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Chinese banks constrain their hiring as profits fall

Profits at big Chinese banks are in decline and firms are being more selective about recruitment, but they are still seen as providing stable careers.

Here’s a quick summary of what you should know:

  • The total earnings of China’s five biggest banks – Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China and Bank of Communications – increased 13 per cent to 203.6bn yuan in Q2, compared with 33 per cent in the same quarter last year.
  • Reduced growth at these firms comes amid a climate of weaker economic expansion and bad loans. The mainland’s economy expanded 7.6 per cent in the second quarter, its lowest rate in three years.

Not immune

Hiring at Chinese banks certainly isn’t immune to the falling profits as firms exercise greater prudence in their recruitment decisions. Fabrice Isnard, manager, banking and financial services, Robert Walters, Shanghai, says: “Most financial recruitment is for replacement roles. With new headcount, firms are more cautious and selective; headquarters also tightly monitors these approvals.”

Simon Lance, regional director, China, Hays, is already seeing a decline in demand for recruitment in sectors like retail banking, wealth management, trade finance, and project financing for property developers. And if profitability continues to decline, support functions in operations could also be affected, says Isnard.

Still stable, even if there’s less profit

The recruitment decisions of Chinese firms, however, won’t be based solely on profit margins, says Lance. “The big four Chinese banks have healthy budgets with good graduate career paths, so I’m not anticipating large reductions. In fact, some candidates view these mainland firms as being more stable employers compared with some of the foreign banks.”

Chinese candidates aren’t adjusting their expectations for hefty pay increases just yet. Lance says: “Candidates still face a lot of pressure from their families and peer group to constantly progress in terms of salary and job title. I see that changing as they start to value stability and career progression in time to come.”

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