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Spain’s struggling Banco Popular said Monday it has slashed over 2,600 jobs, about 18 percent of its workforce, in the latest round of cost cutting by a Spanish lender.
The restructuring of its workforce through voluntary departures, first announced in September, will cost 375 million euros ($397 million), the Madrid-based bank said in a statement.
Banco Popular said its offer of early retirement had been accepted by 2,637 employees, roughly 90 percent of them in Spain.
The lender had 14,848 employees at the end of September and the staff cuts are expected to save the bank between 175 million euros and 200 million euros per year, the statement said.
“This agreement aims to improve profitability and efficiency,” the statement added.
Banco Popular, Spain’s sixth largest bank by market capitalisation, in June raised 2.5 billion euros in a share issue to clean up its balance sheet.
Like other Spanish lenders, it is making a major push to sell off real estate assets, including repossessed homes, which are clogging up its balance sheet and eating into earnings.
Banco Popular in October reported a third quarter net profit of just 416,000 euros. It made provisions on bad loans earlier this year of 4.7 billion euros.
Spanish banks, which slimmed down after a decade-long property boom went bust in 2008, are once again closing branches and slashing jobs as their profitability is hit by stiff competition.
Santander, Spain’s biggest bank, announced earlier this year it plans to close 450 smaller branches and cut 1,400 jobs in Spain, about five percent of the staff in its home market, through voluntary departures.
Barcelona-based CaixaBank, Spain’s third-largest bank, plans to cut 3,000 jobs, mainly through early retirement, as it seeks to trim its salary costs.
Spain has the densest bank branch network in western Europe, with 8.6 branches per 10,000 residents, according to consultancy Roland Berger.
The average in the entire European Union is five branches per 10,000 residents.