Chinese banks trim jobs as online payments gather pace

BEIJING • Total headcount at China's four largest banks fell in 2016 for the first time in six years, as the lenders cut costs and tried to adapt their massive branch networks in the face of competition from online payment giants Ant Financial and Tencent Holdings.

Industrial & Commercial Bank of China (ICBC), China Construction Bank Corp, Agricultural Bank of China and Bank of China employed 17,824 fewer people at the end of last year, the first such drop since 2011, an analysis of their earnings filings last week showed.

The drop reflected, in part, the way banks are trying to trim the estimated three million people who work in their branch networks.

"The banks no longer need so many employees at branches because customers are no longer using that many banknotes for transactions, and Internet banking is so developed," said Mr Li Bin, an analyst at Capital Securities.

Even so, the banks are struggling to keep pace with the rapid changes in China's financial system, as Tencent and Zhejiang Ant Small & Micro Financial Services Group, an affiliate of Alibaba Group Holding, have eaten into their traditional businesses by providing more user-friendly payment services on mobile phones.

More than 84 per cent of banking transactions in China were completed outside brick-and-mortar branches last year, against about 63 per cent in 2013, according to the China Banking Association.

  • 3.8m

    Number of people who work for China's banks.

    80%

    Those who work as bank tellers in the branches.

About 3.8 million people work for China's banks, said the banking regulator. Some 80 per cent of them are tellers, according to an estimate in an April 1 report by Zhou Kunping and Li Ying of Bank of Communications (Bocom).

The army of tellers contrasts with the staff deployment at overseas banks, where 60 per cent to 80 per cent of employees are in marketing and sales, the Bocom analysts said. Most Chinese banks deploy only 20 to 30 per cent of their staff in those functions, they added.

ICBC, the world's largest lender with more than 16,000 outlets, reduced its number of branch tellers by 14,090 last year. The figures reflect staff cuts as well as redeployment of workers.

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A version of this article appeared in the print edition of The Straits Times on April 08, 2017, with the headline 'Chinese banks trim jobs as online payments gather pace'. Print Edition | Subscribe