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Bank Of China Says It Would Keep Headcount And Salaries Steady To Help Staff Pull Through Hong Kong's Worst Economic Slump

The bank's 2019 net profit rose 4.3 per cent to HK$34.07 billion at its slowest annual growth in three years Net interest income grew 8.4 per cent to HK$43.1 billion on the back of improving net interest margin and growth in average interest-earning assets

Bank Of China Says It Would Keep Headcount And Salaries Steady To Help Staff Pull Through Hong Kong's Worst Economic Slump

Bank of China (Hong Kong) Limited, a victim of vandalism and arson during the city's anti-government protests last year, said it would keep headcounts and salaries steady to help its 14,668 employees survive the global economic slump caused by the coronavirus pandemic.

"We will not lay off anyone, or freeze salaries at this difficult time," said the bank's vice-chairman and chief executive Gao Yingxin, during a press conference. "We are very grateful to all of our employees in the past year when our bank was hit" by the city's protests, he said, adding that salaries will be raised in line with business and market conditions.

The bank, one of Hong Kong's three currency issuers, had to shut dozens of branches and outlets in the city last year after radical protesters vandalised and set fire to its premises and automated teller machines. The loss of business from its closures, combined with a general slump in business sentiment caused by the year-long US-China trade war, weighed down on the bank's earnings.

The bank's 2019 net profit rose 4.3 per cent to HK$34.07 billion at its slowest annual growth in three years. Net interest income grew 8.4 per cent to HK$43.1 billion on the back of improving net interest margin and growth in average interest-earning assets, the bank said. Total deposits by customers increased 5.9 per cent to HK$2 trillion while loans expanded 10.2 per cent to HK$1.4 trillion.

"The overall market environment will remain extremely challenging, as the [coronavirus] pandemic becomes a key factor affecting the global economy," Gao said. "It has also taken a toll on Hong Kong."

The coronavirus has sickened more than half a million people around the world, and claimed 23,000 lives at last count. Hong Kong's number of confirmed cases recorded their biggest daily jump to 453 cumulative afflictions, with four deaths.

The deteriorating has compelled banks - many of them major employers in financial centres around the world - to dig deep to protect employees. HSBC, the largest bank in Hong Kong, said it would pause its global cost-led retrenchment programme and freeze any new hiring during the pandemic. Citi, Morgan Stanley have announced similar moves, following pauses by European banks.

The bank plans to deliver a final dividend of 99.2 Hong Kong cents per share, bringing the total 2019 dividend to HK$1.537 per share, up from HK$1.468 per share in 2018.

The bank aims to increase its 2020 loans growth by more than 5 per cent, said the bank's deputy chief executive Wang Bing, adding that he finds it "difficult" to maintain a double-digit growth, due to the uncertainties in economics and business performance during the Covid-19 crisis.

"The pandemic is putting challenges ahead and short-term weight on our business," Gao said.

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