ITALY: Italian bank workers go on strike for first time in 13 years

Record ID: 341214

  • Title: ITALY: Italian bank workers go on strike for first time in 13 years
  • Date: 31st October 2013
  • Summary: ROME, ITALY (OCTOBER 31, 2013) (REUTERS) MORNING COMMUTERS IN STREET EXTERIOR OF BANCA NAZIONALE DEL LAVORO (BNL) BRANCH PEOPLE OUTSIDE BANK WOMAN USING CASH POINT VARIOUS OF EXTERIOR OF BNL BRANCH VARIOUS OF EXTERIOR OF UNICREDIT BANK BRANCH NOTE OUTSIDE BANK BRANCH ANNOUNCING DISRUPTIONS TO SERVICES DUE TO STRIKE (SOUNDBITE) (Italian) ROME RESIDENT, GIANPIETRO NARDINO,
  • Embargoed: 15th November 2013 12:00
  • Keywords:
  • Location: Italy
  • Country: Italy
  • Topics: Economy,Employment,Politics
  • Reuters ID: LVARHMBDRQG9GYUD6XUX9YZ0P32
  • Story Text: Workers at Italian banks on Thursday (October 31) went on strike for the first time in 13 years to protest against the country's biggest lenders unilaterally pulling out of a labour contract covering more than 300,000 employees.
    Italian banks were able to steer away from risky financial bets that grounded Lehman Brothers and others. But blinded by seemingly endless loan growth at home, they relentlessly opened up shops right until the euro zone storm hit them.
    The lenders, struggling with the worst sector crisis in five decades, have been left with no alternatives but to massively chop their overgrown domestic branch network in order to regain profitability.
    Crisis-stricken lenders have now announced they will close or merge nearly 3,000 branches and cut 19,000 jobs in Italy.
    The lay-offs, including 8,000 at loss-making Banca Monte dei Paschi di Siena, have prompted bank unions to call on Thursday the first national strike in 13 years.
    "The general trend here seems to be to make the actual branches disappear and substitute them with online services. The number of employees will be cut so it is only right that they go on strike," Rome resident Gianpietro Nardino said.
    The strike was causing disruptions to services and some said it was wrong to call the action on the day before All Saints Day (November 1) which is a bank holiday in Italy.
    "They should not strike. I need to do a bank transfer today because I need to pay my mortgage. Out of all the days they choose to strike today, October 31st," said another resident Loredana Cara.
    Italy had 32,800 bank branches at end of 2012.
    This expanded network, which accounts for 50 percent of total costs, has become a too heavy burden for a sector that last year offered an average return on equity of 0.47 percent.
    Aware of the need of deeper cuts in the workforce, Italy's banking lobby ABI unilaterally annulled in September a collective work contract for bank employees, considered one of the most generous in Italy's already generous employment system.
    ABI's move sent shivers across employees, who had until now avoided the brunt of Italy's economic crisis thanks to indulgent exit and early retirement packages offered by the banks.
    Rome resident Giovanni Diana said he sympathised with the workers.
    "The banks are rich, the bank employees much less so. And now, thanks to automatisation and all the new electronic procedures the banks are getting rid of a lot of these workers and they only hire people with temporary contracts," he said.
    Italian lenders blame the domestic crisis, the longest in post-war Italy, and the sovereign debt turmoil for their sorry state. But much of the problem is rooted in the inability to adapt their business model - too local and retail-oriented - to the Internet revolution.
    With the exception of Spain, Italy bank offices tend to a much smaller number of clients per branch than rivals in other countries. The average office employs on average less than 10 employees against 38 in Britain.
    Even as the global financial crisis became apparent in 2008, Italian banks continued to hire employees and open new branches, keeping costs well above the European average.
    Data from Italy's Fondazione Rossetti show that the number of domestic bank branches doubled in the two decades that followed the privatisation of the sector in 1990.
    When the euro zone crisis eventually exploded in 2011, Italian banks started to shed jobs at a fast pace, but economists said the 30,000 lay-offs carried out so far - about 10 percent of the entire workforce - are not enough.
    Economists and analysts say the cuts need to be deeper and bigger to have lasting impact.
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