ARCHIVED - Spanish banks and cajas continue to shed jobs as real estate crisis bites

The Confederation of savings banks ( cajas) shows 20% of branches and jobs have already gone

This weekend yet again the streets of Spain were filled with protestors complaining about the job losses being suffered within the country as the economic downturn continues.
Although the construction sector has suffered hugely public losses, the banking sector has also been chastised by the collapse of the property sector, and job losses in Banks continue to mount.

At the weekend the Economista published an interesting report showing the massive losses experienced by some of the major real estate companies in Spain since the construction sector imploded and although the report was stuffed with statistics and took a lot of concentration to wade through, was quite shocking in the scale of figures being discussed. Reyal Urbis have recently declared their descent into insolvency proceedings, the second largest corporate bankruptcy in Spanish history, with 3.6 BILLION euros of debts.

The main creditors are all Banks, Santander ( owed 550 million euros) BBVA 120 million, and Banco Popular 220 million, and the Sareb, the ‘Bad Bank’, created by the government to absorb toxic real estate assets from Spanish lenders, is owed 785 million euros having absorbed the assets and debts of the nationalised Banks.

And this is just the tip of the iceberg, all of the top real estate businesses now facing financial problems owing billions to the banks and cajas, so it’s no wonder that the resulting wave of fusions, nationalisations, restructuring and mergers is leading to huge job losses and branch closures across Spain.

The Confederación Española de Cajas de Ahorros (CECA) have released data which shows that the number of employees in savings banks has reduced by 24,317 workers since the third quarter of 2008, (-19.6%), bringing the total number of employees on 31st December 2012 to 99.737.
Further evidence of the decline in this sector is the reduction in the number of branches, which has fallen by 4743 which represents 20.5% of the initial 18,414 branches.

At the beginning of 2010 there were a total of 45 savings banks in Spain and 43 of these have already participated in or are currently in a process of consolidation, which represents 99.9% of the sector.

As of September 2012, there were currently only 14 entities or groups of entities, registering an average asset volume of €84,967,000 compared to 45 entities registering the same average volume in December 2009.

In the banking sector, workers have been striking against the job losses in the sector, COMFIA-CCOO, representing around 73,300 banking staff via the Comisiones Obreras union say that as many as 30,000 jobs have already disappeared and the unions fear another 20,000 will be axed, numbers of workers in the sector set to drop to around 218,500 by the close of 2013. Currently there are 238,500 employees in the banking sector, the lowest level in 35 years.


Thousands of jobs will go in the nationalised banks in order to comply with the controls which are part of the bailout money coming from Europe to maintain the solvency of the Spanish banking system, and in November Valencia-based Bankia said it would have to lose 6000 staff in order to meet conditions imposed as part of the banking bailout.

Virtually every town in Spain has a “to let” sign on the door of one of its former cajas or banks as the dust clears from the system shake-up.
But even though the unions recognise the need for restructuring, they also understand the further damage  the entire Spanish economy will face as more people join the relentlessly growing lines of unemployed, “This restructuring is not only an attack to the employment of the financial sector, but to the economic growth of Spain,” said COMFIA General Secretary Jose Maria Martinez in Madrid.

But as the banks tighten their purse strings and these major real estate companies reach their loan renegotiation deadlines, the banks themselves the biggest creditors, how many more jobs will it cost the banking sector when the purses remain resolutely shut and the banks find themselves the owners of yet more property they don´t really want.