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Danish banks facing a grim autumn

It’s probably going too far to get all Shakespearean and suggest there’s something rotten in the state of Denmark, but for ambitious bankers – or even just those keen for a bit of job security – the picture is unarguably grim at the moment.

Jyske Bank announced earlier this week it is to cut 6.5% of its workforce, or 250 jobs from a total of more than 3,800, and merge a number of its branches.

Some 150 employees will be made redundant with immediate effect with the rest coming through natural wastage and a recruitment freeze during 2012, the bank said.

Meanwhile Tonny Thierry Andersen, head of Danske Bank’s Danish retail unit, has warned it could cut as many as 1,500 jobs over the next seven years, coming on top of the 2,000 jobs that have already been cut at group level over the past two years.

And, while Danske has been the worst performer of the Nordic region’s six biggest lenders, so meaning the announcement is not that much of a surprise, the jobs picture is not exactly positive elsewhere either.

Nordea in August said it was cutting 2,000 jobs over the next two years, albeit predominantly expected to be within retail, administrative and support roles.

And SEB has said it intends to cut its underlying cost base by SEK3bn over the next two years.

Nevertheless there are some positives. While exact details remain sketchy, the Jyske Bank cuts appear to be focused primarily on the retail side of the business, while the Danske reductions will, too, clearly be centred on retail and mostly achieved by natural wastage.

Andersen, for example, has pointed out that 25% of the bank’s Danish retail staff are due to retire in the next seven years anyway. The Danish retail unit employs around 6,000 staff in total.

Analysts, too, remain relatively sanguine about the news, although there is an expectation that other Danish banks may follow suit with job and cost reduction announcements.

“It is going to be natural efficiencies, so it will mostly be support, retail and administrative jobs from the look of things,” says one.

“Despite everything Denmark still has very low unemployment at the moment so there can be worse places to lose your job if you’re going to. If it came to it I’d rather lose a job in Denmark than, say, the UK,” he adds.

“The jobs that will go at Danske will primarily be through attrition, so when people retire or not replacing positions when people leave or simply reallocating people from one function or position to another,” another agrees.

“It’s not going to make Danske a hugely attractive employment proposition but then, when it comes to jobs generally, the whole global banking economy is suffering at the moment, perhaps apart from the Far East,” he adds.

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