Bank of Valletta has not explained the reason behind three new voluntary early retirement schemes issued for its ‘eldest’ employees.

Malta’s largest bank is currently undergoing a laborious restructuring programme which, according to its CEO, is aimed at making the bank “smaller but stronger”.

BOV has not replied to questions asking how many of the bank’s current employees are in the 51-year plus age bracket, making  them eligible for one of the three schemes, and the number of employees the bank considers as ideal to fit its new structure.

“We fail to understand why the bank, or any other company, should disclose such detailed internal management data in the press,” a BOV spokesman said.

The spokesman was vague when asked to explain whether BOV intended to follow HSBC’s plan to close some of its branches to reduce its costs.

“Regarding branch closure, the bank, like any other business, keeps its distribution networks, both physical and digital, under review at all times. Branches may be closed or relocated, and new ones may be opened, according to need,” the spokesman said.

It seems the schemes have been issued unilaterally

The two unions representing bank employees had mixed reactions to the schemes.

While the General Workers’ Union, the sole union recognised by the bank as its represents the majority of workers, said the schemes were discussed with its representatives, the Malta Union of Bank Employees lamented over the lack of communication.

“The issue of a voluntary retirement scheme was discussed with the bank’s management during the last negotiations on a new collective agreement signed in May,” the GWU said.

“We wanted to ensure this scheme is not a redundancy one but rather a voluntary scheme as requested by bank staff,” the GWU spokesman added.

The union did not reply when asked whether these retirement schemes are new, or, as stated by the bank, are just a “renewal” of already existing schemes.

On the other hand, a spokesman for the Malta Union of Bank Employees, insisted the schemes are completely new and should have been discussed with it.

“It seems the schemes have been issued unilaterally and doubt whether they consulted the other union,” a spokesman for MUBE said.

Recently, the MUBE frequently made representations on behalf of employees but was always told no schemes were available as the time was not right.

“This is the first time such schemes were issued this way with criteria attached to them,” the MUBE spokesman said.

Reporting on the new schemes, The Sunday Times of Malta had quoted BOV sources stating that the bank is informally hoping to slash between 200 and 300 employees from its books.

Employee costs are a major expense for the bank and, according to its accounts, the bank has seen an increase of over €10 million in staff-related costs during the past six years.

While the bank increased its headcount by 166 since 2013, it also increased the number of staff in managerial grades from 520 to 578.

In 2018, HSBC, the bank’s main rival, has some 450 less staff and spent €15 million less on employment-related costs.

HSBC is now aiming at reducing further its headcount and closing a number of branches.

Staff costs 2013-18

Note: *15 month results