China state bankers face 30% bonus cuts as pay reform deepens

Published Tue, Mar 17, 2026 · 05:31 PM

[BEIJING] Some senior bankers at China’s state-backed financial firms are bracing for bonus cuts of at least 30 per cent as Beijing intensifies a sweeping remuneration reform across its US$69 trillion financial sector.

Senior managers, including department heads across business lines at two major state-owned banks, saw their 2025 bonuses slashed by 30 to 50 per cent, according to people familiar with the matter who asked not to be named discussing private information. Division chiefs at a mid-sized national lender also saw their variable pay drop by roughly 40 per cent last year, one of the people said.

The current wave of cuts follows a yearslong push by President Xi Jinping to promote “common prosperity” and crack down on what officials have termed the “hedonistic” lifestyles of elite bankers.

Authorities are particularly focused on fixing an inverted pay structure. Historically, mid-level managers at Chinese financial firms have frequently out-earned top executives, whose salaries are strictly capped due to their status as Communist Party officials.

The Ministry of Finance instructed key state-backed institutions late last year to submit formal plans to overhaul their compensation models. While many institutions are still awaiting final approval from the ministry, some have already moved to cut pay retroactively. Slashing bonuses is the most effective lever, as variable pay typically accounts for 50 to 70 per cent of a manager’s total compensation package.

The ministry did not immediately respond to a request seeking comment.

By contrast, global banks with a large presence in Asia such as HSBC Holdings and Standard Chartered boosted their bonus pools by about 10 per cent.

The belt-tightening has gone beyond banking. One major state-owned insurer cut 2024 bonuses for mid-level managers by at least 30 per cent late last year, according to a person familiar with the decision.

Chinese banks reported a combined profit of 2.38 trillion yuan (S$437 billion) last year, up 2.3 per cent from 2024, even as margins narrowed and non-performing loans hovered near a record high.

The bonus cuts are the latest sign of Xi’s tightening grip on a sector where high compensation has been questioned amid a stuttering economy. Beyond pay, the government has launched an aggressive anti-graft campaign, resulting in a series of high-profile probes and severe judicial penalties, including life and death sentences.

Despite the regulatory chill, pockets of the industry are beginning to show signs of a tentative recovery. A recent upswing in dealmaking has prompted several Chinese brokerage houses to start to rebuild, with investment banking divisions adding dozens of junior and mid-level staff.

Some firms have also moved to restore base pay towards pre-crackdown levels to remain competitive for talent. Still, bonus pools remain under strict regulatory scrutiny, people familiar with the matter said earlier. BLOOMBERG