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EARNINGS

Nordea cuts 2,000 jobs

Nordea, the biggest Nordic bank which today employs around 34,000 people, said Monday it planned to cut some 2,000 jobs across the region by the end of 2012 to counter the effects of rising costs.

Nordea cuts 2,000 jobs

“To reach the anticipated cost efficiency and profitability, the required reduction of employees in 2011 and 2012 is about 2,000, of which between 500 and 650 [will be] in Denmark, Finland and Sweden, respectively, and between 200 and 300 in Norway,” the bank said in a statement.

Due to “increased costs imposed by new global regulation,” all banks face increased challenges, the bank explained, adding that it aimed to “maintain its place among the top-league banks in Europe” and had “decided to take early action to safeguard its strong position on funding and customer relations.”

“As a step in those plans, negotiations with trade unions in the four Nordic countries have been initiated on reducing the total number of employees,” it said, adding that it aimed to cut most of the jobs “through natural turnover and voluntary agreements.”

Nordea said that while negotiation times differed from country to country, it expected all the procedures to be finished by November this year.

Following the announcement, the bank saw its share price jump 1.35 percent in midday trading on a Stockholm stock exchange up 1.20 percent.

The bank last month posted a six-percent drop in its second quarter net profit, to 700 million euros ($987 million), amid falling investments.

“To increase efficiency is never easy,” acknowledged Nordea president and chief executive Christian Clausen in the statement, insisting though that six-percent staff reduction was necessary to boost productivity and thus “safeguard our good rating, competitive funding and thus our ability to offer products and services at the right price to our customers.”

“The alternative — to wait and see — is not an option,” he added.

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BREXIT

Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
 
 
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
 
 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
 
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
 
Barclays and Coutts have also started contacting customers. 
 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
 
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said. 
 
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