BEIJING, Sept 20 (Askume) – The Beijing branch of China Minsheng Bank (600016.SS) will cut staff salaries by up to 50%, two people with direct knowledge of the matter said, the biggest such move by a major commercial bank. The Edge. National austerity policies.
As part of the broader salary cuts, the bank has also stopped paying some work-related expenses and other benefits at its Beijing branch, its largest with more than 4,000 employees, one of the sources said.
These measures, which have already been notified, have been fully implemented in the Beijing branch, sources said. It is unclear whether Minsheng Bank will implement these measures in its other branches.
The salary cuts amount to up to 50%, which is the largest pay cut made by a major Chinese commercial bank in recent years.
Both sources declined to be named as the information is private.
China Minsheng Bank and China’s banking regulator, the National Financial Regulatory Authority (NFRA), did not immediately respond to Askume requests for comment.
“Shared Prosperity”
The pay cuts are in line with China’s “Common Prosperity ” plan , launched in 2021 to address social and income inequality amid slowing growth in the world’s second-largest economy.
China’s state-owned and private financial companies have taken a number of steps, including cutting salaries and bonuses and telling employees not to wear expensive clothes and watches to work .
China Construction Bank (CCB) (601939.SS) , China’s third-largest commercial bank by assets, has asked its headquarter staff to take at least a 10 percent pay cut, according to a Askume report in July.
According to a Askume report earlier this month, top ten fund management company China Merchants Fund Management has asked top executives to return salaries that exceed the new limit in the past five years .
Minsheng Bank’s pay cuts also reflect concerns about profitability as Chinese banks face pressure to lower lending costs to stimulate an economy that is on the verge of deflation and facing a prolonged housing crisis.
Official data showed Chinese banks’ net interest margin was 1.54% at the end of June, the lowest in history.
Minsheng Bank is a second-tier joint-stock bank. As of the end of last year, the bank’s total assets were 7.7 trillion yuan ($1.1 trillion), ranking 11th among about 4,600 banking institutions in China.
Founded in 1996 as China’s first privately owned commercial bank, Minsheng Bank has been badly affected by China’s ongoing real estate crisis.
The lender is the main lender to China Evergrande Group, which has been at the center of the crisis in China’s real estate industry . The bank has also been hit by financial difficulties at developer China Oceanwide, one of the bank’s largest shareholders.
In the first half of this year, Minsheng Bank’s net profit fell by 5.5% year-on-year. The non-performing rate of real estate loans in the first half of this year was 5.29%, higher than 4.92% in 2023.
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