German Gref, the new president of Sberbank, intends to cut personnel rather than divisions.
Photo: Pavel Solov'ev
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Sberbank Cuts Costs, Freezes Personnel
Sberbank’s personnel policy has been significantly altered. Automation will be increased and there will be a moratorium on hiring new entry-level employees. These moves will help the country’s largest bank lower its high costs, but it may lead to higher unemployment rates in some regions of Russia. They were announced by bank president in an interview with Reuters and appear to be part of a new development strategy being devised in conjunction with consultants from Bain and McKinsey.
Former bank president Andrey Kazmin first announced that expenses would be cut after the third quarter of last year, when analysts became alarmed by them. According to the Savings Bank of Russia (Sberbank) report for last year, the bank closed 51 divisions, 37 of them in rural areas. Those measures were insufficient, however. At the beginning of the year, deputy chairman of the board Bella Zlatkis admitted that expenses remain at last year’s $5-billion level. The three-level financial structure includes 17 territorial banks, 848 divisions and more than 19,000 branches.
The new president intends to cut personnel rather than divisions. At the beginning of the year, Sberbank had 251,208 employees. The bank’s press service was unable to say how many jobs could be cut. It said the new strategy would be made known at the beginning of autumn. Experts think the reduction will be made low-level employees who do the bookwork in operations with clients. Analysts say some of the current personnel of the bank will be retrained for higher positions and that the step is necessary if the bank is going to develop as a commercial bank.
In 2006, every Sberbank employee took in $540,000, and in 2007 that figure rose to $838,000. But at the next largest bank in Russia, VTB, every employee took in $2.5 million in 2007. At Citigroup, which also does a large volume of work with the public, that figure was $5.8 million. Sberbank will lose its traditional and important social function this way. Sberbank is a leading employer in many regions of Russia.
www.kommersant.com
All the Article in Russian as of July 14, 2008
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