A-share com­mer­cial banks re­struc­ture, shrink work­force

China Daily (USA) - - BUSINESS - By JIANG XUEQING jiangx­ue­qing@ chi­nadaily.com.cn

Ten out of the 16 A-share listed Chi­nese com­mer­cial banks have wit­nessed a shrink­ing work­force in the first half of 2016, ac­cord­ing to anal­y­sis of their lat­est in­terim fi­nan­cial re­ports.

China’s four big­gest Sta­te­owned com­mer­cial banks by as­sets saw a to­tal de­crease of more than 25,000 staff mem­bers as of June 30, com­pared with the end of 2015. Em­ploy­ment at China Mer­chants Bank Co Ltd, a na­tional joint­stock com­mer­cial lender, also dropped by more than 7,700 over the same pe­riod.

Some media re­ports de­scribed the shrink­age as “a big wave of job cuts”, but China Mer­chants Bank de­nied that in a state­ment, say­ing that the shrink­age of staff num­bers was mainly due to an ad­just­ment of its em­ploy­ment mode in line with the State’s laws and reg­u­la­tions.

CMB­said it had re­duced the num­ber of ex­ter­nal non­staff work­ers and en­trusted some non­core busi­nesses with pro­fes­sional ser­vice providers.

Sta­tis­tics also showed that as of June 30, there was a re­duc­tion of 1,715 ex­ter­nal non­staff work­ers at the Agri­cul­tural Bank of China Ltd from the end of last year.

Sources in the bank­ing in­dus­try said sev­eral fac­tors led to the shrink­age, in­clud­ing lay­offs and the rapid growth of on­line ser­vices. They said the re­duc­tion of staff was part of a re­struc­tur­ing taken by the banks for their de­vel­op­ment.

Wu Qing, deputy di­rec­tor of bank­ing re­search at the De­vel­op­ment Re­search Cen­ter of the State Coun­cil, said the em­ploy­ment shrink­age in the bank­ing in­dus­try was the same as with other in­dus­tries that were faced with tech­no­log­i­cal change.

“Ris­ing la­bor costs and dig­i­tal­iza­tion con­trib­uted to the staff ad­just­ment,” he said.

China’s eco­nomic­slow­down and the cen­tral bank’s de­ci­sion to fur­ther lib­er­al­ize in­ter­est rates have put great pres­sure on banks’ prof­its, an­a­lysts say. As a re­sult, many banks re­sorted to cost cut­ting.

Ris­ing la­bor costs and dig­i­tal­iza­tion con­trib­uted to the staff ad­just­ment.”

deputy di­rec­tor of bank­ing re­search at the De­vel­op­ment Re­search Cen­ter of the State Coun­cil

Wu Qing,

In the mean­time, job-hop­ping by em­ploy­ees also be­came a ma­jor fac­tor be­hind the staff shrink­age.

“Pri­vately-owned banks and emerg­ing fi­nan­cial in­sti­tu­tions, which of­fer more ap­peal­ing com­pen­sa­tion pack­ages, have at­tract­ed­many bank pro­fes­sion­als,” said Guo Tiany­ong, di­rec­tor of the re­search cen­ter of the Chi­nese bank­ing in­dus­try at the Cen­tral Uni­ver­sity of Fi­nance and Eco­nomics in Beijing. Xue Jin con­trib­uted to this story.

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