VietNamNet Bridge – Vietnam’s restructuring banking industry is
moving ahead with plans to cut staff after initially announcing plans to cut
salaries and bonuses for their staff in the 2013 Lunar New Year.
An employee at the marketing
department of a Hanoi-based bank said the bank’s marketing department in the
south was ready to be dissolved though there is yet an official announcement.
A senior executive of the bank
told VIR that its profit plunged considerably last year. For this year, the
bank has forecast various difficulties, thus it is making plans to consider
cutting personnel in the coming months.
At another bank, a staff member
said the lender’s management decision was for those employees whose spouses
also work at the bank—that one of the two has to quit their working.
Cutting salaries and bonuses, and
even shrinking the labour force to cut costs, is no longer a big surprise at
commercial banks in Vietnam. However, an executive of a bank said in 2013, this
move would take place more often as the domestic banking sector still faces
many difficulties.
Some of the problems are
increasing bad debts - an obstacles against credit growth.
A deputy CEO of a major
commercial bank in Ho Chi Minh City said when facing difficulties, lenders
often thought of staff cuts because reducing salaries and bonuses were
inadequate.
“When salaries and bonuses are
cut down, the staff will not have enough inspiration to work. But staff cuts
will make the survivors strive more to avoid being fired,” said the executive.
Oriental Commercial Bank chairman
Trinh Van Tuan said his bank was also facing difficulties but had no staff cut
plans. However, the salaries and bonuses for the 2013 Lunar New Year, he said,
would not be as high as expected. The reason is the lender’s 2012 business
results were not as good as expected, with profits lower because the cost of
credit backups was increasing in line with increasing bad debts.
Another reason for personnel cuts
is Vietnam’s banking restructuring process, in which some banks are being taken
over by others.
Meanwhile, Ho Chi Minh City-based
ACB faced another problem. ACB deputy CEO Nguyen Thanh Toai said his bank had
to terminate labour contracts with employees on probation. ACB has trained them
for more than one year to serve its 2013 network expansion plans. However,
after a long time of waiting, ACB could not get a nod from the State Bank to make
the expansions.
“We really don’t want such
termination of the labour contracts because our bank also had some suffering
such as costs to train them and salaries for them,” he said.
ACB had plans to increase its
number of branches nationwide to 350 by the end of 2012 from 334 branches.
However, the State Bank discouraged ACB to set up new units amid difficulties.
Late 2012, some SeaBank staff
publicised anonymous letters saying that the lender was shrinking its labour
force. However, the bank’s management refuted the information and said it still
had plans to recruit more than 700 employees.
Source: VIR
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