Payouts have climbed well beyond the €200,000, which was once regarded as the maximum amount.
Inflation and the cost of living are undoubtedly on the rise, but payouts to bank employees taking voluntary retirement appear to be cushioning much of the impact.
Over the past year, bank exit packages have pushed well beyond the €200,000 tax-free ceiling, culminating in cdbBank’s voluntary retirement scheme, or VRS.
Banks have secured approval from the tax commissioner for the first €200,000 paid under their schemes to be tax-free. Any amount above that is taxable.
For Bank of Cyprus to take over cdbBank’s performing loans and deposits, cdbBank first had to introduce a voluntary exit scheme. It did so, and the process was completed, as Kathimerini reported last week. Those who opted to leave appear to have secured substantial payouts.
A circular from bank employees’ union ETYK confirms the generous terms. The union said its intervention had secured significant improvements to the early voluntary retirement scheme, making the final offer considerably more attractive than the original, with compensation reaching €350,000.
That makes it the most generous scheme offered to date, continuing a trend set by two other banks in 2026. Eurobank and Alpha Bank may not have reached €350,000, but both exceeded the €200,000 that, until recently, had been regarded as the ceiling for bank employees leaving under voluntary exit schemes.
Banks have secured approval from the tax commissioner for €200,000 paid under these schemes to be tax-free. Although definitive information is not available, the reasonable assumption is that any amount above €200,000 is taxable.
Earlier, in July, Alpha Bank Cyprus ran a voluntary exit scheme following its absorption of AstroBank. It set a maximum payout of €225,000 — a figure that, until very recently, would itself have seemed substantial.
Beyond that €225,000 ceiling, however, an additional departure bonus was available to Alpha Bank Cyprus employees working in Paphos, Famagusta and Larnaca.
Eurobank’s scheme, launched in March 2026, stated that lump-sum compensation would not be subject to income tax provided it did not exceed €200,000, in line with existing tax legislation. There were cases under that scheme, too, where payouts exceeded the threshold.
The bank added a 10% bonus for employees taking the offer. Someone entitled to the maximum €200,000 therefore received €220,000, with the additional €20,000 subject to tax.
All three schemes also provided for certain benefits to continue after employees left, in addition to their cash compensation.
Workforce stands at 6,250
For 2025–2026, the eight members of the Association of Cyprus Banks employed 6,250 people across 155 branches and operated 321 ATMs.
According to the association’s latest figures, Eurobank Ltd had the largest workforce, with 2,450 employees, 59 branches and 156 ATMs.
Bank of Cyprus employed 2,447 people, with 56 branches and 132 ATMs. The third systemic bank, Alpha Bank Cyprus, had 746 employees, 25 branches and 26 ATMs.
The figures for all three banks may have changed slightly. They were compiled immediately after Eurobank’s voluntary exit scheme and may not be fully up to date. They also predate the Alpha Bank Cyprus and cdbBank schemes, the latter of which affects Bank of Cyprus’ staffing numbers.
Under the agreement, Bank of Cyprus will take on 50–60 cdbBank employees who did not opt for voluntary departure.
National Bank of Greece (Cyprus) employed 143 people and operated two branches and four ATMs. Ancoria Bank had 138 employees and three branches, with no ATMs, while cdbBank was listed as employing 133 people across two branches.
Société Générale Bank employed 113 people, with three branches and three ATMs. The Housing Finance Corporation had 83 employees and five branches.
European Central Bank figures show how sharply banking employment in Cyprus has fallen over the years. The sector employed 12,853 people in 2012, falling to 11,142 in 2013 and 10,957 in 2014, before edging up to 10,983 in 2015.
The workforce stood at 10,663 in 2016 and 10,632 in 2017. It then dropped to 8,946 in 2018, 8,554 in 2019 and 8,347 in 2020.
There were 8,072 bank employees in 2021, followed by another substantial reduction to 6,766 in 2022. The total fell to 6,530 in 2023, rose to 6,608 in 2024 and, according to the ECB, stood at 6,349 in 2025.
