Unions fear bank merger could lead to job cuts

At the end of August 2006, two major Italian banking groups, Banca Intesa and Sanpaolo Imi, revealed plans to merge the companies. Trade unions expressed concern about the possible job cuts as a result of such a move and awaited the full restructuring plan, which was to be ready by the end of October 2006.

On 26 August 2006, two major Italian banking groups, Banca Intesa and Sanpaolo Imi, revealed merger plans. Under the agreement, Intesa will offer 3.115 shares of its stock for each Sanpaolo share. The proposed deal would form a bank with a combined market value of about €65 million, an average 20% market share in all segments, 13 million clients, about 6,200 bank branches and 100,000 employees. The new bank will become Italy’s largest bank and the seventh largest in Europe.

The management boards of Intesa and Sanpaolo expect that the merger will take place by early 2007. The plan was to be outlined in more detail between September and November 2006, when the project would be presented to the company boards for approval. This period will also see the release of authorisations and the presentation of the whole operation to the market. Intesa and Sanpaolo shareholders are expected to vote on the deal in December for final approval.

The Chief Executive Officer (CEO) of Banca Intesa, Corrado Passera, announced that the merger plan and the multiannual company plan were currently being defined. Both plans will valorise the ongoing projects of each of the banks and will provide indications about the development processes that each sector will have to follow to guarantee the interests of the bank, the shareholders and the clients.

The new bank group will have its headquarters in Turin in northern Italy, with operating headquarters also in Turin and in nearby Milan. The Intesa Chair, Giovanni Bazoli, and the Sanpaolo Chair, Enrico Salza, will co-manage the new bank: more specifically, Mr Bazoli will chair a supervisory board while Mr Salza will lead a management board. Mr Passera will serve as the new bank’s CEO, supported by two other general directors who will be in charge of operational management.

Views and concerns of social partners

Trade unions representing the workers of the banking and insurance sector are concerned about the possible job cuts resulting from the merger. The unions anticipate between 15,000 and 20,000 unofficial and unconfirmed redundancies. The two sectoral trade union organisations – the Italian Banking and Insurance Federation (Federazione Italiana Bancari e Assicuratavi, Fiba), affiliated to the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl), and the Union of Italian Credit, Collection and Insurance Workers (Uil Credito, Esattorie e Assicurazioni, Uilca), affiliated to the Union of Italian Workers (Unione Italiana del Lavoro, Uil) – as well as the Fiba independent federation have already demanded a meeting to discuss what the merger would mean in terms of jobs.

Mr Salza replied to the trade union concerns by ruling out the possibility of a restructuring plan, especially in the Piedmont and Lombardy regions of northern Italy, and envisaging the likelihood of only minor changes in other areas. Mr Salza also underlined that ‘the dimensions of the bank after the merger create opportunities that would not have been possible otherwise’.

The Secretary General of Cisl, Raffaele Bonanni, expressed a positive reaction to the merger of the two groups, which will constitute a first-rate bank in Europe. Nevertheless, Mr Bonanni underlined that the trade union must analyse the industrial plan in detail in order to prevent negative staffing consequences; thus, Cisl requested a meeting with the management of both banks to gain further information.

The Secretary General of Cgil, Guglielmo Epifani, also supported the move: ‘the merger between Banca Intesa and Sanpaolo should give birth to a national bank having a European dimension, as required by the new market dynamics and by the need for safeguarding strong national interests within the context of globalisation’. Mr Epifani believes that the actors involved should focus on re-qualification and staff mobility rather than redundancies. Meanwhile, he spoke of the urgent need for an industrial plan, which was so far lacking.

The newly-appointed President of the Italian Banking Association (Associazione Bancaria Italiana, Abi), Corrado Faissola, appraised the merger as an ‘important and positive operation, which will represent a further step forward in the ongoing process of growth and development in the banking sector’. According to Mr Faissola, the ‘merger between these two important banking groups represents a significant contribution to Italy’s competitiveness at national and international level’.

Marta Santi, Cesos