Bank Leumi (TASE: LUMI) today reported to the Tel Aviv Stock Exchange (TASE) that in continuation of the bank's streamlining measures in recent years, its board of directors had approved another voluntary retirement plan. The plan, involving voluntary retirement for 500-600 employees, is slated for completion this year.
Bank Leumi already cut its staff by 2,200 employees in 2012-2016. This reduction, combined with other measures taken by the bank, has significantly lowered its efficiency ratio from 72% in 2012 to 65% in the first quarter of 2017.
The program follows improvement in processes, consolidation of business lines, and installment of technological innovations that Bank Leumi has been carrying out for a number of years. In addition to saving on operating expenses and reducing the real estate space used by the bank, implementation of the plan will further improve the bank's efficiency ratio.
The plan will cost an estimated NIS 500-600 million. According to the bank's announcement, the cost will be spread over five years for capital adequacy purposes. The main part of the plan is a pension arrangement until the legal retirement age or extra compensation, subject to parameters set forth in the plan.
Bank Leumi CEO Rakefet Russak-Aminoach said, "Together with the focus on the bank's core business, continued streamlining is a significant element in adapting the bank's activity to the changing situation and the dynamic competitive environment. As always, the retirement plan will be managed with sensitivity and full cooperation with the Bank Leumi workers' representatives."
Published by Globes [online], Israel Business News - www.globes-online.com - on July 12, 2017
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