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HONG KONG/BEIJING (Reuters) -China’s CITIC Securities is cutting pay across its investment banking division, lowering base salaries by up to 15%, two sources said, in a rare move in the country’s financial sector as Beijing pushes to bridge income disparity.
The country’s top investment bank by market value has also yet to pay bonuses to bankers for work done last year, the two sources close to the matter said. The bonuses are usually paid out early in the second quarter.
The move comes as the bank and its peers in China are bracing for slower dealmaking, weaker trading, and Beijing’s “common prosperity” campaign that seeks to root out the lavish lifestyle of the financial elite.
All the sources declined to be named as they were not authorised to speak to the media.
CITIC Securities did not immediately respond to a request for comment.
CITIC Securities on Monday informed staff it would lower basic salaries of some of its junior to mid-level bankers by 6,000 yuan ($842.78) to 10,000 yuan per month, one of the two sources and a separate source said.
The reduction in basic salaries could be as much as 20% in some cases, one of them said.
China’s well-heeled financial dealmakers over the past year have been getting a crash course in austerity with pay cuts and perks reined in as their state-owned employers respond to the “common prosperity” drive.
CITIC Securities’ domestic rival China International Capital Corp (CICC) last month cut this year’s bonuses for investment bankers by 30%-50% from a year earlier, said two separate sources with knowledge of the matter.
Reuters first reported in April, citing sources, that dealmakers at CICC would see bonuses slashed by as much as 40%, in one of the financial sector’s biggest cuts in two years.
CICC did not immediately respond to a request for comment.
China’s Central Commission for Discipline Inspection (CCDI) in February, vowed to eliminate notions of a “financial elite” and “parity with the West” as well as hedonism and the excessive pursuit of “money only” and “high-end taste”.
Besides remuneration cuts, some investment banks have asked staff to avoid displays of wealth such as uploading photographs to social media of expensive meals or overseas trips, industry sources have said.
(Reporting by Julie Zhu and Selena Li in Hong Kong and Roxanne Liu in BeijingEditing by Louise Heavens, Kirsten Donovan)