Between 4,000 and 5,000 jobs lost in banking industry by 2016

  • Over more than ten years an average of 2,000 and 3,000 jobs have disappeared each year.
  • The next three years will be no exception.
  • The large Belgian banks’ cost-cutting plans could affect over 4,000 people.

These past ten years have seen the banking sector lose 26,000 jobs. They dropped from 75,000 in 2002 to 59,000 by the end of 2012. This involves purely banking jobs, including employees under the collective agreements 208 and 310. This does not include brokerage firms or independent banking agencies.

So, over ten years, 2,000 to 3,000 jobs have disappeared every year. The pattern is expected to continue at least until 2016. One only needs to look at the large banks’ cost-cutting plans. ING Belgium is expecting to get rid of “the equivalent of 1,150 full time jobs.” “1,500 people, however, will feel the impact of the measure,” calculated Jean-Michel Cappoen with SETCA, the socialist union. “BNPP Fortis is counting on a similar reduction by 2016. Belfius is also considering eliminating 1,000 jobs in the next three years,” adds Cappoen. “And that is without accounting for unknowns such as Delta Lloyd’s recent decision to sell its Belgian bank” (and affecting 500 people). The talk is of 4,000 to 5,000 fewer people over the next three years.”

“Around 4,000 to 5,000? Yes. This is the expectation,” confirms Pierre Verelst with the CNE Christian union. “We know that the next few years will be no walk in the park for a sector struggling with cost-control plans. Banking industry personnel accounts for 75% of total cost. This explains these personnel reductions plus more and more frequent use of outsourcing.”

These job reductions are a sign of the deep changes occurring in the banking landscape. It’s of course due to the crisis, but not entirely due to the crisis. These changes had begun long before. For the past 20 years, banks had been drastically shedding branches. The financial landscape consolidation is a possible explanation. In the 90s and into the early 2000s many institutions were either absorbed or merged with others. Let’s recall the consolidation of KB-Cera, Dexia-Bacob, CGER Générale de Banque etc. In 1993 there were still 18,000 branches. In 2002 only 10,197 were left standing – and at the end of last year, just 7,460.

In all, over 10,000 branches disappeared in twenty years, and there are more victims to come.

ING Belgium, which had 773 branches in Belgium at the end of 2012, is planning to close 40 more between now and 2015. BNPP Fortis over the same period announced it would close 150 branches (bringing the number from 937 to 786) without accounting for the fate of the 306 independent branches in the Fintro banking network. As for Belfius, it had 796 branches at the end of 2012, and now it only has 779 as of June 30.

KBC is alone in announcing a stabilization following its network update in 2010 and 2013. “The network at this time has 803 branches in Belgium of which 107 CBC branches are in Brussels and Wallonia. It’s almost the same size as it was in 2009,” confirms bank spokesperson Stef Leunens, who adds that “the quantity of KBC branches is about the same as the points of contact between Kredietbank and CERA bank at the time of their merger in 1998.”

Mergers aren’t the whole story. In the past two years the number of banks has not dropped by much, whereas the number of employees and branches keeps shrinking. And in the last few years banks suffered heavy losses as a result of the crisis. They don’t see that they have any choice other than to increase their own capital. Since they’re not attracting investors, they are forced to finance this increase on their own by holding part or all of their profits.

Since banks are now competing ferociously to develop their market shares and capture deposits, they’re not increasing their margins on their products. They would rather lower costs and reduce personnel. This logic will continue to guide their actions for the next few years.

PIERRE-HENRI THOMAS

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