Bank of Cyprus Cuts Payroll Cost by 35% and One-Fourth of Staff Go for Voluntary Retirement

As part of the cost-cutting measures initiated by the Bank of Cyprus, 1,370 employees volunteered to take part in its retirement programme. The number represents about 25 per cent of the bank's workforce.

It would also translated into a 35 per cent cut in payroll cost. The measures are aimed at restructuring the bank, which imposed a bail-in on depositors, and part of the conditions to 10 billion euro assistance from international lenders which also included winding down Laiki Bank, the country's second largest bank.

The bank forced the conversion of 47.5 per cent of savings beyond 100,000 euro into equity.

As a result of the measures, Cyprus banks suffered from heavy withdrawals despite the bank holidays the government imposed. In an effort to bring back savers and restore trust and confidence in the banks, the country's finance ministry is allowing Cypriots to open new accounts.

Among the conditions for the new accounts are that it must have at least 5,000 euro and cannot be closed for three months. Other restrictions include a daily cash withdrawal limit of 300 euro and it could only be used to pay off loans at any Cypriot bank.

With the wind down of Laiki and merger with the Bank of Cyprus, it becomes the largest single shareholder of the Bank of Cyprus with an 18 per cent stake.