Insider Business Stable payroll for Bank of Cyprus and Hellenic

Stable payroll for Bank of Cyprus and Hellenic

Payroll costs for Bank of Cyprus and Hellenic Bank remained stable for two consecutive quarters despite a downward trend recorded in the second and third quarters of 2018.

Half of the expenses of both banks go towards wages, according to Central Bank of Cyprus figures. The payroll in the fourth quarter of 2018 was at 50% – as high as in the third quarter. In contrast, payroll was at the lowest point ever since data was recorded in the first and second quarters. That is, at 48.6% and 47.5% respectively.

Bank staff costs accounted for 66.2% of total expenses back in March 2013, the month of the bail-in in Cyprus. In March 2014, salary costs amounted to 59.9% and reached 54.1% in December 2014. In December 2015, salary costs dropped to 51.3%, declined to 51% in December 2017 and reached 50% by 2018.

Despite the decline in salary and total expenses ratio, banks are still facing a problem because of a decline in revenue. According to figures announced, Bank of Cyprus spent €176.62 million on wages in 2018 compared to €166.43 million in 2017. The Group’s total staff was 4,146 as at December 31, 2018 (compared with 4,355 in 2017).

Hellenic Bank’s staff costs amounted to €82.5 million by end of December 31, 2018 compared to €81.6 million for the year which ended on December 31, 2017. It recorded an increase of 1% and represented 43% of the lender’s total expenses.

The increase was mainly due to the decrease in staff in the first quarter of 2018 following a voluntary early retirement plan after Hellenic’s acquisition of the Cyprus Co-op Bank. And the recorded offset was because of staff transfers as part of the acquisition deal of September 1, 2018.

The cost to income ratio for the banking system stood at 63.9% by end of March 2018, at 70.9% by end of June, at 60% by end of September and at 62.1% by end of December. The cost to income ratio was only 49.9% in March 2013, went down to 41.2% one year later and rose to 53.6% by December 2017.


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