The total cost of the implementation of the scheme is expected to reach approximately €99 million.

Moreover, according to the announcement, the scheme’s implementation cost will be reflected in the bank’s upcoming quarterly financial results.

The voluntary retirement scheme is part of the group’s strategy to further improve its efficiency through the reduction of both the number of its branches and employees.

After the scheme has been concluded, the total number of staff is expected to fall by approximately 16%.

This will save the bank around €37 million on annual basis, an amount which corresponds to about 19% of its staffing costs.

This follows additional reductions to the bank’s branch network, with 20 branches having shut down since the beginning of the year, reflecting a 25% reduction.

“Through these two successful actions, the Group has managed to meet its goal of reducing staff by 15% and the number of stores by 25% by the end of 2022, which is earlier than expected,” the bank’s statement explained.

“Including the most recent voluntary retirement scheme, since June 2019, the Group has reduced the number of staff by more than 1,300 people, a reduction of approximately 30%, and the size of its branch network by 37 stores, a reduction of approximately 40%,” the statement added.

In addition, the bank stated that the successful adoption of the scheme is seen by the bank as a milestone in its efforts to better improve the group’s profitability.

“The successful completion of our recent voluntary redundancy scheme means that we are achieving our objective of streamlining our operating model earlier than planned, which is key to improving our operational efficiency, the sustainability of our business model and achieving our medium-term goals,” Bank of Cyprus CEO Panicos Nicolaou said.

The voluntary retirement scheme was originally announced on 4 July 2022, with the bank having stated at the time that it sought to reduce its staff by between 500 and 600 employees.

On July 19, the bank decided to extend the deadline for applications for a few more days to allow more of its employees to formally declare their interest.

Bank of Cyprus workers that applied for the exit scheme will receive a compensation package, which is determined by years of service and current salary, as high as €200,000 tax-free.

A total of 2,633 workers have left the Bank of Cyprus through voluntary retirement schemes since 2013, on the same compensation packages being offered at present.

The bank’s management, however, has said the latest scheme would be the last that would be of a voluntary nature and with generous compensation packages.

Source: Cyprus Mail