China’s top investment bank CITIC cuts base salary by up to 15% -sources

HONG KONG/BEIJING, June 5 (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
authorized 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 Beijing
Editing by Louise Heavens, Kirsten Donovan)