Banking Sector Waiting for New Staff Cuts

In the current year, mass reductions of bank employees are expected. Such conclusions follow from the forecasts of the international rating agency Fitch. Fitch expects that in 2017 there will be more bankruptcies and measures to clean up the sector mainly due to a lack of material assets due to poor asset quality and currency risks.

Recall that during the so-called restructuring of the credit and financial sector, 11 commercial banks have already closed. By the middle of March this year, 4,200 people were left without work. Such statistics, according to Salam News, was presented by Elchin Gadimov, Chairman of the Board of Rabita Bank during the last conference.

Meanwhile, in banking circles, this figure is considered exaggerated. “I do not think that such a large number of banks will be closed. Maximum, the Central Bank will revoke the licenses of four or five financial institutions. These will be small banks with the number of employees not exceeding 400 - 500 people. The liquidation of these banks will not significantly affect the labor market. However, the difficult situation in this area will lead to a reduction in personnel in large banks and, as a result, many employees may lose their jobs,” a source in financial circles told Turan.

In addition, staff reductions due to the closure of bank branches are expected. “Large banks will close branches. This process is partly due to the crisis situation in the credit and financial sphere, the fall in lending volumes, etc. Moreover, the law on Cashless Settlements, which entered into force from January this year, will reduce the volume of cash transactions. As this can be done without a physical visit to the bank, the reduction of the corresponding staff of workers will begin,” the source said. According to the experience of previous layoffs, the most unclaimed specialists in the market will remain without work. It will be difficult for them to find a new place. As a rule, the top managers and managers of the failed banks do not care about unemployment.

“Usually, bank owners appoint their relatives and acquaintances to these posts. As a rule, top managers are involved in unscrupulous operations that caused bankruptcy of financial organizations, but they are appointed to senior positions in other structures after the bankruptcy of previous organizations,” the bank expert Akram Hasanov said.

The situation in the labor market in the first quarter of this year is not encouraging. The financial and construction sectors are in a bad situation. But if in the banking sector the crisis is aggravated and staff reductions continue, the construction market is showing some revival, Sahib Mammadov, Chairman of the League for the Protection of Workers' Rights, told the Echo newspaper, noting negative developments in the insurance market. The amorphous labor market structure, illegal labor relations and “gray bookkeeping” at local enterprises call into question any data of the official statistics on unemployment, the average salary, etc. “Since the formalized employment relationship regards 1.5 million of our citizens, and the remaining 4.5 million of the working population work unofficially, it is impossible to operate with any statistics,” Mammadov said. -0 ---