Restructuring continues in banking

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In late 2002, the Italian banking sector is facing further restructuring and job losses. Economic forecasters estimate that there will be 6,000-7,000 redundancies over 2003-4, while trade unions are concerned that 15,000-20,000 jobs could go.

Economic globalisation has brought much change to the Italian banking system (IT9704304F and IT9803321F). Before the onset of liberalisation and privatisation, the Italian system was based mainly on local markets and local clients’ attitudes. Clients, when choosing the bank to which to entrust their savings or to ask for a loan, tended to opt - among the banks which offered the best conditions - for the one closest to their home or office. The system was therefore characterised by small banks with a predominantly local character. Despite mergers and acquisitions, there were still about 830 banking organisations with about 29,270 branch offices across Italy in 2001 (according to data from the Italian Banking Association [Associazione bancaria italiana, Abi]).

The liberalisation and privatisation process has allowed the entry into the Italian market of large foreign-based banking groups, and the European integration process has caused many problems for the small scale of Italian banks. These trends have led to the standardisation of bank products and consequent convergence of the costs of such products, and to a tendency and need among banks to form groups in order to achieve greater competitiveness. In 2001, 226 Italian banks out of 830 were part of a group. The arrival of foreign competition and the profound changes in the 'rules of the game' which bank institutions have to face have gone hand in hand with the current negative economic situation.

According to a report issued in October 2002 by Prometeia- an association which draws up short- and medium-term economic forecasts on the Italian and international economy - over the two-year period 2003-4, the banking sector will face a period of tension in its economic activities while, on the contrary, credit to family will continue to grow (Italian families will tend to invest in so-called 'shelter goods' such as real estate during the economic downturn), increasing lending. The predicted economic difficulties will oblige bank to cut costs drastically, and the Prometeia report forecasts a reduction of about 6,000-7,000 jobs.

Trade unions forecasts are even worse. According to Eligio Boni, the general secretary of the Italian Banking and Insurance Federation (Federazione Italiana Bancari e Assicuratavi, Fiba) affiliated to the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacati lavoratori, Cisl), out of 342,000 banking workers, about 15,000-20,000 could be at risk. Some important banks are facing a crisis: the Banca Intesa group has cancelled all company collective agreements and announced 7,800 redundancies for the next three-ear period; Capitalia institute forecasts 5,400 redundancies; the Banca Nazionale del Lavoro (Bnl) group has already planned 800 early retirements before the end of 2002, the same as Banco di Napoli; and the SanPaoloImi group forecasts an equally major reduction in personnel, especially in the South of Italy (Mezzogiorno).

Unlike other sectors, workforce reductions in the banking sector have, so far, been mitigated by the possibility of using the 'Income, employment, requalification and reconversion solidarity fund for the support of banking sector personnel' (Fondo di solidarietà per il sostegno al reddito, dell'occupazione e della riconversione e riqualificazione professionale del personale del Credito), created in 1998 (IT9803321F). This fund provides for 'ordinary' and 'extraordinary' schemes. The former is funded by a levy of 0.5% of paybill, one-third of which is paid by workers and two-thirds by employers, and is used to support temporary interruptions of the employment relationship or for training. The extraordinary scheme is directly funded by the banks which are undergoing restructuring and is used for dealing with redundant workers. It allows workers with no more than five years to go until reaching pensionable age, and with a certain length of service, to receive a benefit worth 70% of their gross wage until they reach pensionable age. So far, about 50 banks have made recourse to this fund and financed the exit of 6,000 workers.