Santander Will Reduce its Payroll After Purchase of Popular

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Santander Will Reduce its Payroll After Purchase of Popular

Banco Santander de España

The authorization of massive dismissals before regulatory bodies in the Spanish economy known as the Employment Regulation File (ERE, in Spansih), will close with the signing of an agreement this week: “The extinctions will be, between early retirement and voluntary and forced dismissals, which will add 1,100 people.”

According to the report presented by the company, there will be a relocation of 575 Banco Popular employees in the Santander Group’s service companies. In addition, a transfer of approximately 100 employees from the central services to the different commercial networks of the two entities.

In total, there are 34,970 employees distributed among 22,637 of Santander, which registered an ERE of 1,380 dismissals a few months ago; and 22,637 of Popular that to June denoted 2,592 resignations. In the final balance and according to figures provided by the unions themselves, the adjustment will affect 3.14% of the large total number of employees.

At the moment, the Santander Bank is alert and looking for new entities that are profitable. About a week ago, Popular announced to the media the sale of the subsidiary Totalbank, the branch in the United States, for 528 million dollars, to the Chilean entity Banco de Credito e Inversiones (BCI). The operation gives a surplus value of approximately 170 million euros and may have a positive impact on capital CET1 of 60 basis points.

Financial Terms

An agreement has been signed between the central trade unions (except one), which contemplates early retirement of up to 80.0% of the salary for employees from 55 to 62 years (up to the fulfillment of 63 years), compensations of 40 days per year worked for the unemployed under 50 years and a just payment or payment of 80.0% of the pay of eight years for those who are in the range greater than 50 and even 54.

According to what Público has said, union organizations have often been suspicious that after this first file may be followed by another that will affect the Santander and Popular commercial network, all this by the beginning of 2019, once the integration of the different computer systems has been completed.

For the media consulted and for income and tax benefits obtained by Banco Santander, and in four months of operation, the Spaniards managed to cover the losses of the Popular of more than 12.218 million euros declared at the end of the first half.

According to Púbilco, 5,226 million euros in the form of tax deductions on the same day of purchase (on June 6) and another 7,702 million euros on October 17, when closing the capital increase launched to finance this acquisition, in which he received offers for more than 18,000 million euros. In total, it was 12,928 million euros.

The media adds that the synergies generated by ordering the patrimonial structure of Popular have meant for Santander to put on the market – in co-participation with the Blackstone fund – real estate assets for 30,000 million euros but valued at 10,000 million. The cash deposit of 614 million euros is added to the sale of TotalBank.

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