BBVA (BBVA.MC) has started what is likely to be a spate of post-pandemic redundancies at European banks. Late on Tuesday the Spanish lender run by Carlos Torres agreed to lay off 2,935 employees, a tenth of its domestic workforce. It’s the first such shrinkage BBVA has pushed through without an M&A deal in recent history. Projected savings of 250 million euros, taxed at 28%, should raise forecast 2022 net income by 5.5% to about 3.5 billion euros.
Though the layoffs will cost BBVA a hefty 245,000 euros per employee on average, other lenders will surely follow. Iberian peer Caixabank (CABK.MC) is in negotiations read more to axe nearly a fifth of workers following a merger with Bankia. And HSBC (HSBA.L), has cautiously revived a pre-pandemic plan to shed around 35,000 jobs. BBVA’s 55% cost-to-income ratio in Spain last year was already better than the European Union average of 65%. As rock-bottom interest rates squeeze revenue, EU bank bosses will sharpen their knives. (By Christopher Thompson)