According to Central Bank data, as banks seek to cub expenditure, the amount spent on salaries as a percentage of total spending, is declining. In recent months, the percentage of personnel costs for all Cypriot banks has declined considerably reaching its lowest level since data became available.
In the first quarter of 2018, salaries amounted to 48.6% of banks’ expenses, compared to 51% in December 2017 and 52.7% in March 2017. However, banks are still trying to limit spending to offset lower revenue. The cost to income ratio for the banking system rose to 63.9% in the first quarter of 2018 compared to 53.6% in December 2017 and 49.9% in March 2013.
Bank of Cyprus personnel costs amount to 55% of total expenses, compared to 50% in the first quarter of 2017. This rise is due to the fact that personnel costs were increased by 8% in the first quarter of 2018 mainly due to the impact of the renewal of the annual collective agreement with the employees’ union. Hellenic Bank’s personnel costs make up 48% of total expenses, compared with 54% in the first quarter of 2017.
The number of bank employees has remained the same as 2017, 10.632, while in 2016 it was 10,663. 900 Co-op employees are also expected to depart from the banking sector after the agreement with Hellenic.
Data show that there have been changes in the network of branches as well. Since 2012, around 390 branches were closed, mainly due to the reform of Co-operative banks. The decline in branches is 46% and is the largest in Europe. It is expected that another 72 Co-op stores will close down after the absorption of its ‘healthy’ part by Hellenic. The number of bank branches in Cyprus dropped to 460 in 2017, compared to 544 in 2016, down 15.4%.