Executives from Banco de la República Oriental del Uruguay said claims that the bank is at risk of bankruptcy are unwarranted and blamed such assertions on banking union AEBU, which has been protesting the bank's plan to close some branches, El Pais reported.

Speaking before a parliamentary committee, executives said changes to the bank's business model years ago have led to higher profits, and added that they plan to invest some $14 million into its branch network this year and hire 130 new employees.

Bank executives also rejected claims from the banking union that the state-run bank is planning to privatize. "There is not activity or any part of the company that is being transferred from the public sector to the private sector," Leandro Francolino, a vice president at the bank, reportedly said.

The bank is moving forward with plans to merge several branches in Uruguayan capital of Montevideo and partially close other branches across Uruguay despite protests from the AEBU.