China’s CITIC Securities is reducing the base salary of over 100 bankers at its offshore platform CLSA by 15 to 30 percent.
Sources said it is due to a decline in deal-making and pressure to narrow the pay gap with its onshore operations.
CLSA began informing its investment bankers about the immediate salary cuts, marking an unusual move in an industry where base pay is typically stable and bonuses fluctuate with market conditions.
About 110 bankers based in Hong Kong are affected by this decision, the sources said.
This is the first time a Chinese investment bank has reduced base salaries outside its home market.
This reflects the uncertain outlook for Chinese companies’ offshore deal-making activities.
Neither CLSA nor CITIC, headquartered in Beijing, responded immediately to requests for comment.
The move follows a similar reduction in base salaries by up to 15 percent across CITIC’s investment banking division in mainland China in June 2023.
Need Career Advice? Get employment skills advice at all levels of your career
This action aligns with Beijing’s directive to address income inequality within the financial sector.
Despite being part of the same banking group, offshore bankers typically earn 20 to 50 percent more base pay than their mainland counterparts.
Since July last year, CITIC has relocated dozens of bankers from CLSA in Hong Kong to the mainland.
The decision comes as international investors remain wary of Chinese deals due to a slowing economy and volatile markets, diminishing hopes for a rebound this year.
Major banks such as Bank of America, HSBC, and Morgan Stanley have also laid off dozens of their China bankers this year following rounds of job cuts in 2023.
Additionally, CITIC’s competitor, China International Capital Corp, reportedly plans to reduce its investment banking headcount by at least 10 percent this year, affecting more than 200 bankers.
