Montepio to make 800 redundant

 In Banks, News

Portugal’s mutual bank Montepio is planning to make 800 staff redundant as part of a major restructuring process.

The bank is to ask the Government to issue the statute of a company under restructuring. Under such an exceptional measure it can, under Portuguese labour laws, make a significant part of its workforce redundant either through recision of contract, through mutual consent, or early retirement.
If it goes ahead, 20% of its total staff will see the door at a cost of an estimated €80 million to the bank.
Contacted in an official capacity to comment on the plan by ECO online news, the Chairman of the Board of Directors and President of the bank’s executive commission, Carlos Tavares and Pedro Leitão responded: “The bank is adjusting processes and studying its size, a fact which as been shared with staff and respective departments”.
But other sources have insisted that Banco Montepio’s board has already informed the Bank of Portugal of its restructuring plan, which will involve the closure of 31 branches.
However, this restructuring plan will be much broader and involves a reduction in staff of about 800 0r 20%. At the end of June Montepio employed 3,560.
The bank is said to be preparing an application for the Statute of a Company under Restructuring directed to the Ministry of Work and Social Security (MTSSS) which if granted would allow the bank to be more flexible in the numbers of staff it wishes to let go under a regime of amicable recision of contracts while maintaining staff rights to unemployment benefits.
In order to achieve this, the bank will have to present a project which shows the scale of the restructuring that is necessary for the financial and economic viability of the institution, enabling it to exceed current limits in terms of redundancies.
The MTSSS would then have to approve or reject the plan after consulting the Ministry of the Economy and its social partners about the economic situation and employment prospects in the sector in question.
The changes at Banco Montepio will also touch the executive commission in that the executive vice-president Dulce Mota who has been acting CEO for the past year, is to leave, joining Carlos Leiria Pinto who left his post as CEO in March.