Santander plans large lay offs

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Santander plans large lay offs
STRUGGLING TO LIFT EARNINGS: Banco Santander Photo credit Twitter

BANCO SANTANDER plans to lay off more than 1,500 employees due to the integration of Banco Popular, which it acquired in June after EU authorities ordered its rescue, the Comisiones Obreras union said on Wednesday.

Santander, which took on more than 11,000 employees from Banco Popular, is expected to cut staff at both lenders’ corporate centres to lower costs, its chief executive Jose Antonio Alvarez said in October.

Comisiones Obreras wants the bank to find jobs for 575 of the employees at the company’s other units.

When Santander acquired Banco Popular, it said it expected restructuring costs of around €1.3 billion related to the deal.

In its third-quarter results last month, Santander took a €300 million hit due to one-off restructuring costs but said it was not expecting further charges this year.

Much like its competitors, Banco Santander is struggling to lift earnings from loans in Spain as interest rates hover at historic lows, while increasing competition consumes margins.

As a result, Spanish banks have been cutting costs, including through branch closures, since the 2012 financial crisis which ate into earnings and pushed some into state bailouts.

Their profits have since recovered, but Spain still has the highest number of branches per person of any country in the European Union, according to recent data from the Bank of Spain.

Spain had 62 branches per 100,000 adults at the end of June 2017, data from the Bank of Spain showed.

Santander and Popular employ around 7,000 staff at its corporate centres in Madrid.

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