OP-Pohjola blames regulation for personnel cuts

Finnish financial services group OP-Pohjola has cited cost pressures imposed by regulatory changes for its announcement today that it is seeking €150m in savings by the end of 2015 through a personnel restructuring in its Group Central Cooperative Consolidated business and associated subsidiaries.

OP-Pohjola characterised the changes as a “reorganisation programme covering all personnel groups”, which may see a reduction of more than 10% of the 6,500 affected employees.

It added that “a significant amount of the cost savings will be realised during 2013”.

Reijo Karhinen, executive chairman and CEO, OP-Pohjola Group, said: “Huge changes are simultaneously shaking up the financial sector facing a more rigorous regulatory framework and higher costs. Banks will be required to show higher capital adequacy ratios and thereby better profitability. We will have to adapt to the new regulatory environment and prepare for the extra burden caused by new fiscal charges, such as a bank tax.”

The latest reorganisation programme is a continuation of a broader restructuring that started at the group in 2010, Karhinen added.

“The second stage of this restructuring is aimed at more clearly separating strategic control, businesses and their support functions from each other. We will eliminate overlapping activities, simplify and standardise our practices and streamline the management structure of OP-Pohjola Group Central Cooperative Consolidated.”

The affected business brands include Pohjola Group, OP-Services, Helsinki OP Bank, OP Life Assurance Company, OP Fund Management Company, OP-Kotipankki, OP Bank Group Pension Fund, OP Bank Group Pension Foundation and OP Bank Group Mutual Insurance Company.

The process will not affect the group’s 200 member cooperative banks, or the following businesses: OP-Pohjola Group’s Baltic operations, Omasairaala Oy, Aurum Investment Insurance Ltd, OP Mortgage Bank, Helsingin OP-Kiinteistökeskus Oy, ICT Application and Development within OP-Services Ltd, Pohjola Insurance Ltd’s claims services and Helsinki OP Bank Plc’s branches for private customer business.

The overall OP-Pohjola group employs some 13,500 staff.

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