Banks to continually cut costs to aid COVID-19 affected firms

The State Bank of Vietnam (SBV) has asked banks to further reduce operating costs in the remaining months of the year in order to continue lowering interest rates to support COVID-19 affected firms and individuals.

banks to continually cut costs to aid covid-19 affected firms hinh 0
Transactions at VP Bank (Photo: VP Bank)

Under a directive released late last week, the SBV said banks must also cut salary, bonus and profit to further reduce the net lending interest rate for both existing and new loans, which it expected to contribute to the recovery of local production and business in the post-pandemic period.

As the COVID-19 pandemic remains unpredictable, banks have been also directed to promptly update official information on new developments of the pandemic to proactively formulate and apply appropriate response scenarios to ensure the banking system, especially the information technology and payment units, operate safely and smoothly.

Many banks have recently planned to stop recruiting and lower staff salaries to save costs. Vietnam Prosperity Commercial Joint Stock Bank (VPBank) in the first half of the year cut more than 4,200 employees. VPBank’s general director Nguyen Duc Vinh said at the bank’s annual general meeting that the bank would strive to restructure, cut costs and increase productivity this year.

Similarly, at Military Commercial Joint Stock Bank (MB), the workforce was cut from 15,691 to 14,969 people.

Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) also reduced its workforce, restructured its apparatus, and cut nearly 600 employees in the first half of this year to nearly 18,640.

For Tien Phong Commercial Joint Stock Bank (TPBank), after increasing the number of employees in the first four months of 2020, the bank said it would stop recruiting new employees and not increase salaries for employees this year. In the current difficult context, it was necessary to reduce costs and increase productivity in order to meet the development needs.

Representative of Petrolimex Group Commercial Joint Stock Bank (PGBank) also said that the bank would not recruit more staff in 2020 and would restructure its existing inefficient transaction offices.

Saigon Hanoi Commercial Joint Stock Bank (SHB) said leaders and senior officials of the bank had reduced their salaries by 50% voluntarily until the announcement of the end of the pandemic.

Since April, HCM City Development Commercial Joint Stock Bank (HDBank) has also lowered business salary by 10-25%, applicable to employees with a total salary of VND10 million monthly or more, to cope with the complex situation of the pandemic.

According to the second quarter recruitment report for middle and high-level personnel in the Vietnamese market released by headhunters firm Navigos Search, banks are still in the process of reviewing operating costs, leading to the fact that recruitment demand has slowed down and has not shown signs of resuming, particularly for the high-level personnel segment.

VNS/VNA