China Construction Bank has announced a new reform plan to overhaul its business structure. The bank said it's working to make its services better meet the demand of consumers.

Before rolling out its reform plan, China Construction Bank and China's three other major lenders released their first half year performance reports.

Q1. The country's banking industry is facing a challenging year. What have you found out in the banks' half-year reports?

A1. Profits are keeping in line with global trends. Out of the four biggest banks in the country, the Industrial and Commercial Bank of China remained the most profitable.

But its net profits only edged up 0.8 percent year-on-year -- to reach 150 billion yuan or a little over 22 billion US dollars.

China Construction Bank reported a 1.25 percent gain, Agricultural Bank posted a 0.8 percent increase. Bank of China saw the biggest growth in profit, a 2.5 percent gain, but in terms of total profit, the Bank of China still lags behind.

Chinese banking leaders are reminding their investors that this trend is not unusual, given the current global economic environment. Here's what they had to say.

"In the first half of this year, there is a continuing global trend of low or negative interest rates. There is also the continued impact of last year's successive RMB interest rate cuts. Under such circumstances, all big banks around the world are seeing a net interest margin decline," said Zhang Qingsong, deputy governor of Bank of China.

"The bank is facing a lot of pressure, because the economic adjustment that we are now experiencing is mainly caused by old industries being replaced by the new ones. Objectively speaking, banks are not best at supporting financing innovation and entrepreneurship. The mode of economic growth has changed, and banks have to change too," said Huang Yiping, Monetary Policy Committee, PBOC.

Meanwhile, the total number of bad loans held by the four banking giants grew by around 8 percent in the first six months of this year, slower than in the past. Bank authorities say China's banking industry has its bad loan sector under control.

Q2. What's behind these weak performance numbers?

A2. You have to remember that China's big four banks have been scaling back their workforce. The Bank of China shed nearly seven thousand employees this year.
China's biggest bank in terms of employee number -- the Agricultural Bank of China -- lost over four thousand employees. The ICBC saw almost 8,000 of its staff leave. And China Construction Bank shed some 7,000 people as well. Besides a reduced number of workers, salaries are also going down.

The new report shows that salaries at ICBC, Agricultural Bank and Construction Bank dropped by 1.6 percent, 2.9 percent, and 2.18 percent respectively. That includes salaries, bonuses, allowances and post-employment benefits.

One thing to keep in mind is that compensation structures at Chinese banks are different than in the West. The average annual income for a mid-level Chinese banker typically ranges from 100,000 to 125,000 US dollars.

Most international banks offer more than double that in salary. Western bankers also usually enjoy longer holidays and better benefits. So, you can see, many banks here are experiencing loss of staff, and cuts in pay as they report flat growth in net income.