CCB rules out lay-offs in shuffle
Mainland lender also pledges no salary cuts in integration of HK operations, which account for 70pc of overseas earnings
China Construction Bank said there would be no lay-offs and salary reductions following the integration of its Hong Kong branch into subsidiary China Construction Bank (Asia).
Eight more branches would be added in overseas markets on top of the current 10 branches and five subsidiaries outside the mainland, chairman Wang Hongzhang said.
In August 2006, CCB acquired Hong Kong's Bank of America (Asia), which then became a wholly owned subsidiary. It was then renamed China Construction Bank (Asia).
CCB (Asia) operated retail and commercial banking services, while the CCB branch provided corporate banking services.
From next week, staff and clients of the branch will be transferred to CCB (Asia). The branch will continue as an asset management arm.
"There will be no lay-offs and salary cuts after the integration of businesses," Wang said at the opening of CCB Centre at Kowloon Bay.
The centre will house the bank's back-office operations.
Staff of front-line departments will move to CCB Tower in Central, which will be opened in two months.
CCB International Securities will maintain its stand-alone brand and will remain responsible for the group's investment banking services.
Wang said Hong Kong had made a marked contribution to the group, with 70 per cent of its profits from overseas assets coming from the city.
He said CCB had maintained good momentum this year, and the integration in Hong Kong would boost the efficiency of its overseas businesses.
Andrew Hemm, the chief risk officer at CCB (Asia), said he did not expect a change of credit approval standards after the merger, and the credit quality at the branch was robust.
CCB (Asia) has 42 branches and a private banking centre in the city.
Wholly owned CCB (Macau) has eight branches in Macau.
Overseas operations and subsidiaries' loans and deposits contributed 6.9 per cent and 1.7 per cent, respectively, to the group, CCB said in its first quarter result.
Meanwhile, CCB said it had not stopped issuing new loans amid a tightening of credit in the country that had sparked reports some banks might be reining in lending, Reuters reported.
"The short-term panic of the credit crunch has eased," CCB president Zhang Jianguo said at the opening of the bank's first Taiwan branch in Taipei.
"CCB is operating smoothly. We are still capable of giving funds to other banks via interbank [loans]. We are not stopping giving out any new loans."
Mainland money market rates continued to moderate yesterday for a fifth consecutive day after the central bank declined to drain cash from the market. Despite the moderation, rates remained elevated and liquidity was tighter than normal, but the panic of a possible credit crunch that gripped the market last week had subsided, traders said.