The market continues, with the construction bank taking the lead in proposing a “5321” wage reduction programme, namely, halving the number of executives, reducing the number of heads of department by 30 per cent, the number of heads of department by 20 per cent and a 10 per cent reduction in the salaries of employees, which is of great concern to the entire financial community。
On 1 september, president wang hong zhang and president zhang zhang made clear at the beijing and hong kong mid-report performance statements that there was no such thing! Wang hongzhang explained that the compensation reform programme under discussion at the central level mainly concerned the head of the financial firm and did not include ordinary employees. Zhang, for its part, denounced the rumours that it was “unsubstantiated” and stressed that the construction would maintain a stable remuneration for all employees。
By the end of june, the construction had achieved a net profit of $13,662 million for shareholders in parent companies, an increase of 9. 1 per cent over the same year, a six-month increase in the number of cash units, and an increase in the impairment of assets and loan provisions that had slowed down the profitability performance。
It is a matter of concern that deposits in the first half of the bank's life totalled $1295. 656 billion, a slight increase of only 6 per cent from the end of last year, that the rate of deposit growth began to decline in consecutive cycles at the beginning of last year, that the growth of deposits has been weak and that credit flows have been strained; and that 70. 93 per cent of the loan stock is higher than since the creation of the bank's share。
The bank's new chief finance officer, with the special benefit, indicated that the bank's plan would take two to three years to re-expand the base deposits of business clients, with a focus on extension of customer resources at network points, it networks and sectoral lines, with the goal of stabilizing the annual rate of increase in deposits at 7 to 8 per cent, commensurate with the rate of increase in loans。
According to zhang, the 9. 1 per cent increase in net profits has not been easy to achieve in the context of “two-center” of non-performing loans by commercial banks as a whole, and the profit growth of financial institutions has been a departure from the extraordinary cross-border growth, with increased provisions and the constant disposal of new non-performing loans, which is one of the main reasons for the decline in the rate of profit. With regard to deposits, he indicated that the pricing would be adjusted appropriately to increase the stable type of deposits, but that the lowest financing costs would be maintained throughout the industry。
Vice president: i'm not on the payroll
“the central pay reform is limited to state-appointed corporate executives, even i am not covered by the salary reduction.” in order to ease the panic of the construction workers, vice-president huang il-yu sought to clarify the rumours of salary reductions “in his own home”. He suggested to economic reporters in the twenty-first century that, in order to build codes of conduct, wage restrictions might involve only such principals as directors and governors。
“salary limits respond to high social concerns about the level of remuneration of the highest financial officials and are consistent with the tendency of countries such as europe and the united states to restrict the limited wages of senior managers, not exclusively in china. As to whether to accompany the implementation of large-scale equity incentive schemes, which are part of the adjustment of the system of income distribution, the construction of the bank follows closely the by-laws established by the central ministry.” huang yi stated that since he was not covered by salary reductions, let alone middle-level cadres and grass-roots staff, he would never affect the overall staff income。
Wang hong zhang is also eager to send “settling pills” to builders. He indicated that, in line with the request made at the 18th mid-third plenary session, the bank had proposed an overall orientation towards first-line staff, and that, in practice, the percentage increase in the remuneration of grass-roots staff was much higher than that of senior managers. He stressed that the current reform of the remuneration system for key officials did not include staff。
On 29 august, the central political bureau of the communist republic of china met to consider the adoption of the programme for the reform of the pay system for heads of centrally administered enterprises. A media report suggests that seniors'salaries in state-owned financial enterprises will be significantly reduced by about 30 per cent and that the cut will not exceed 600,000 yuan per annum; along with this, the five-year suspension of the financial state's equity incentive scheme for executives and employees will simultaneously launch the pilot。
In response, zhang stated that it had first experienced a transition of long-term equity incentive schemes and that it had taken the lead in building a collective employee equity scheme, which had worked well but on a modest scale, and that it would continue to study in depth the feasibility of a re-investment incentive mechanism in the future, in accordance with central reform rules. He disclosed that he had voluntarily waived the exercise of stock options in the course of his departure。
Three years of rebuilding savings growth
By reference to the bank's annual and semi-annual reports, total customer deposits have been increasing at a rate of between 4 and 6 per cent for almost six consecutive quarters since the first quarter of last year, particularly since the first quarter of this year, when the growth was the slowest, at 4. 4 per cent. In the mid-term appraisal, the rate of increase barely reached 6 per cent in six months, down from 7 per cent in the same period. In the long run, not only does the increase in deposits push up the ratio of loans, it may also constrain credit lending in the medium to long term。
“in the case of current deposits of enterprises, both the rate of increase and the total amount of deposits are declining, excluding the external factors facing the industry as a whole, mainly due to the structure of the bank's corporate deposit. In response to a question from economic reporters for the twenty-first century, it was frankly stated that the bulk of business clients ' deposits were project deposits in large businesses, that major projects were completed, that there was a lack of new growth momentum and that the company's deposits were not too sticky。
To that end, the bank launched an internal deposit-taking initiative as early as march 2013, with little success. According to the medium-term report, current deposits of corporate-type clients stood at $4020. 9 billion by the end of june, representing a decrease of approximately $14. 68 billion in the ring comparison; individual clients maintained positive growth。
According to wang hongzhang, deposits are growing at a slower pace, while the cost of servicing has also fallen. In recent years, there has been an overemphasis on the “deposit rise” flag, with time and daily averages dilution. The bank decided to take the lead in reforming the appraisal criteria, redefining the principle of daily savings and completely abandoning the appraisals。
Benevolence reveals that the bank's goal is to spend an additional two to three years adjusting the deposit structure of the enterprise's clients and to connect the offline points and product extension of the online network. For example, the bank is currently docking with highway billing companies in major cities, tying the contributory function to the bank's credit cards and bank cards, connecting retail and business clients, making large deposit networks and making deposits more sticky。
“it is no longer possible, however, to repeat the 10 per cent increase in deposits, and it is reasonable for the average annual 7-8 per cent increase to match the loan.”。
Responsible editor: zhang dei
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