brief that Eurobank Group had signaled its intention to implement such a scheme at Hellenic Bank and never opposed the plan.

They described the scheme as generous, emphasizing that it allows employees to exit with dignity while receiving a substantial tax-free lump sum.

So far, no official target has been set for the number of employees expected to leave under the scheme. However, leaked information suggests the bank aims for 250 to 400 voluntary departures.

Last Monday, Brief revealed that Eurobank had already finalized transactions to acquire the shares held in Hellenic Bank by Demetra Investment and Logicom. With the completion of legal and regulatory approvals, the Greek banking group now holds 93.47% of Hellenic Bank’s total share capital. This means that Eurobank will spearhead the next phases of the merger, which is expected to be completed by late 2025.

Once the required six-month period has elapsed, Eurobank is expected to submit a public offer to acquire the remaining 7% of Hellenic Bank’s shares. Shareholders holding this remaining stake will have the option to sell their shares at €4.88 per share, the same price offered to Demetra Investment and ETYK. If the minority shareholders decline to sell, Eurobank will proceed with a squeeze-out process, allowing it to acquire 100% of Hellenic Bank's share capital.

Following the squeeze-out, the legal merger will take place, consolidating the two banks into a single entity under the name Eurobank Cyprus. The final step will be the operational merger, integrating the banks’ IT systems and workforces to create a unified structure.