MaritimeBank sacked a total of 1,060 employees last year, and declared in April that it would continue to lay off people this year.— Photo vinacorp

HCM CITY (Biz Hub)— Banks are claiming that a combination of bad debts, low credit growth and high operating costs are forcing them to lay off staff and cut wages.

A Tuesday report by the Thoi bao Kinh doanh (Business Times) newspaper said that in the first half of the year, the Asia Commercial Bank (ACB) cut down the number of employees at the bank and its affiliates by 568 to 9,708.

MaritimeBank sacked a total of 1,060 employees last year, and declared in April that it would continue to lay off people this year.

The report said Viet Nam International Bank (VIB) has a plan to reduce 1,500 employees from mid-2012 to the end of 2013.

The Bank for Foreign Trade of Viet Nam (Vietcombank) has maintained its strength of 12,351 employees since the end of last year, but has cut back recruitment to zero this year after an intake of 1,000 new employees last year.

Wage cut woes

In the first six months of 2013, ACB spent VND625.2 billion (US$29.8 million) on wages and allowances for employees, a reduction of VND272.8 billion ($13 million) over the same period last year.

On average, an ACB staff member earned VND10.73 million ($510) per month, a year-on-year decline of 26 per cent, and 29.8 per cent less than last year's average.

The Nam Viet Commercial Joint Stock Bank (NaviBank), the first bank to report a second quarter loss, reduced its salary expenditure from VND128.78 billion ($6.1 million) last June to VND84.93 billion ($4 million) at the end of last quarter, a 34 per cent fall, meaning it had to reduce the number of employees as well as cut wages.

The bank now has 1,552 employees.

The second quarter financial report of An Binh Bank (ABBank) showed that it had reduced its spending on wages and allowances to VND167.4 billion ($7.9 million), a 5.8 per cent year-on-year decrease.

MaritimeBank has not declared specific figures, but it has affirmed its spending on wages and bonuses will fall this year.

Vietcombank's wage-fund for the first quarter was cut 9.5 per cent year-on-year by VND73 billion ($3.5 million) to VND765 billion ($36.4 million). The average monthly income of a Vietcombank staff member has gone down by VND3.3 million ($157), or 16 per cent, to VND17.4 million ($828).

The report cited most banks as saying the cutback of employees and wages was part of their restructuring efforts.

Furthermore, most of the sacked employees had non-essential functions, meaning they were either freelance or seasonal workers, the banks said.

The Thoi bao Kinh doanh report also cited analysts as saying the banks had already reduced their operational costs to the maximum possible. Further cuts in expenditure were possibly only through cutbacks in wages and staff, they said.

They predicted that the trend of reducing wages and staff could continue next year if the economy did not recover.

Nguyen Tri Hieu, a financial expert, was quoted as saying wages, bonuses and working conditions in banks were better than other sectors previously, but these have been brought down to average levels now. — VNS