Struggling With Bad Loans, Greek Banks Will Cut 4,000 Staff

A branch of the National Bank of Greece, Athens, Greece. (Photo: Eurokinissi/Giannis Panagopoulos)

ATHENS – As Greek banks move swiftly to shed a mountain of bad loans, many sold off to vulture collectors, which Prime Minister and Radical Left SYRIZA leader Alexis Tsipras  had said he wouldn’t allow, they are also planning to reduce their workforce by some 4,000.

With branches closing, causing lines up to two hours in others that remain open, the banks are getting rid of workers as fast as they can as the institutions to continue to downsize during a more than nine-year long economic and austerity crisis.

The bad loans – mortgages, credit cards, personal and business loans – make up some 40 percent of the portfolio of the country’s four biggest banks who are struggling despite having received a 50-billion euro ($56.16 billion) bailout from the 326 billion euros ($366.14 billion) Greece got from international creditors in three rescue packages.

With more people moving to online banking, despite the propensity of Greeks to prefer standing in line to pay bills and do their banking, banks are needing fewer staff or loan managers to handle customers who’ve moved to using their computers and phones.

The total assets of the four banks was some 225 billion euros ($252.7 billion) by the end of 2018 but are expected to fall by about 50 billion euros ($56.16 billion), the target of the expected bad loans reduction, said Kathimerini.

From 2008, two years before the crisis began and when the banks had 66,000 workers, thee are now some 39,380, a drop of more than 40 percent and with branches still open.

The number of branches shrank by over 51 percent in a decade, from 4,097 in 2008 to 1,979 in 2018 as they move away from brick-and-mortar locations to online, encouraging customers to do the same and to use online transactions instead of cash.

The National Bank of Greece is due this week to present its transformation plan, including cutting staff by 2000 this year, the paper had also reported.