Bankia to Cut 6,000 Jobs and Close 1,117 Branches

In accordance with the recapitalisation plan backed by the Bank of Spain and the European Commission for next three years, Bankia will reduce its workforce by 6,000 people, representing 28% of the 20,126 employees of the entity, and also close 1,117 branches, 39% of their total.

El Mundo reported that the workforce adjustment will not necessarily involve the dismissal of all concerned as they could be included in a business sales plan.

Bankia have laid out a restructuring plan that aims to return the organisation, headed by José Ignacio Goirigolzarri, to profit next year. For 2015, the company forecasts achieving 1,200 million euros of profit, with a margin before provisions of 2,300 million euros and a return on equity of over 10%.

On Wednesday, the European Commission gave the green light on financial aid for nationalised Spanish banks, and Bankia is set to receive 17,960 million euros. The figure, which is below the amount calculated by consultants Oliver Wyman of 24,743 million euros, includes 4,500 million euros advanced by the banking bailout fund (FROB) in September.

The bank’s new policy will give greater weight to the financing of companies, leaving aside the exposure to real estate activity. The aim is to keep this exposure at 2.5% of the total loan portfolio, 4,700 million euros, after handing over 24,600 million to Sareb, commonly known as the ‘bad bank’. On 30th June this year, the real estate portfolio stood at 57,200 million euros, but the transfer was made to Sareb at the discounted transfer price of 49%.