Nordea has cut over 2,000 employees, but staff costs have INCREASED this year

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Nordea is shrinking its headcount, it’s eliminating over 2,000 roles and focusing on cost-efficiencies. Yet, its staff costs are still on the up, why is this?

In its second quarter results released today, Nordea revealed that over 2,100 employees have departed since this point last year. This is not news – it’s highlighted this plan for the past 12 months. What is interesting, however, is that it’s still spending (a little) more on its employees – €1.53bn, from €1.51bn in 2011.

The reason for this is relatively straightforward – while those in retail banking, its corporate centre and group functions have been targeted for the majority of cuts, expensive employees in its wholesale banking and wealth management division have been left relatively unscathed.

Staff costs in wholesale banking increased by 9% to €404m, while the wealth management division upped employee expenses by 8%. However, employee numbers have fallen – by around 350 since June 2011, which suggests that it’s salaries and bonuses driving up costs.

It’s only the ‘other’ wholesale banking unit, which includes international divisions, IT and transaction products, where headcount is stable, at around 4,400 people.

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