Bank of Cyprus will reduce its staff by 11 percent under a voluntary early retirement scheme, the Cypriot lender said in a statement on Thursday.
The bank has already approved 470 applications by employees who have more than five years in service and were due to retire in 2020 and beyond, said the statement.
The scheme aims to reduce operating costs, though it would initially cost the bank 79 million euros to pay compensation to those who opted out.
“Following the completion of this voluntary staff exit plan, the number of employees is reduced by 11 percent, with an estimated annual saving of 28 million euros or 13 percent of staff costs,” the bank said.
Bank of Cyprus is one of the two systemic banks of the eastern Mediterranean island and was recapitalized by bail-in in 2013, as part of Cyprus’s bailout by the Eurogroup and the International Monetary Fund.
The bank’s statement said staff who met the criteria to retire early were offered compensation based on their years of service.
The maximum amount, which will be tax-free, could not exceed 70 percent of their remaining salaries until normal retirement, or 200,000 euros.
Departing staff, will also enjoy medical coverage for two years, which will also apply to their dependents.