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In less than four years, over two hundred bank branches have closed in Greece and about four thousand employees have been dismissed, according to data for the period 2008-2011. The cut in bank branches came naturally with the deepening crisis and recession. Greek bankers explain that the reduction of the network is a key moment for the reduction of operating costs, taking into account that the reduction of rental expense alone is saving banks between 15% -30% of operating costs. As for staff dismissals, the most important is the role of retirement and voluntary leave when employees receive a decent compensation.

During the period 2010-2011, banks achieved a reduction in operating costs of about 10%, mainly by renegotiating rents and commissions. There was also a significant cut in advertising and marketing costs as well as a reduction in the external supplies of services and materials. Wage costs, which were cut by about 12% in 2011, are expected to further decrease in 2012. This week, the management of Alpha Bank requested a meeting with the union of employees in financial institutions to negotiate lower corporate salaries. In this way, the management is striving to avoid direct dismissals. Similar steps have been taken by the National Bank of Greece, Piraeus Bank and Emporiki Bank.

From 2009, Eurobank EFG achieved a three-year plan to reduce costs. It reached 200 million euro, which is a 16.5% cut in the bank spending during the recovery period. Alpha Bank reduced its staff by 1100 and closed nearly 100 bank branches in Greece. Piraeus Bank made major cuts too, not only of local branches but also of those abroad. Piraeus closed a total of 60 bank offices and dismissed a thousand people.

Bankers believe that the shrinkage of the banking industry is necessary and it must be proportionate to the volume of the economy, which this year continues to decline, albeit at a slower pace compared with 2011. Recession reached 6.9% of GDP in 2011 while in 2010 it was 4.5% and 2.4% in 2009. Cuts in bank expenditure, in turn, were 5.4% last year. The supervisory Troika supports additional cutting of salaries of employees and management in order to optimize the budgets of financial institutions. This year, banks are expected to further reduce wage costs and if necessary, they will begin selling their subsidiaries in the European periphery. The National Bank of Greece is preparing to sell another 20% of its Turkish branch whereas the branches of Eurobank EFG and Alpha Bank in Romania and Bulgaria are considered a trump card in the recapitalization of Greek banks.