In recent years, the financial sector in mainland China has been undergoing astonishing changes: small and medium-sized banks are accelerating their consolidation or dissolution. In the first five months of this year, 184 small banks have already “disappeared”. This wave of “disappearances” not only poses unprecedented challenges to bank operations but also directly touches the nerve of the public’s financial security, triggering fears about deposit protection. This has led to a surge in unemployment in the financial industry and intensifying competition within the sector.
Recently, social media in mainland China has been buzzing with discussions about “a large number of bank closures and bank employees collectively collapsing”. One netizen cautioned: “People with deposits in the bank must know about this news, as it directly concerns your wallet. Those with deposits should make plans early because banks can go bankrupt, and you may not be able to retrieve your deposits. After a bank goes bankrupt, the highest compensation limit is only 500,000 RMB, including principal and interest.”
Other netizens have commented that for ordinary people, they can only distribute money to different banks, especially large banks, to spread risk. They emphasized, “It’s not easy to make money now, so you must protect the money you’ve already earned.”
Throughout this year, financial regulatory authorities in various regions of mainland China have successively announced the dissolution or absorption of village banks and rural credit cooperatives. For example, on May 26, the Ningbo Financial Regulatory Bureau approved the dissolution of the Ningbo Jiangbei Fumin Village Bank, with all its assets, liabilities, business, branches, and staff to be taken over by Jiangsu Bank and establish the Ningbo branch.
According to data from Enterprise Early-Warning Network, the number of small banks that have been approved for merger/dissolution in the first five months of this year has reached 184, which is seven times higher than the same period last year and almost equivalent to the total for the entire previous year. Just on May 16, 120 small banks in Inner Mongolia collectively “disappeared”. The data clearly indicates that small and medium-sized banks are accelerating their contraction: 43 disappeared in 2022, 77 in 2023, 204 in 2024, and already 184 in the first five months of this year.
Behind the trend of banks “disappearing” is the increasingly difficult operating situation they face. A recent video interview shared by blogger “Great Current Affairs” shed light on this issue. A female resident of Beijing revealed that her friends in the banking industry are struggling, citing that loans are now difficult to approve, employees are under immense pressure, and the main task of banks is “all-staff marketing” to issue loans.
“Now, even mortgage loans with an annualized rate of 2.2%, interest before principal, and a ten-year period are not wanted by anyone,” her friend complained. “People with money don’t need loans, and those in need of money (such as business owners) can’t get loans.”
Another male resident in his 40s bluntly stated during the interview that life in the bank is “very difficult” as loans cannot be issued because “there are no good customers in the market—every customer is already heavily in debt”. He pointed out that banks “are stuck in a cycle of loaning to pay off loans”. Many bank employees privately admit that even if they want to turn a blind eye and issue loans to customers, the bank’s loan screening system rejects the customers.
He mentioned Citibank as an example, where 3,500 employees were laid off, primarily due to the need to “cut losses when not making money”. “The situation is so severe! Banks are struggling, and there seems to be no solution.”
On June 5, Citibank announced as part of global job simplification, they would adjust their global technology and business support departments, streamlining their global technical support centers in Shanghai and Dalian, resulting in about 3,500 technical staff being cut.
As the Chinese economy gradually slows down, the country’s financial industry is also experiencing a harsh winter. Major financial institutions and state-owned banks are significantly reducing salaries, leading many white-collar workers, who were once seen as holding a “golden rice bowl”, to suddenly face poverty again. This has been followed by numerous large and small banks “closing down”, causing a continuous increase in financial industry unemployment and fierce competition within the sector.
Especially this year, financial professionals from major cities such as Beijing and Shanghai have been continuously complaining on social media about huge work pressures, long-term overtime, shrinking salaries, but still not daring to resign because they don’t know what to do once they quit.
A notable phenomenon this year is financial professionals “reversely” turning to become civil servants. China’s finance and economics new media outlet “Wisdom Valley Trends” stated on July 4: “Iron rice bowl trumps golden rice bowl, as the trend of taking civil service exams has spread to the financial sector.”
According to renowned blogger “Glacier Ideologium”, in April of this year, of the 287 candidates listed for civil service employment by the China Securities Regulatory Commission for 2025, 28 are from securities firms. In the first batch of candidates listed for recruitment exams as civil servants in Shanghai for 2025, 15 employees from 12 securities firms have successfully become civil servants. This starkly contrasts with the past state where financial industry salaries far exceeded civil service incomes.
In fact, the trend of salary reductions in the financial industry has been ongoing for about three years. Taking two major securities firms known for their high salaries as an example, the average annual salary at Citic Securities dropped from 947,000 RMB in 2021 to 779,800 RMB in 2024; at Citic Corporation, the average annual salary fell from 1,167,200 RMB to 642,600 RMB, almost halved.
Alan, a former analyst at a prestigious securities firm in Shanghai, disclosed to “Southern Window” magazine that in the second half of 2021, the top 50 securities firms generated only about a third of the total commissions that they used to in a half year.