BBVA has reached an agreement with the unions to launch the ERE (Employment Regulation File) after a last marathon day of negotiations. The bank has agreed to lower the number of outflows from this work adjustment until 2,935: it is about 2,725 exits and 210 leaves of absence. The dismissals represent a reduction of 863 less affected compared to the initial claim of the entity, which raised the dismissal of almost 3,800 employees, according to union sources. It will also relocate 657 workers.
Eventually, the bank will dispose of something more than a 10% of its staff in Spain (about 29,000 employees). In the branch network, where 80% of those affected were concentrated, they have seen the adjustment figure reduce by a third. Finally BBVA will close 480 offices (one in five), fifty less than the initial proposals.
From that set of offices, most closings (40%) will be in Catalonia, where the bank plans to close almost 200 branches. It is in this territory where there are still many duplications derived from the acquisition of Catalunya Banc in the previous economic crisis. For its part, in the Centro area (basically Madrid and Castilla La Mancha) it will close at 91 points. In the South direction (Andalusia and Extremadura), they will be almost 70; in the Northwest zone (Galicia, Asturias and Castilla y León), 55; in the North (Basque Country, Navarra, Cantabria and La Rioja), 38; in the East (Valencian Community, Murcia and the Balearic Islands), 32; and in the Canary Islands, 12 branches.
The ERE agreement has accelerated since a strike at the offices last week. That strike precipitated events. BBVA has agreed to eliminate the generational balance clause, which required the departure of 50% of those affected under 50 years of age, so that predictably 72% of the exits will be from workers over 50 years of age.
The early retirement system agreed supposes to establish in those 50 years the age from which workers who join the ERE can stop working and continue to receive income, plus Social Security contributions, up to 63 years. The minimum period of seniority in the bank is maintained at 10 years.
For those who have up to 63 years They will be paid 20 days per year of work, with a maximum of 12 monthly payments.
Employees who are in the age group between 55 and 62 years They will receive a temporary income equivalent to 75% of their annual salary level until they reach 63 years of age. In addition, they will have a special agreement with Social Security up to age 63 with an annual 3% increase. And discount of unemployment benefit or, where appropriate, subsidy.
If they are found between 53 and 54 years, they will receive an income of 65% of their gross salary up to age 63. Also the special agreement with Social Security up to 63 years of age, with an annual 3% increase. And the discount of the unemployment benefit / subsidy.
On the stretch from 50 to 52 years They will also receive compensation corresponding to six times 65% of their annual gross salary, with a maximum of 320,000 euros. At the same time, they will be signed a special agreement with Social Security up to 63 years of age with a temporary income of 15,500 euros per year. In addition, they will have a voluntary premium of 2,000 euros for every three years of seniority and other additional payments, according to each profile.
One of the novelties arrives for the under 50 years (or older than that age with an antiquity of less than ten years) that are affected by the ERE. The bank will pay them compensation corresponding to 40 days per year worked, with a maximum of 30 monthly payments. In addition, they will charge a voluntary premium of 2,000 euros for each year of seniority, and other additional payments for concepts such as “difficult relocation” in the labor market.
To prepare the final list of voluntary departures, the bank will take into account the criteria of suitability, regulatory training, training and potential and less functional versatility.
For CC OO, this agreement is satisfactory, as it is a text that “very positively distinguishes those signed in recent times” in the sector and that «Marks the path» of those who will follow it. Other large EREs such as CaixaBank, still under negotiation, remain to be resolved.
It is estimated that the cost of the plan will be 960 million euros before taxes, of which 720 million correspond to dismissals of the workforce and 240 million to the closure of offices. This cost will be recorded in the accounts for the second quarter of 2021 and it is estimated that it will have a negative impact on the CET1 ‘fully loaded’ capital ratio of about 28 basis points. This process will generate estimated savings of approximately 250 million euros per year before taxes from 2022, of which about 220 million correspond to personnel expenses. In 2021 the estimated savings will be approximately 65 million euros before taxes.