There are bank employees with a monthly salary of less than 1,000 yuan! In the long term: a temporary pay cut is a "good thing"

China Visit Network Finance

2024-05-24 10:42Published in Sichuan

Source: China Visit Network

Author|Yihang Studio

Unconsciously, bankers are also living a "tight life".

Recently, #银行员工降薪后工资到手不足1000元# and #半数银行人均薪酬下降#的话题登上热搜 have revealed the current situation of general salary cuts in the banking industry. According to the Financial Associated Press, an employee of a bank reported that the performance bonus of his department was "discounted" to varying degrees that month, which affected a wide range.

Are the financial elites starting to live a "hard life"? Why is there a pay cut?

Are there widespread pay cuts in the banking sector?

With the disclosure of the annual reports of 42 A-share listed banks, the remuneration of each bank in 2023 has also surfaced. Wind data shows that in 2023, among the 42 A-share listed banks, a total of 14 listed banks will see a decline in per capita salary, with the largest drop of 13.95%. On social platforms, many bank employees have also come forward to say that they have been "cut in salary".

Zhao, a customer manager at a local bank in western China, said that she had only received a salary of less than 1,000 yuan this month, while her salary had been more than 10,000 yuan before. The person in charge of the branch of a large state-owned bank also said that the assessment method has also been adjusted, and the adjusted assessment method is difficult to meet the standard, and if the target cannot be completed, the salary will be affected. According to Southern Weekly, an employee from the Bank of Shanghai said that the bank had also cut salaries.

In addition to the "wave of salary cuts", the "reverse salary bargaining" of many banks has also attracted market attention. In 2023, more and more banking institutions began to strictly implement the performance-based pay recourse clawback mechanism. A number of banks, including China Merchants Bank, Bank of China, Harbin Bank and Bank of Gansu, have announced the clawback of performance-based pay.

Among them, China Merchants Bank will have the highest total amount of "reverse salary claim" in 2023, with a total amount of 43.29 million yuan in recourse and clawback of performance compensation, and a total of 4,415 employees involved in the implementation of performance pay recourse and clawback. Bank of China and Bohai Bank also spent more than 10 million yuan on "reverse salary" last year, with 22.75 million yuan and 23.44 million yuan respectively. Is the environment really that tough?

It is true that many people have suffered salary cuts, but are there widespread salary cuts in the banking industry? Not necessarily. According to Southern Weekly, in 2023, more than half of the listed banks will increase their average salary compared to 2022. Among them, Ruifeng Bank rose the most, more than 10%. Behind the salary increase, it is naturally linked to performance. According to the data, the bank's operating income in 2023 will be 3.804 billion yuan, an increase of 7.90% over the same period last year; The net profit attributable to shareholders of the listed company was 1.727 billion yuan, an increase of 13.04% over last year.

From the perspective of per capita salary, it is just "some people are happy and some are worried". The per capita salary performance of large state-owned banks has been relatively stable, and most of the changes have been large for small and medium-sized banks.

The difficult environment behind the bank's salary cuts

Generally speaking, the core reasons for salary cuts in the banking industry are linked to the sluggish performance, which is closely related to the general environment. In recent years, the entire financial industry has faced severe market environment and competitive pressure.

One is because of the continuous decline in net interest margin income. According to the 2023 Review and Future Outlook of China's Listed Banks released by Ernst & Young, the net interest margin of listed banks in 2023 was 1.69%, which has been declining for four consecutive years and is 54 basis points lower than 2019 before the pandemic. Some experts said that the main reason for the narrowing of net interest margin is that monetary policy is loose, market interest rates have fallen and other factors, resulting in lower bank lending rates. For example, the adjustment of the interest rate of the first home loan has led to an increase in the cost of the debt side, which directly affects the profitability of the bank.

The second reason is that there has been a change in the tendency of residents to save. I believe everyone has brushed up on the news of the sharp rise in gold prices some time ago, because in the context of increased economic uncertainty and declining investment return expectations, residents are more inclined to invest their funds in more stable assets. Increasing savings is also a way to increase people's willingness to keep their money in banks, which has led to an increase in the size of bank deposits. However, the increase in deposits seems to be beneficial to the bank's source of funds, but if there are more deposits and loans cannot be released, the bank can only pay interest to depositors, which will raise the bank's interest payment cost.

Third, the uncertainty of the overall external environment has also reduced the profitability of banks, and factors such as sluggish global economic growth have also had an impact on the banking industry. The export-oriented economy has been impacted, and macroeconomic factors have led to a decrease in corporate credit demand, which has increased the pressure on banks' asset quality, which in turn has affected banks' profit performance.

However, in the long run, this is only an inevitable reaction to economic adjustment. As China's economy continues to recover and develop, the salary structure of the banking industry is expected to be gradually optimized to better serve the real economy and achieve high-quality development.

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