BEIJING (Reuters) – China Construction Bank Corp (CCB), the nation’s second-largest commercial bank by assets, has asked employees at its headquarters to take a pay cut of at least 10%, two sources with knowledge of the matter said on Monday.
Higher-ranking officials will take a steeper cut in salaries, one of the sources said. Both sources declined to be named as the information is confidential.
Salary cuts at most of CCB’s subsidiaries have been deeper than those taken by the staff at its headquarters, however, some of its better-performing businesses have restricted the pay cut to a single-digit percentage, the source said.
CCB did not immediately reply to a Reuters request for comments.
The belt-tightening at CCB underscores the challenges Chinese financial firms are facing in a slowing economy. Chinese banks are under rising profitability pressure as they are nudged to provide cheaper loans to stimulate the faltering economy, while loan demand remains weak.
China has also pushed ahead with its “common prosperity” drive, with the nation’s top graft-busting watchdog vowing to eliminate ideas of a Western-style “financial elite”.
That has spurred many financial firms, both state-owned and private sector, to take measures such as cutting salaries and bonuses, and asking staff not to wear expensive clothes and watches to work.
Bank of China Ltd launched a countrywide exercise to reduce the salary gaps among its employees and mid- and high-level managers, Reuters reported in August 2023.
(Reporting by Beijing Newsroom; Editing by Anil D’Silva)
