(Yicai Global) Aug. 10 -- Salaries paid to senior managers at five leading Chinese banks almost halved last year, causing many of them to abandon the state-run sector for better offers by private banks and internet finance companies. This has led to a high turnover rate among senior bank managers this year.
Many senior managers have resigned from the state-run banking system, indicating that these banks should offer them greater scope for development and salaries in line with the going market rate, Mr. Dong Ximiao, executive director at the Research Institute of Hengfeng Bank, said.
Newly-established private banks such as Chongqing Fumin Bank, Sichuan Hope Bank and Hunan Sanxiang Bank have no qualms about poaching managers from traditional banks.
An increase in senior management vacancies is also attributable to many bankers reaching retirement age, some being removed from office during the crackdown on corruption and some being promoted to financial regulatory positions.
Most of these vacancies have been filled through internal promotions. This is a preferable solution as it ensures consistency. Internal selection is more cost effective, and the candidates can easily integrate into management activities, Dr. Zeng Gang, director of the Banking Research Office, Institute of Finance, Chinese Academy of Social Sciences, said. Eight new appointments this year were former managers or deputy managers of local bank branches.
There is also the emergence of a younger, post-1970s generation of senior bank managers. The vice president of the Agricultural Bank of China, Mr. Guo Ningning, was born in 1970. Young managers are better at identifying new profit drivers in emerging businesses, but they also tend to pay less attention to risks, Dr. Zeng said.