About 14,000 employees in the SAR's largest bank will probably face a salary freeze next year amid deflationary pressure in the territory. 'I think given what has already been said by various companies about what is going on in the economy in Hong Kong, it's most likely the salary will be frozen,' HSBC chairman David Eldon said. 'When you consider what has been said by the Hong Kong Chamber of Commerce and the Employers' Federation - they all recommended that in view of the economic situation and deflation in the market there will be no salary increase for next year.' His remarks echoed comments by the chief of the Hang Seng Bank, the SAR's second largest, that the whole private sector would probably face a salary freeze next year and mostly likely would not get a bonus this year. Hang Seng Bank chief executive Vincent Cheng Hoi-chuen said on Thursday that the bank would review whether to freeze salaries by the end of this year. Analysts have raised fears that Hong Kong is on the brink of its second recession in three years, saying the SAR's faltering economy has suffered particularly in its trade with the United States. On Tuesday, the SAR Government reported that unemployment in the third quarter rose to 5.3 per cent, and analysts expected higher in the fourth quarter. Mr Eldon said he could not guarantee the bank would not lay off staff, but said it would prefer to transfer them to other departments. In a bid to cut costs, HSBC has set up a data processing centre in Guangzhou with nearly 1,000 staff. It also plans to build a data-processing centre in Shanghai.