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PING An Bank is relocating more than 100 staff based in Shanghai to its Shenzhen home base to cut costs as China’s banking industry struggles with profitability.
The lender last week notified all its retail business and information technology staff who currently report to its headquarters that they need to move to the bank’s hometown due to cost control and profitability considerations, according to sources familiar with the matter.
Those who do not accept the offer would need to leave the bank, getting paid out based on performance, the sources said, asking not to be named discussing private information. It’s unclear how many employees will agree to relocate, but more than 100 people will be affected by the plan, the sources added.
Ping An Bank’s fixed income, currency and commodities trading business will remain in Shanghai, the sources said.
Ping An Bank said that the bank recently made some changes and adjustments to the working locations of a small number of employees and that it will ensure stable and continuous business operation, while effectively protecting the legitimate rights and interests of employees.
The bank has been overhauling its retail business since 2022 amid a rise in bad loans and as the economy has struggled. The operation, which includes consumer lending and credit cards unit, contributed to just 11.9 per cent of the group profits last year, compared with 43.6 per cent in 2022.
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The move comes as the US$66 trillion financial industry has fallen under tighter Communist Party control, with banks and brokerages slashing pay and other perks.
China’s economy is struggling to regain momentum as confidence has cratered among domestic consumers and international investors. Banks have been urged to step up lending, but demand is weak for new credit.
Combined profits at China’s commercial banks rose 0.7 per cent in the first quarter, according to official data. Outstanding bad loans climbed to a record 3.37 trillion yuan.
Ping An Bank shares have gained almost 6 per cent in Shenzhen this year, outperforming the 4.2 per cent increase in the CSI 300 Financial Index. BLOOMBERG
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