MADRID: Spanish banks, which slimmed down after a property boom went bust in 2008, are once again closing branches and slashing jobs as their profitability is hit by stiff competition.
The country’s three biggest lenders—Santander, BBVA and CaixaBank—last week all posted lower first quarter net profits, especially in Spain, which is grappling with a jobless rate of 21 percent
Santander, the eurozone’s biggest bank by market capitalization, plans to close 450 smaller branches and cut 1,400 jobs in Spain, about five percent of the staff in its home market, through voluntary departures.
It expects the move will save between 75 and 110 million euros ($126 million) per year from 2017.
Barcelona-based CaixaBank, Spain’s third-largest bank, plans to cut 500 of its 32,500 jobs in the country through early retirement agreements as it seeks to trim its salary costs.
“We fear that the job cuts in the banking sector have not ended,” Ignacio Soto of the UGT union, one of Spain’s largest, told Agence France-Presse.
Spain has the densest bank branch network in western Europe, with 8.6 branches per 10,000 residents, according to consultancy Roland Berger.
The average in the entire European Union is five branches per 10,000 residents.
The country’s banking network already underwent a deep restructuring after the collapse of a decade-long property bubble in 2008 sent the Spanish economy, the eurozone’s fourth largest, into a tailspin.
The crisis led Spain to take a 41.3 billion euro loan from the European Union to restructure its banks which were saddled with property and loans whose value had plunged.
Between 2008 and 2015 the sector shed 75,000 of its roughly 278,000 jobs and more than 13,000 branches closed their doors, according to the Bank of Spain.