Citigroup offered to make a one-time payment this month to its lowest paid staff in Hong Kong to help them overcome financial hardships as the coronavirus pandemic pushes the global economy into a recession.
Staff members whose annual base salary is HK$470,000 (US$60,622) or less would receive a special payout of HK$8,000 this month, Citi said on Wednesday. It is part of the bank's announcement last week of one-time payments to 75,000 staff globally, including US$1,000 each to its lowest-paid workers in the US.
"This initiative is for colleagues who are more likely to face economic hardship in the current situation," Angel Ng Yin-yee, Citi's Hong Kong and Macau chief executive, said. "We hope that our support will help lighten their load as they cope with other challenges and family priorities during this time."
Citi joined other financial groups like JPMorgan Chase and Bank of America, who have offered special payments or incentives to help their employees weather the unprecedented crisis. They include allowing staff who are sick or unable to work time off without having to use their annual leave.
The health crisis has already inflicted a steep cost for lenders and investors alike, as bank stocks tumbled. Citigroup's shares have lost 47 per cent this year. Both HSBC and Standard Chartered shares slumped on Wednesday after they greed to cancel their dividends and suspend share buy-backs following a request by UK regulators.
The coronavirus, which causes the Covid-19 disease, has infected more than 844,000 people worldwide and forced governments from Hong Kong to the UK to urge businesses to allow staff to work away from offices to stem the spread. About 65 per cent of its staff in Hong Kong continue to work from home, Citi said.
Months of street protests, followed by the coronavirus pandemic, have been stressful for front-line employees at a number of banks in Hong Kong prompting lenders to react. HSBC offered eligible local employees five extra days of annual leave to be taken between 2020 and 2021, apart from free meals in its canteens.
Like many governments across Asia, Hong Kong recently barred entry by non-residents, while returning residents face a mandatory quarantine and public gatherings have been limited to no more than four people.
Banks globally are facing pressure from policymakers to extend loans to businesses as the unprecedented global health crisis has stifled economic growth and led to millions of job losses worldwide.
Industry critics point to their performances following the global financial crisis in 2008 and the rich pay packages bank's top executives have received in the intervening years.
HSBC said last week it would temporarily "pause" job cuts as part of its massive restructuring announced last month. Citigroup, Deutsche Bank and Morgan Stanley have said they would suspend headcount reductions during the current crisis.
"It would be unfair to our employees to put them in a position of uncertainty, as we were also asking them to deal with and support our customers through the uncertainty of the coronavirus," Noel Quinn, the HSBC CEO said on a media conference call on Wednesday.
"We have decided to pause that programme for a period of time," he added. "We have not been specific as to how long that pause will last. We clearly want to see how the coronavirus situation develops before revisiting that decision."
Bank of China (Hong Kong) said last week that it would not lay anyone off or freeze salaries during the health crisis. The bank, like many of its mainland China counterparts, was forced to shut dozens of branches and outlets in the city last year after they became targets for more radical protesters.
"The overall market environment will remain extremely challenging, as the pandemic becomes a key factor affecting the global economy," vice-chairman and chief executive Gao Yingxin, vice-chairman and CEO, said last month. "It has also taken a toll on Hong Kong."
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