China's Big Four banks slash headcount

BEIJING • China's four biggest banks have reported that staff numbers fell by the most in at least six years in the first half, highlighting the possibility that employment has peaked at the firms that are the world's biggest providers of banking jobs.

A decline of 1.5 per cent from the end of last year left 1.62 million workers at Agricultural Bank of China, Industrial & Commercial Bank of China, China Construction Bank and Bank of China, earnings filings showed.

Agricultural Bank, the No. 1 bank employer, saw its number of staff slip below half a million.

While a fall in the first half is not unusual, the 25,000-job decline is the biggest since at least 2010 and analysts at firms including BOC International Holdings and DBS Vickers Hong Kong say changes to how banking is done will limit prospects for increases.

"Chinese banks went through years of expansion, adding physical outlets that helped to push their staff numbers to a peak," said BOC International analyst Polar Zhang.

He expects the workforce to "dwindle" on technological advances and cost-cutting.

Chinese lenders take four of the top five slots for employment by listed banks around the world, ahead of the likes of Wells Fargo, HSBC Holdings, JPMorgan Chase and Citigroup, data compiled by Bloomberg shows.

Russia's Sberbank is in the top five. Lenders from Citigroup to Deutsche Bank have also cut staff and costs in revamps since the global financial crisis.

While Chinese banks have avoided the multi-billion dollar fines for compliance breaches that have weighed on their international counterparts, they are under pressure from an economic slowdown and a rising quantity of bad loans.

Margins are falling as the government deregulates the industry and online and mobile players like Zhejiang Ant Small & Micro Financial Services Group - also known as Ant Financial - and Tencent Holdings eat into their businesses.

Chinese lenders have generally reduced numbers by not replacing staff who leave, said DBS Vickers Hong Kong analyst Chen Shujun.

Workers are departing in search of better pay, she said, adding that banks would need fewer employees as artificial intelligence and online and mobile transactions play a bigger role and lenders develop robots that would interact with customers.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 08, 2016, with the headline 'China's Big Four banks slash headcount'. Print Edition | Subscribe