Leumi Initiates an Additional Efficiency Plan, following the Steps Taken Over the Last Few Years
500 to 600 Leumi employees, representing approximately 5% of the total workforce, are expected to retire, in line with the voluntary retirement plan
July 12, 2017
The Leumi Group (TASE: LUMI) announced today, that its Board of Directors has approved an additional efficiency plan, following the efficiency measures taken by the bank over the last few years. By the end of 2017, some 500 to 600 employees are expected to retire, in line with the voluntary retirement plan.
This plan follows a reduction of some 2,200 employees during the years 2012 to 2016. This reduction, together with further steps taken by the bank, resulted in a substantial improvement in the cost-income ratio, from 72% in 2012 to 65% in the first quarter 2017.
The plan is being carried out in conjunction with process enhancements, consolidation of lines of business, and technological advancements, being led by Leumi for a number of years. The plan's implementation, along with reduced operational costs and the substantial reduction in the amount of real estate being used by the bank, will further improve the bank's cost-income ratio.
The Bank estimates that the total cost will between 500 to 600 million NIS. This cost will be spread over the course of five years, for the purpose of calculating the Bank’s capital adequacy ratio. The main terms include an early pension arrangement up until the legal retirement age, or extended severance compensation, in line with the parameters defined in the program.
Rakefet Russak-Aminoach, Chief Executive Officer, Bank Leumi, said: "Along with the focus on the bank's core business, the continuing efficiency process, is a significant pillar in adapting the bank to the changing, competitive and dynamic environment. As always, the retirement process will be carried out in consideration and full cooperation with Leumi's employees' representatives."
Forward Looking Statements
It is clarified that the above information regarding the scope of the Efficiency Plan is forward-looking information. The actual scope of the Efficiency Plan will depend on, inter alia¸ the response of the employees to the to the offers regarding retirement in accordance with the terms of the plan. The actual results of the Efficiency Plan may therefore be significantly different from the data set out above.