SHANGHAI/HONG KONG: Bankers at China’s top state lenders are quitting in increasing numbers because of cuts to their pay and perks, and moving to a new breed of financial firms such as leasing companies, trusts and online platforms, bankers and headhunters say.
As part of an austerity, anti-graft drive, Beijing last year dictated pay cuts of up to a half for senior-level state bankers. Some state-owned lenders have since quietly cut salaries across the board.
The declining popularity of bank jobs could make it difficult for state lenders to hire and retain talent, making them less able to compete with newer lending institutions.
“In the past we wouldn’t see CVs from the state sector, but now we do,” said Maggy Fang, managing director of executive compensation Asia Pacific at Towers Watson, a professional services company, noting that most of these resumes are from mid-level, thirtysomething bankers.
And they are good news for the newer finance firms.
“If an applicant is from one of the big five (state banks), they will have good training and are likely to have experience of trading systems and customer credit,” Zhao Shen, deputy general manager of the risk management department at the leasing arm of shipbuilder China CSSC Holdings, told Reuters, adding his firm has hired from banks and plans to hire more. “We can guarantee we’ll pay them more.”
At Shanghai Pudong Development Bank Co Ltd (SPDB), one of China’s top-10 listed banks, a broad 10-20 percent pay cut at headquarters this year triggered a rush for the exit and better-paid positions elsewhere, said two bankers. A spokesman for SPDB said there had been no change in policy, and salaries had increased as well as fallen.
Fifth-ranked Bank of Communications Co Ltd said in January it would link larger portions of pay to performance, prompting “many” to leave, bank employees said. Working at a big state lender has traditionally been seen as highly prestigious and, for some, a stepping stone to a political career. But the newer finance firms are proving attractive rivals.
A mid-level banker at a state-owned lender can typically earn 600,000-800,000 yuan a year ($97,000-$129,000), according to Tower Watson estimates. Staff get 5 days annual leave.
In contrast, online finance platforms, trust firms and leasing companies offer more than double those salaries, longer holidays and fewer travel curbs; staff at state banks have to hand in their passports and request approval to travel abroad, which can take up to a month.
Some of the top-level pay cuts mean that senior branch employees can now earn more than those at group headquarters, and that has led some at branch level to turn down promotion to more senior, but lower-paid roles, said Tower Watson’s Fang, disrupting the flow of talent. Reuters
