A couple of years back, mainland Chinese who worked for banks were envious of their counterparts in the securities business.
At the time, banks were grappling with falling margins, rising bad debts and the challenge from internet finance but brokerages were riding on favorable policies and mainlanders’ fast-growing appetite to speculate.
Now, the party is over.
Workers in the brokerage sector face rapidly falling revenue and rising chances of getting laid off.
Revenue of 25 listed securities houses fell almost one-third year on year. Net profit halved during the period, China Securities Daily says.
When income falls, businesses have to tighten the expense side.
During last year’s boom, brokerages were competing to expand.
Major players increased their payroll more than 30 percent, the report says.
Individual brokerages enlarged their payroll by as much as 180 percent.
Such hurried expansion added downsizing pressure in the currently weak market.
For the rest of the year, pay cuts and redundancy would probably be the norm in the industry.
To survive, securities firms are planning other moves such as using the internet to better serve the mass market or develop premium new services such as private banking and tailored investment products for upper-tier clients, the report adds.
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