China Merchants Bank's management trainee scandal trends on Weibo, exposing shortcomings in reputation risk management

This incident has severely damaged the reputation of China Merchants Bank (CMB) and exposed the bank's shortcomings in reputation risk management and response.

@新熵 Original

Author 丨江蓠 Editor 丨蕨影

China Merchants Bank probably never expected to trend on social media due to a scandal involving one of its management trainees.

On the morning of September 19, the hashtag #58-pagePPT# topped the trending list on Weibo. The incident began on September 18 when a woman from Shenzhen, Guangdong, created a 58-page PPT accusing her boyfriend, Shi Moumou, a management trainee at CMB, of engaging in multiple affairs, soliciting prostitutes, and cheating.

In response, CMB quickly issued a statement, confirming they were aware of the situation and would conduct a thorough investigation. The bank emphasized its strict stance on employees' moral conduct and professional ethics, vowing severe disciplinary action if the allegations were proven true.

CMB later updated its response, stating that the bank does not tolerate any misconduct by employees. Upon learning of the incident, they immediately launched an investigation and, the following day, dismissed the employee involved, revoking his Party membership and terminating his employment in accordance with internal regulations.

The exposure of this private scandal not only became a hot topic in society but also severely impacted CMB's reputation. It highlighted the need for the bank to enhance its reputation risk management, including prevention, monitoring, response, and resolution.

CMB's Average Monthly Salary Exceeds 50,000 RMB

The PPT detailed Shi's activities across five categories, including multiple instances of soliciting prostitutes in cities like Shenzhen, Jinan, Xiamen, and Beijing. From March to August this year alone, he reportedly spent 30,330 RMB, with individual transactions ranging from 2,500 to 5,000 RMB.

The PPT also revealed that Shi had added over 300 female contacts on social media, labeling them with tags.

Shi, a native of Jining, Shandong, holds a master's degree in finance and worked as a management trainee in CMB's Corporate Banking Division.

The scandal drew attention to the high salaries of CMB trainees, with netizens commenting, "CMB trainees are paid really well."

Indeed, the financial sector is known for its high salaries, and CMB is among the top-paying banks in the industry.

According to data from the semi-annual reports of 42 A-share listed banks, CMB's average monthly salary in the first half of this year was 51,400 RMB. Despite a 3.7% year-on-year decline due to industry-wide salary cuts, it still ranked first in the sector.

Financially, CMB faced challenges in the first half of the year, with both operating income and net profit declining by 3.09% and 1.33%, respectively, contrasting with the overall growth trend in the industry.

Regulatory scrutiny also intensified, with CMB and other major banks drawing attention for violations in fund sales, particularly employees operating without proper qualifications.

Banks Must Strengthen Oversight

Misconduct in the personal lives of financial professionals is not uncommon. Earlier this month, a woman accused a Hong Kong-based employee of CCB Capital (a subsidiary of CCB Trust) of infidelity, workplace harassment, and soliciting prostitutes.

Analysts suggest that frequent scandals in the financial industry are linked to its high-pressure, high-risk, and high-reward nature.

In recent years, narrowing interest margins and rising non-performing loans have increased stress levels among bank employees.

A report by the Chinese Academy of Sciences highlighted that bank employees face intense competition, fast-paced work environments, high responsibility risks, repetitive tasks, and significant living costs, contributing to elevated stress levels.

Over 50% of bank employees reportedly experience anxiety. Beyond personal ethics, the high-pressure environment may drive some to seek inappropriate outlets.

While moral integrity and professional ethics are non-negotiable for bank employees, employers must also take responsibility for supervision and support.

Banks must implement robust systems for ethical education while addressing employee stress and mental health. Scandals not only harm the involved bank's reputation but also cast a shadow over the entire industry.