Banco Sabadell has proposed a redundancy plan for 1,900 employees to the trade unions, which could mean the closure of between 230 and 300 branches. It should help the bank to improve its low profitability, ROE, of 3.1% on equity, far from the cost of capital (which can be up to three times higher). It is also way off the profitability obtained by its Spanish competitors (Santander and BBVA have an ROE of 9% and Caixabank of over 8%).
Banco Sabadell already agreed in 2020 an early retirement plan for 1,800 employees, which was consummated in the first quarter of this year. That means that in two years the bank will have reduced its staff by more than 3,500 workers, over 20% of its workforce.
After the failed merger with BBVA, Banco Sabadell signed a new CEO, Cesar González-Bueno, who has presented a plan to save costs and raise profitability to 6% by 2023.
The unions have roundly rejected the proposal, which Comisiones Obreras has described as “disproportionate,” calling for a new plan of early retirements and voluntary departures.
