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The consolidation of the banking sector will inevitably lead to drastic staff cuts. Now, the total number of employees in the sector is about 56,000 nationwide. After a series of bank mergers and acquisitions, the number of employees in the banking sector is expected to fall to 20,000 by 2015. Currently, the National Bank of Greece, together with Eurobank, Alpha bank and Emporiki, as well as Piraeus-ATEbank-Geniki, have a total 2,500 agencies.

The legal issues, related to the consolidation of banks, are expected to be finished by the beginning of 2013. Then, about 450 agencies are expected to close, since they will be unnecessary for the new merged institutions. According to Ethnos newspaper, about 40% of bank branches overlap mainly in the urban centres. This means that 4,500 to 5,000 people will be made redundant as early as next year.

Sources from the banking circles insist that the lay-offs will come mainly from reducing managerial and executive staff. Incentives for early retirement or voluntary redundancy will be created for a period of three years in order to ease the processes of staff cuts.

The reduction of operating costs forced banks to start closing branches as early as the beginning of the crisis. In 2009, bank branches across the country exceeded 4,200. In 2011 they were reduced to 3,500 and in the next two years, they are expected to be reduced by one-third. "Unfortunately, some lay-offs have to happen, but they will not be massive," admitted earlier this year the head of the Hellenic Financial Stability Fund Takis Tomopoulos.

So far, the consolidation plan provides for the merger of seven of the largest banks in Greece and thus for three large financial institutions to be created. The total benefit for the new schemes of the National Bank of Greece with Eurobank, Alpha bank and Emporiki, as well as Piraeus-ATEbank-Geniki, will bring mutual benefits of one billion euro starting from 2015. The second round of mergers is expected to begin early next year. Then, the Millennium, Probank, FBBank and Proton Bank will seek a new shelter and strategic investors.