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Source: Southern Weekend
Recently, with the news that the performance bonus of employees of a large joint-stock bank headquartered in Shenzhen has been significantly "discounted", the pay level of the banking industry, which has attracted much attention, has again aroused heated debate. After entering the era of the lowest interest margin in history, the banking industry, which is known as the "golden rice bowl", is generally slashing wages?
The South Weekend New Financial Research Center has studied and analyzed the annual report data of 42 listed banks, and found that with the increase of risk exposure and the gradual improvement of the salary recovery mechanism during the economic downturn, the "reverse wage" team in the banking industry is indeed growing. However, the salary level of each bank closely related to the business performance shows a differentiation pattern of ups and downs, and there is no industry wide salary cut hyped by the outside world.
When the salary level of the banking industry leaves the trend of "unilateral rise", employees in different institutions and positions have different feelings. Nearly 10 employees of different types of banks in different positions confirmed the above conclusions when they accepted the survey of the Southern Weekend New Financial Research Center. A person from the head office of a joint-stock bank told the researcher of the Southern Weekend New Financial Research Center that as a "barometer" of operating performance, salary increases and decreases are market behaviors, and there are differences in the amount of compensation in different regions and business departments, so the theory of "salary cuts" in the full sense is not true. A person from the management of a city commercial bank said that as the net interest margin continued to decline, the industry's wage cut trend under the stricter performance appraisal method would probably not stop in recent years. In this trend, the "financial elite" will gradually fade out of people's vision.
The team of "reverse salary seeking" is lengthened
The performance pay recovery and deduction mechanism (hereinafter referred to as "reverse pay recovery") is a new term emerging in the reform of the banking pay system in recent years. Specifically, if the practitioner has violated laws and regulations, or has excessive exposure to risk losses within the scope of responsibility, the bank can partially or fully recover the performance pay that has been paid to him within the corresponding period, and stop paying the part that has not been paid.
The South Weekend New Financial Research Center investigated the annual reports of 42 listed banks for 2022 and 2023, and found that in 2023, the number of banks that disclosed the relevant data of "reverse wage recovery" (including the total amount of recourse, the number of wage recovery people, etc.) has increased from three years in 2022 to seven. The corresponding figures also showed a trend of "rising tide", with more than 7400 people "recovered" more than 100 million yuan, up 157% and 44% respectively year on year.
The new disclosers are BOC Huaxia Bank 、 Chongqing Rural Commercial Bank and Concord Bank 。 Among them, the first three disclosed the data of "amount of recourse" and "number of wage chasers", while Ruifeng Bank only disclosed one of them. Vertical comparison, CMB Bank of Shanghai And Shanghai Rural Commercial Bank have disclosed relevant data for two consecutive years; Seen from the completeness of information disclosure, CMB is superior, and has completely disclosed two data for two consecutive years. The latter two companies only disclose the "amount of recourse". In 2023, the largest amount recovered will be CMB (43.29 million yuan), followed by BOC (22.75 million yuan) and Huaxia Bank (8.2 million yuan).
The completeness of market entities' disclosure of relevant information reflects their implementation of relevant systems.
The above-mentioned management of the head office of the joint-stock bank explained to the researchers of the Southern Weekend New Financial Research Center that the relevant departments had successively issued documents for guidance. In 2021, the former China Banking and Insurance Regulatory Commission stipulated in its Guiding Opinions on Establishing and Improving the Performance Compensation Recourse Deduction Mechanism of Bancassurance Institutions (hereinafter referred to as the "Guiding Opinions") that the scope of application of the recourse deduction mechanism includes senior managers, personnel in key positions and retirees in corresponding positions, and gave a guiding description of the trigger mechanism of recourse deduction, It covers four different situations that can be and should be pursued. Since then, all banks have improved their internal control system accordingly; In 2022, the Ministry of Finance issued the Notice on Further Strengthening the Financial Management of State owned Financial Enterprises (hereinafter referred to as the "Notice"), emphasizing the relevant systems.
The above people believe that for financial institutions, "guidance" and "notice" are more guidance at the direction level. Financial institutions, including commercial banks, need to determine the scope of "key positions" according to their own operations, and more clearly define the "major risk accidents" in the mechanism triggers. From this point of view, there is more or less room for agencies to operate in the implementation of the "reverse wage" system. At present, "reverse wage" mostly appears in the credit field. For example, when the project handled by the employee has a high degree of non-performing, the bank will make corresponding accountability according to the risk identification. In this process, the identification of risk responsibility is also subjective.
The Southern Weekend New Financial Research Center believes that the "reverse wage" of banks means that their internal risk management and incentive and restraint mechanisms are gradually improving. Although information disclosure cannot be equated with whether to trigger the implementation of the relevant mechanism, it is also one of the survey criteria for the perfection of the internal control mechanism to reflect the banking institutions' attention to the relevant provisions. However, only 7 of the 42 listed banks disclosed relevant data. Under the dual background of stricter regulation and economic downturn, the number of banks joining the "reverse wage" will continue to increase.
Ruifeng Bank has the highest salary increase
With the trend of "reverse wage seeking" in the banking industry, is it common for the banking industry to cut wages?
The South Weekend New Financial Research Center found that in 2023, the per capita salary of more than half of the listed banks will increase from 2022.
Among the 38 listed banks with complete data disclosure, 25 banks achieved different increases in per capita salary. Among them, Ruifeng Bank rose the most, about 12%; Followed by BANK OF QINGDAO (8.45%) and Zhangjiagang Branch （8.31%）。
Among the 13 salary cut banks, the biggest year-on-year drop in per capita salary was Bank of Shanghai (- 13.95%). Followed by CITIC Bank (-8.65%) and CCB (-4.64%).
From the perspective of organization type, except CCB, the per capita salary of five state-owned banks has increased. The highest increase was Bank of China (6.68%); Stock firms and city firms show the trend of "half seawater, half flame" rising and falling; Among the 10 listed agricultural commercial banks, the average per capita salary of 9 agricultural commercial banks that disclosed data rose across the board, and the average increase was higher than that of state-owned banks and joint-stock banks.
From a horizontal comparison of per capita salary, in 2023, there will be 8 listed banks with per capita salary of more than 500000 yuan, respectively Bank of Jiangsu 、 Industrial Bank , CITIC Bank Bank of Nanjing 、 Bank of Hangzhou 、 Bank of Ningbo , Shanghai Rural Commercial Bank and Minsheng Bank 。 Among them, urban agricultural commercial banks account for 5 seats in total, and their locations are all in the Yangtze River Delta. Another three are joint-stock banks, and state-owned banks have not been found.
What is the bottom logic of salary rise and fall in different banks? The Southern Weekend New Financial Research Center, based on the above ranking of increase and decrease, selected Ruifeng Bank and Bank of Shanghai with the largest increase and decrease as samples for case analysis, and found that business performance and financial status were positively related to salary increase and decrease.
According to the key data in the annual report, in 2023, Ruifeng Bank, with Shaoxing as the main position, will achieve a double increase in revenue and net profit, and the two increases will lead the listed banks. The year-on-year growth of total assets and liabilities of Ruifeng Bank exceeded 20%, and the expansion rate was higher than the industry average (about 11%); The net interest margin was 1.73%, which was narrower than that in 2022, but still higher than the industry average of 1.69% in the same period disclosed by the State Administration of Financial Supervision and Administration. After this salary increase, the average salary of Ruifeng Bank is about 370000 yuan, which is the same as that of Wuxi Bank and Zijin Bank The average salary level of rural commercial banks is similar.
In contrast, the revenue of Bank of Shanghai in 2023 will decrease by about 5% year on year, and the net profit attributable to the parent company will increase by only about 1%; The net interest margin is only 1.34%, which is far lower than the average of 1.77% of the listed urban rural commercial banks measured by PricewaterhouseCoopers, and also has a large gap compared with the industry average of 1.69%; The service charge and commission income decreased by more than 20% year on year. At the same time, the non-performing loan ratio of Bank of Shanghai reached 1.21%, higher than the average of listed city commercial banks (1.08%) measured by Ernst&Young over the same period.
It is found by comparison that although it is the same as the Yangtze River Delta region, Ruifeng Bank and Bank of Shanghai still show different development trends due to differences in business strategies and operational levels. It can be seen from this that geographical advantage is only one of the external factors on which the banking industry relies. A senior banker said that at present, the Bank of Shanghai still relies on traditional deposit and loan business for its revenue, and is still lacking in the "second growth curve" against the counter cyclical trend. Under the downward trend of interest rates, revenue growth is naturally hindered.
A person close to the Bank of Shanghai disclosed to the researcher of the Southern Weekend New Financial Research Center that the salary cut of the Bank of Shanghai is no secret in the industry. In recent years, the annual salary of the person in charge of the business department of a branch in a first tier developed city of the Bank has shrunk significantly compared with that before, even lower than the per capita salary level (about 430000 yuan) published in the annual report. In good years, people with the same position will get an annual salary of more than one million yuan.
A similar conclusion can be reached by extending the sample to all listed banks. The Southern Weekend New Financial Research Center compared the revenue growth and per capita salary growth of 42 listed banks in 2023, and found that the two indicators of many listed banks showed an obvious positive correlation trend. In this regard, another senior banker believed that, unlike other operating indicators, revenue directly reflects the operating capacity of the banking industry in major business areas such as net interest income, commission fees and financial market investment. The salary trend echoes this indicator, which shows that commercial banks follow the business oriented principle in formulating salary standards.
Multi banks cut executive pay
At the time of per capita salary differentiation in the banking industry, what changes have taken place in the pay of bank executives concerned in the notes?
The South Weekend New Financial Research Center, taking 20 systemically important banks with relatively complete data disclosure as a sample, found that in 2023, the "annual salaries of chairman, chief supervisors and senior managers" of 12 banks will be reduced. Among them, Bank of Nanjing saw the largest decline (28.14%), followed by Minsheng Bank (17.53%) and Bank of Jiangsu (17.2%).
In the sequence of "annual salary increase of chairman, chairman of the board of supervisors and senior managers", the broadest circulation rate is about 18%. Followed by Bank of Communications (14.89%) and Bank of Ningbo (8.87%).
The above senior bankers said to the Southern Weekend New Financial Research Center that, in addition to business performance, the changes in executive compensation are also affected by factors such as recourse deduction and deferred payment. These two factors are related to bank risk management and asset quality. At the same time, the reduction of executive pay also reflects the bank's sincerity in implementing the relevant provisions that pay more to grass-roots employees. In addition, in terms of overall income, compensation is only one form of remuneration for executives, and many bank executives also hold shares of the Bank.
Therefore, the compensation level of bank executives is affected by multiple factors, and its positive correlation with performance indicators such as revenue is weaker than that of per capita compensation. From the perspective of the overall trend in 2023, among the 20 systemically important banks, the proportion of banks that cut executive compensation is relatively large, which fits in with the background of economic downturn and stricter regulation.
Bank of China The analysis report 2023 of China's listed banks recently released by the industry association pointed out that the compensation incentive mechanism for directors and executives of commercial banks is a key component of corporate governance mechanism and has an important risk control function. From a comprehensive view of the executive compensation of different types of banks over the years, we can draw two conclusions: first, in terms of the amount of compensation, the executive compensation of joint-stock banks is the highest, followed by urban commercial banks, agricultural commercial banks and large banks; Second, in recent years, with the increasingly fierce competition in the banking industry, the salary trend of senior executives of large banks is opposite to that of other three types of institutions. To some extent, it reflects that large banks are in a superior position under the pattern of industry differentiation.
Banking remuneration still has advantages
What are the means of salary increase and decrease in the banking industry? Is the bank's salary still competitive after the salary cut?
A number of bankers told researchers at the Southern Weekend New Financial Research Center that there are many ways for banks to reduce costs. For example, cost reduction can be achieved by adding performance assessment indicators (KPIs), suspending promotion channels for posts outside marketing, and improving the linkage coefficient between risk assets and performance bonuses. In fact, the cost income ratio of many banks has increased year by year under the bad industrial environment. This means that banks need to pay a greater price to achieve the same business objectives.
The South Weekend New Financial Research Center calculates the average cost income ratio of 42 listed banks from 2021 to 2023, which can support the above view. Data shows that by the end of 2023, the cost income ratio of listed banks will exceed 30%, and still show an upward trend. For investors, a lower cost income ratio means that enterprises have better operational efficiency and cost control ability.
The head of the business department of the first tier city branch of a joint-stock bank said that although the rumors about the "discount" of a bank's salary had been bubbling up recently, the reaction of the industry to this matter was relatively flat. It is a common practice for banking departments to distribute remuneration according to performance. When the performance is good, pay more; When the performance is poor, the salary will naturally shrink. The size of the rise and fall reflects whether the incentive mechanism of each bank is radical or conservative.
Another head office manager of the joint-stock bank said that as a pro cyclical industry, the bank's operating performance is closely related to the level of national economic development. In the economic downturn cycle, it is normal for the banking industry to reduce its revenue and the corresponding salary reduction. In addition, in view of the decentralization and diversification of banking operations, there are also differences in the salary payment of different business departments or branches of the same bank, and the unilateral "salary cut" theory is not tenable.
The person also said that the regulators have been concerned about the salary structure of the financial industry for a long time. The Notice of the Ministry of Finance on Further Strengthening the Financial Management of State owned Financial Enterprises issued by the Ministry of Finance in 2022 requires that financial enterprises should strengthen the salary preference for front-line employees and grass-roots employees, and reasonably control the post distribution gap; Re emphasize the recourse and deduction mechanism for senior executives and key positions. Its purpose is to strictly enforce financial discipline and rectify financial order. Under this policy, the salary of the management of financial enterprises may continue to be adjusted, and the statement of "financial elites" in earlier years may no longer be mentioned.
Researchers from the Southern Weekend New Financial Research Center investigated the grass-roots business staff of three different banks at the same time and learned that only one bank's corporate business post salary level has shrunk by about 20%. The employee said that the marketing expenses of grass-roots marketing posts were paid by the head office, and the amount of marketing expenses was linked to the overall operating performance of the bank. The marketing cost is not much, and the business is difficult to do, so the money you get is naturally less.
Employees of two other bank branches said that they did not feel the salary cut, but the performance appraisal has become more and more "voluminous" in recent years. Under the industry trend, resource mining and realization become more and more important.
Compared with other industries, how competitive is the salary level of banks after the salary cut?
According to the latest data released by the National Bureau of Statistics, in 2023, the average wage of the financial industry will be 197000 yuan, with a year-on-year growth of 13.4%, which is the highest among a number of industries. It is also the only industry in the urban non private sector whose growth rate exceeds 10%. The per capita wage level is second only to "information transmission, software and information technology services".
The Southern Weekend New Financial Research Center believes that under the background that the industry has entered the era of meager profits and regulators have paid attention to regulating financial discipline, the salary structure of the banking industry will show the following two trends: differentiation based on the consideration of indicators such as operating performance and asset quality. In the situation of limited industry resources and numerous competitors, only those with excellent performance can obtain more labor remuneration. This is also consistent with the internal logic of banks' strengthening performance appraisal. At the same time, salary payment will be further tilted to grass-roots employees. This practice is not only conducive to encouraging the business orientation of banks, but also conducive to the rectification of the industry atmosphere.
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