The bank closed a few days ago an intense first half of the year that has been characterized by cuts in staff and offices. Those already announced in the last weeks of last year (Santander, Ibercaja and Sabadell), were joined by two other large processes (BBVA and CaixaBank). The last of them has been closed just a few days ago, after several marathon days and two strikes by the staff. Although in order for these processes to have the desired effect on banks, saving costs, they will first have to assume a millionaire bill, both for the severance indemnities and the cost of office closings.
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The data provided by the financial institutions themselves would add up to a total cost of these ERE – leaving out that of Sabadell, which was not a typical collective redundancy – that exceeds 4,100 million euros. That is why, despite the fact that what is sought is to reduce costs to improve profitability, some of the entities will take even more than three years to amortize the expense, which in the case of Santander and Ibercaja, was already registered in the Results for 2020 and in BBVA and CaixaBank will appear in those of the second quarter of this year, which will be known in the coming weeks.
In total, the banking sector has agreed with the unions 15,489 layoffs that have begun to take place since the beginning of the year and that will last until the end of 2021. It is the highest figure since 2013 and the second highest since, after the last financial crisis, the disappearance of dozens of financial entities began. With this, since 2008, 120,000 jobs have been destroyed in the Spanish banking sector. With this, it is foreseeable that at the end of this year Spain will have become the European country that has laid off the most workers since the collapse of the international financial system in 2008, surpassing Germany.
Four out of every ten layoffs that will take place this year will be at CaixaBank, which after the absorption of Bankia has carried out the largest ERE in the history of Spanish banking. And that despite the fact that finally the figure was significantly lower than that initially raised. CaixaBank will lay off 6,432 workers in the coming months, compared to the almost 8,300 it initially announced. This adjustment comes two years after the previous one made by the entity and months after having absorbed the rescued bank Bankia, giving entry to the State to its shareholders and its board of directors. This process was not easy and, after a month of formal negotiation period, the talks with the unions had to be extended for almost another month, given the complex agreement. Even during the last days there were several night meetings in order to unblock the situation.
Due to the large figures for the job and office cuts, CaixaBank will assume almost half the cost of the bank EREs this year. The cost will be 1,900 million euros, according to CaixaBank in a statement to the National Securities Market Commission (CNMV). With this operation, the new CaixaBank aims to achieve 770 million euros in annual savings, the objective set during the absorption of Bankia. With this, it will be almost two and a half years until the cost is amortized.
The next largest expense in the banking sector has been that of Banco Santander. The group chaired by Ana Botín agreed to an ERE in the last weeks of last year that affects 3,572 employees and the relocation of 1,500 workers in other group companies. Initially, the figure was 4,000 workers laid off. This process is practically completed and departures have been taking place throughout this year. In this case, Banco Santander did not make a communication to the CNMV reporting the cost, although in its 2020 accounts it did reflect an estimate that gives an idea of the expense. Specifically, he assured that he had restructuring costs, “mainly in Spain”, which subtracted 1,114 million from profit.
It should be remembered that both Santander, after having absorbed the collapsed Popular, and CaixaBank came from making separate EREs just two years ago, in 2019. Then both already added a cost of 1,500 million euros to lay off more than 5,200 workers and close more 2,300 branches throughout Spain.
This year has brought with it the first ERE in the history of BBVA, which until now had opted for the departure of thousands of workers through incentivized leave negotiated individually. After a month of negotiations and two strikes at the bank, in addition to some partial work stoppages, the bank and the unions agreed that there would be 2,935 layoffs, compared to the 3,800 initially raised by the entity chaired by Carlos Torres. BBVA will spend 960 million euros, of which 720 million correspond to dismissals and the rest to the closure of branches. With this, it hopes to obtain 65 million euros of savings and from next year 250 million per year, as reported to the CNMV. Again, it will take several years to amortize this expense, which will not be reached until 2024.
The least mediatic of the ERE has been the one made by Ibercaja. The Aragonese entity agreed with the unions a collective dismissal that has affected 750 employees. In this case, the cost has been around 151 million euros, as reported by the bank in the presentation of results for 2020. The case of Sabadell, which agreed to leave 1,800 older employees, was not a collective dismissal in strict sense and a cost of the process was not transferred. Throughout this summer, the merger of Unicaja and Liberbank is expected to be concluded, which is expected to end in another collective dismissal, although concrete figures for the possible cut have not been advanced.
3,200 office closures
The more than 4,100 million in which the cost of the banking ERE is estimated include not only the dismissal of more than 15,000 workers but also the closure of thousands of offices. Spain is the country that has closed the most bank branches since the last crisis, with more than 23,000. That figure will increase widely during this fiscal year. With the EREs announced that are being executed during this course (Santander, BBVA, CaixaBank and Ibercaja), there will be, for now, more than 3,240 office closings, to which will be added the usual closure that practically all financial entities are executing, with or without ERE in between.
With this, 2021 will remain as the year with the most layoffs since 2013, but also with the most office closures. That year, just after the collapse of the savings banks that ended in the millionaire rescue with public money and the disappearance of dozens of entities, caused the closure of 4,429 branches. The course after the outbreak of the pandemic is leaving office and staff cuts figures as they had not seen since the last financial crisis. Only with the cuts that are being made in these months, the number of closed branches has more than doubled compared to last year.
When the sector is still directing these massive layoffs and large office closures, at a billionaire cost for Spanish banks in search of profitability, the process will not be closed this year. In addition to what happens in Unicaja, there are entities that have already warned that at the end of 2021 or the beginning of 2022 they will undertake new cuts. This is the case of Sabadell, which in its strategic plan includes more cost adjustments that, foreseeably, will affect the branches and the number of employees.