BNP Paribas Cuts Jobs Amid Slowing Business Volume in China
French banking giant BNP Paribas (EPA:BNPP) has reportedly reduced its workforce in mainland China and Hong Kong by a dozen positions, according to a source familiar with the situation. The layoffs, initiated last week, primarily affected investment banking and corporate finance roles, and occurred after the bank informed the impacted employees.
Prior to these layoffs, the bank had around 100 staff members involved in China-related transactions in its mainland China and Hong Kong operations. This move was a response to a decline in business activity in the Chinese market, which has prompted several global banks to reduce their personnel in the region.
The decrease in business activity in China is attributed to the country’s economic slowdown and increased regulatory scrutiny over corporate transactions and fundraising efforts. This situation has resulted in a significant drop in revenue potential for the market, pushing financial institutions to reassess their staffing needs.
The impact of the slowdown is evident in data from LSEG. According to this data, banks raised just $41.5 billion from Chinese capital market transactions in the first three quarters of 2024. This figure represents a 62.5% decrease compared to the same period last year and marks the lowest total for the first three quarters since 2008.
Despite expectations that China would implement strong incentive policies to boost stock sales and initial public offerings, the measures taken have proven to be less effective than anticipated.
BNP Paribas itself played a limited role in Hong Kong's equity transactions this year, acting as an intermediary in a fundraising effort that generated only $6.5 million, placing it 31st among 32 intermediaries.
The investment banking sector in China has felt the effects of market conditions, with an estimated $9.1 billion in fees earned across the sector in the first three quarters of 2024. This marks a 25% decline compared to the same period last year.
A BNP Paribas spokesperson declined to comment on the layoffs, which were first reported by Bloomberg on Wednesday.