Chinese bank cuts main office salaries as economy slows

China Construction Bank Corp (CCB), the country’s second-largest lender, is cutting salaries at its headquarters. Employees face a minimum 10 per cent pay cut, with higher-ranking officials seeing larger reductions, sources say.

This reflects the challenges faced by Chinese financial institutions in a sluggish economy. Banks are under pressure from two sides: government directives to provide cheaper loans and stimulate growth, while loan demand itself remains weak.

The situation is further complicated by China’s “common prosperity” drive, which aims to reduce wealth inequality. This has led financial institutions, both state-owned and private, to implement cost-cutting measures.

CCB’s move follows similar actions taken by Bank of China last year, which implemented a nationwide programme to reduce salary gaps between employees and mid and high-level management.

CCB did not respond immediately to a request for comment from Reuters.

Attribution: Reuters