As "Globes" revealed last Thursday, Bank Hapoalim (TASE: POLI) is embarking on a further streamlining program. The bank announced a program this morning for shedding 1,500 through voluntary retirement in the period 2017-2020. The program, which has been approved by the bank's management, headed by Arik Pinto, will cost an estimated NIS 1.2 billion. The cost will be capitalized and will affect the bank's capital adequacy ratio over five years. The bank says that the streamlining program will lead to future savings of NIS 450 million annually.
Under Bank Hapoalim's previous streamlining program, about 300 employees left the bank, or will leave by the end of this year. The voluntary retirement scheme will be either through an early pension or through severance pay of 275%, and will be carried out in cooperation with the bank's workers' union.
The main difference between the current program and the previous one is that the current program is open to younger employees, whereas the previous one was mainly offered to employees in their late 50s and older.
The younger employees will be offered 275% severance pay. Older employees (probably from age 53), will be offered retirement in exchange for a grant, and from a certain age they will also be offered a bridging pension until they are entitled to receive their normal pension.
The headcount of the Bank Hapoalim group fell by 1,800, or 13%, in the period 2012-2015. 1,500 of those who left worked in the bank itself. The bank says that the streamlining program will bring about a 3% improvement in its efficiency ratio to 58% in terms of current revenue.
Bank Hapoalim CEO Arik Pinto said, "The competitive and regulatory environments oblige the bank to seek greater efficiency, in order to meet regulatory requirements and to continue to generate value for all stakeholders, including the bank's customers, workers, and shareholders. The bank's management has undertaken a very challenging streamlining program, alongside programs and policies for business growth.
"We believe in striving for efficiency as a way of life, while doing it with sensitivity and in full cooperation with the bank's workers' union. We are acting constantly and determinedly to improve our operating model, using technology to make processes more efficient and to improve customer service. The slogan 'being first means obligations' is our watchword, we are committed to it, and we shall continue to lead the Israeli financial system in every area, including technological innovation and improving efficiency."
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2016
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