MADRID (Reuters) - Santander is aiming to close 1,150 branches in Spain and cut just over 3,700 jobs, or around 11 percent of its workforce in the country as it integrates Banco Popular, unions said on Tuesday.
These measures are also part of wider moves by the euro zone’s biggest lender by market value to focus on cost savings in Europe while pursuing higher profitability in Latin America.
“This reduction will mainly affect the commercial network and its intermediate support structures, although it will also affect the principal offices,” Spanish union Comisiones Obreras said in a statement.
“For Comisiones, it is highly worrisome that such a high number of jobs is destroyed and our first objective will be to try to reduce the figures proposed by the bank,” it said.
Santander declined to comment.
At the end of March, Santander had 32,366 employees and 4,366 branches in Spain, according to the banks’ quarterly report.
Since the financial crisis in 2008, the number of branches in the Spanish banking sector has declined by more than 40 percent while the number of employees has shrunk by more than 30 percent.
In April, Santander said it was aiming for incremental annual cost savings of 1.2 billion euros (1.04 billion pounds) in the medium term, of which 1 billion euros would come from Europe.
In Spain, Santander said it was expecting 250 million euros of additional cost savings from the integration of Popular, bought in 2017, to boost its underlying profitability to between 14-16 percent from around 11 percent.
When it first announced the acquisition of Popular, Santander said it was expecting annual cost synergies close to 500 million euros from 2020.
Neither the union nor the Spanish bank gave a timetable for the reduction though Santander’s CEO Jose Antonio Alvarez has previously said the bank expected to finish most of the cuts linked to the Popular integration this year. [E8N1WK015]
Along with other European banks, Spanish banks are struggling to increase profits as ultra low interest rates are squeezing returns. As a result, they are cutting branches and boosting efforts to sell services on digital platforms.
Caixabank has recently announced plans to lay off around 6 percent of its Spanish workforce and to cut almost a fifth of its branches in Spain over the next three years in an attempt to boost profitability.
Reporting by Jesús Aguado; Editing by Jane Merriman and Keith Weir