Inflation continues to gallop in Italy as in the rest of Europe, bringing the level of consumer prices in the eurozone bloc to new highs. After the 5.7% surge in February, the preliminary estimate for Italian inflation in March looks to 6.7%, while that of the Eurozone should go from 5.8% in the second month of the year to 7, 5% in March. From the rise in the prices of petrol and pasta to the increased costs in the bill, the practical repercussions of the generalized increase in prices also affect wages. Barclays analysts focused on the issue, in particular, on how the national labor contract regulates wages in the banking sector.
Experts point out that the current agreement expires at the end of the year and an estimated annual wages will increase by around 1% starting in January 2023. Negotiations can normally take 6 to 12 months, although over time there have been longer windows, up to two years. According to the investment house, it is therefore unlikely that current inflation levels will affect the salary costs of Italian banks in the short term either directly or indirectly. However, if inflation does not normalize, this could be reflected in the negotiation of the new National Labor contract.
“Based on a simple regression analysis linking negotiated wage growth per employee to actual wage growth per employee, we estimate that for every one percentage point increase in negotiated wages, sectoral wages only increased by about 0.7%.” , explain to Barclays, also highlighting how the relationship between negotiated wages and actual wages can be explained mainly by two main factors: first of all the fact that in the banking sector, more than in other sectors, employees benefit from “ad personam” wages. “.
In other words, wages are defined above the minimum level defined for each seniority category provided for in the national employment contract, which means that when there is a negotiated increase in the minimum wage level this is not reflected in an increase either. -to-one of actual wages. This factor probably applies more to banking investments, wealth management, private banking and top management roles. In addition, Barclays continues, “over the past decade, banks have restructured their networks, accelerating staff turnover through voluntary layoff plans, meaning that junior employees have replaced senior employees, also changing the mix of employee categories. seniority in the workforce,
The British bank therefore expects that these factors will still be visible and influential in the future, given the voluntary employee exit plans already announced by the main Italian banks, such as Intesa Sanpaolo, Unicredit, Banco Bpm and Bper Banca (potentially also Banco Mps , as suggested by the business plan), over the next three to four years. “In our forecasts, we assume that payroll and total costs are constant in 2022, which is consistent with the fact that less than 10% of banks’ costs are linked to inflation in our calculation, and with some other idiosyncratic considerations such as the cost reduction efforts of banks in terms of staff layoffs, which they have already announced and implemented in 2021 “, explain the experts, convinced that among the Italian credit institutions, Intesa Sanpaolo will stand out in particular, which already has a lower cost level of income (53% in 2021) and a better ratio between income growth and operating expenses (+ 2%) . In addition, the institute already has plans to lay off staff, equal to about 9% of the Italian workforce, and already has a plan in place to cut even more than a third of the branches in the next four years. (All rights reserved) and already has a plan to cut more than a third of its branches over the next four years. (All rights reserved) and already has a plan to cut more than a third of its branches over the next four years. (All rights reserved)

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