China's biggest state-owned banks retrenched thousands of staff members as the country's banking industry faced its most challenging year amid a slowdown in the world's second biggest economy. The top four national banks, which reported negative to flat net profit growth for the first half of this year, reported a combined total of 22,260 jobs that have been eliminated, Hong Kong-based South China Morning Post reported.
The redundancies are a cause of major concern because total staff employed by the banking sector was reached a peak of 1.87 million at the end of 2015. As the economic slowdown continued, China has already announced that its plans to cut over-capacity in the steel and coal production could result in 1.8 million job losses. The 2.3 million strong Chinese military too is set to retrench three lakh personnel by next year.
China's banking industry is one sector bearing the brunt of the country's economic slowdown, which has resulted in profits at major lenders slowing and the bad loan ratio climbing. Unofficial media reports said Chinese banks' profits slid 3.5 percent on the year.
In the first three quarters last year, China's big four state-owned banks all reported profit growth below one percent, according to a report by state-run Xinhua news agency. Many banks have been easing staff under different categories terming retrenchments as human resources reform Bank of China said its headcount at the end of June 2016 has decreased by 6,881 to a total of 303,161 employees, compared to the end of 2015.
Agricultural Bank of China lost 4,023 staff, bringing its total to 499,059 while Industrial and Commercial Bank of China cut back by 7,635 to 458,711. China Construction Bank also shed 6,721 staff to 362,462. The four banks are the nation's biggest banking sector employers. The trend is mirrored in the second-tier joint stock banking sector, the Post report said.