Category: Banking & Financial Services

11/10/16

Permalink 10:58:33 am, by dacare, 315 words, 214 views   English (US)
Categories: News of China, Banking & Financial Services

China's finance industry embraces change


Bank of China chairman Tian Guoli speaks at the Bank of China - Bloomberg Global M&A Summit on Tuesday.

Mergers and acquisitions have accelerated the transformation of China's financial industry, according to leaders in the field.

Vice chairman and president of China Investment Corporation, Tu Guangshao told the Bank of China – Bloomberg Global M&A Summit on Tuesday that the sector was changing.

"The expansion from trade finance to acquisition finance will provide a strategic opportunity for development of the Chinese financial sector," Tu said.

"Acquisition finance requires financial institutions to adjust the content of services they provide, improve their product systems, increase the effectiveness of their organizational structures and put risk management well in place," he continued.

Zhu Min, former deputy managing director of the International Monetary Fund, said M&A is a crucial engine for post-crisis economic growth.

He said it will lead the global economy out of the gloom through supply-side restructuring.

In the first half of 2016, the volume of cross-border mergers and acquisitions led by Chinese buyers reached $149.2 billion, exceeding the total volume in 2015. The amount accounted for 23 percent of the total volume of global cross-border M&A, up from 6 percent in the same period last year, according to Tian Guoli, chairman of Bank of China.

"As the cross-border M&A by Chinese companies has entered a new stage, it is pushing forward the transformation and upgrading of China's financial sector," he said.

Bank of China has established an investment and loan linkage mechanism via diversified platforms and has 600 branches in 47 countries and regions.

"During the process of promoting industrial upgrade through cross-border M&A, Chinese companies should also pay close attention to potential risks to avoid shortsighted, irrational acquisitions that are seeking instant benefits," Tian said.

Certain M&A projects were overpriced and had problems with post-acquisition integration of businesses, he added.

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09/12/16

Permalink 10:59:41 am, by dacare, 478 words, 160 views   English (US)
Categories: News of China, Banking & Financial Services

Tens of Thousands of Jobs Go as China’s Biggest Banks Cut Costs

China’s four biggest banks 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 percent from the end of last year left 1.62 million workers at Agricultural Bank of China Ltd., Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd., earnings filings showed. Agricultural Bank, the No. 1 bank employer, saw its number of employees 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 Ltd. and DBS Vickers Hong Kong Ltd. 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 Polar Zhang, a Beijing-based bank analyst at BOC International. 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 & Co., HSBC Holdings Plc, JPMorgan Chase & Co. and Citigroup Inc., data compiled by Bloomberg show. Russia’s Sberbank PJSC is in the top five.
Economic Slowdown
Lenders from Citigroup to Deutsche Bank AG have 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’re 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 Ltd. eat into their businesses.
Chinese lenders have generally reduced numbers by not replacing staff who leave, according to Shujin Chen, a Hong Kong-based analyst at DBS Vickers Hong Kong. Workers are departing in search of better pay, she said, adding that banks would need less staff as artificial intelligence and online and mobile transactions played a bigger role and lenders developed robots that would interact with customers.
Besides a reduced number of workers, the first-half data also pointed to pressure on pay. The big four banks’ combined staff compensation costs -- including salaries, bonuses, allowances and post-employment benefits -- fell 2.6 percent from a year earlier. At the mid-sized China Minsheng Banking Corp., the decline was 22 percent.

Flat revenue and rising pressure on asset quality means “banks have been pushing even harder in cost optimization,” Wei Hou, a Hong Kong-based analyst at Sanford C. Bernstein & Co., wrote in a note.
— With assistance by Jun Luo

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09/09/16

Permalink 11:30:28 am, by dacare, 384 words, 175 views   English (US)
Categories: News of China, Banking & Financial Services, Comp, Salary & Benefit

Banking Layoffs Continue in China as Salaries Slashed in First Half

The departures come as the banking industry struggles against strong financial headwinds.

China’s biggest banks have eliminated thousands of jobs in the past six months to June 2016, as the nation’s banking industry, despite avoiding the huge fines for compliance breaches that weighed on their Western peers, has seen a challenging year amid a sluggish economy, lower interest margins and top-down financial reforms.

Big banks in China have announced almost 1.62 million new job cuts this year, and thousands more are expected, as the wave of lay-offs that began in 2013 shows no sign of abating.

So far, 10 out of the 16 listed mainland banks have reported a headcount drop. The top six listed banks, which reported their weakest profit growth in a decade, have cut a combined total of 34,691 jobs in the first half of the year, the semi-annual reports of the banks showed. This marks the biggest scale of employee departure ever recorded in China’s banking sector, which has expanded uninterrupted over the past 10 years.

Salaries are also going down
According to several media reports, many banks have been easing staff for different reasons, with China Merchants Bank scaling back the most, cutting 10 per cent of its workforce. Bank of China said its headcount at the end of June 2016 had decreased by 6,881 to a total of 303,161 employees. Agricultural Bank, the nation’s biggest bank employer, lost 4,023 staff while Industrial and Commercial Bank of China cut back by 7,635. China Construction Bank also shed 6,721 staff to 362,462.

Besides a reduced number of workers, salaries are also going down as Chinese banks’ profits slid 3.5 per cent on the year, while the four state-owned banks reported profit growth below one per cent. In addition, the first-half data showed that Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank reduced their salary expenses, including salaries, bonuses, allowances and post-employment benefits, by 1.6 percent, 2.9 percent, and 2.18 percent respectively.

Compensation structures are generally different in Chinese banks compared to their Western peers. For example, the average annual income for a mid-level banker can typically range between $100,000 to $125,000 while similar international counterparts offer more than double those salaries. They also offer longer holidays and fewer travel curbs, while Chinese staff can only get five days annual leave and must request approval from authorities before being allowed travel abroad.

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08/04/16

Permalink 10:58:07 am, by dacare, 314 words, 134 views   English (US)
Categories: News of China, Banking & Financial Services

KPMG listens to graduates and changes hiring process

Streamlining its recruitment processes for millennials makes good business sense for KPMG, as it proves the professional services firm has listened to feedback, says a spokesperson.

The comments come after news that KPMG has cut back on its recruitment processes for millennials, as Recruiter reported earlier this week. The firm has condensed its traditional three-stage recruitment process of first interview, assessment centre and final interview into a single day.

KPMG’s new streamlined approach, known as Launch Pad, also enables students to gain new skills, network with existing KPMG staff and partners, as well as their peers.

The firm’s move follows research carried out with market research company High Fliers Research that showed millennials were frustrated by lengthy recruitment processes (34%) and poor communication from their potential employer (43%), with over half complaining they did not receive any feedback when applying for a role.

A KPMG spokesperson told Recruiter in a statement it made good business sense for the firm to listen to views and feedback about graduate recruitment, and transform its practices to show graduates of all ages the firm listens to their feedback and adapts processes.

This is especially important, the spokesperson added, due to the “fierce” competition for the very best graduates, “even more so now big businesses are competing with smaller start-ups as well as their traditional competitors”.

The spokesperson said the new process provides more certainty to candidates about what will happen and when.

“Successful candidates will receive a job offer more quickly so that they can then focus on their studies and university life without needing to attend further interviews.

“There’s also the opportunity to learn a new skill. This will help them to determine whether KPMG is the right fit for them.”

The programme is being rolled out now for 2017 graduate trainees, while the firm will be running Launch Pad recruitment events around the country from October 2016.

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07/29/16

Permalink 01:37:44 pm, by dacare, 125 words, 195 views   English (US)
Categories: News of China, Banking & Financial Services

Insurers, banks post sharp drops

Shanghai stocks ended nearly flat yesterday, with falls seen in financial and insurance firms.

The Shanghai Composite Index edged up 0.1 percent to close at 2,994.32 points.

Banks were vulnerable following investor concerns that curbs on their investment in wealth-management products might restrict capital flow.

China Everbright Bank lost 1.55 percent to 3.82 yuan (57 US cents), and China Merchants Bank shed 1.32 percent to 17.14 yuan.

China Life Insurance Co fell 1.35 percent and Ping An Insurance Group lost 1.04 percent after the China Insurance Regulatory Commission said local insurers' combined profits plunged more than 54 percent in the first half due to lower investment return despite growing premium income.

Airlines gained as oil prices declined, with China Eastern Airlines adding 1.29 percent to 7.01 yuan and China Southern Airlines jumping 1.85 percent to close at 8.54 yuan.

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05/06/16

Permalink 01:48:25 pm, by dacare, 141 words, 1043 views   English (US)
Categories: News of China, Banking & Financial Services

Central bank drains 220 bln yuan from market

China's central bank drained 220 billion yuan (33.85 billion U.S. dollars) from the market this week to ensure stable money supply.

This follows a drain of 290 billion yuan from the financial system last week.

The People's Bank of China (PBOC) conducted 360 billion yuan in seven-day reverse repurchase agreements (repo) this week, a process in which central banks purchase securities from banks with an agreement to resell them in the future.

With 580 billion yuan's worth of repos maturing this week, the PBOC ended up draining a net 220 billion yuan from money markets.

On Friday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, was down by 0.1 basis points to 2 percent.

The Shibor for seven-day loans fell 0.3 basis point to 2.326 percent. The Shibor for three-month loans dropped 0.2 basis point to 2.894 percent.

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