BCR to become Erste’s most efficient bank

To meet this goal, Austrian lenders are to cut costs as of this month. This measure is expected to impact on 22 percent of BCR’s employees. “Most back-office and support positions will be centralized or externalized. As a consequence, the bank’s labor force will drop to 8,200 employees by the end of 2008, from 10,600 in June 2007,” Chairman of the Erste Management Board, Andreas Treichl said.

Back-office and support employees will reach 2,425 by the end of 2008, from 2,670 at the end of 2007 and 5,577 at the end of 2006, according Erste Bank officials. The lender expects a mere 7 percent increase in costs in 2008 as a result of these measures. The number of personnel training sessions rose significantly in September, considering the bank is increasingly sales-oriented, and this trend is to continue in this year’s fourth quarter. The 2007 training budget totals €4.3 million.

The Erste Bank Group estimates its net profit will surge by one quarter year-on-year in 2007 and an annual 20 percent growth rate in the coming two years. Treichl added that Erste will consolidate its corporate segment and its operations on global markets, while still maintaining the focus on the retail segment.

Opening a complaint management office (Ombudsman) is one of Erste’s objectives for BCR in the second half of 2007.

Goals ] BCR has not given up to its own prior-announced financial objectives, such as increasing its net income by more than 40 percent between 2006-2009 and dropping the cost-revenue ratio to 40 percent in 2009 from 55.3 percent in 2006.