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FOR the banking sector, 2007 was an innocent, prosperous time when now fearful terms such as 'sub-prime', 'toxic assets' and 'banking bailout' were still obscure. Jobs were plentiful amid booming demand for financial services.
Fast forward to today, and anyone in the sector is now on the front line of the financial crisis - which has also become a global economic crisis.

Many bank employees now lie awake at night wondering if they will be next on the chopping block as many financial institutions have retrenched staff.

Employees at Singapore's longest-established bank, OCBC Bank, however, may be the exception, as the bank starts to reap the benefits of prudent safeguards put in place during the good times - coupled with new measures to cut costs.

The Republic's largest lender, DBS Bank, stunned the nation last November, when it axed about 900 employees or 6 per cent of its workforce. The bank's biggest retrenchment sent a chill down the spines of many in the industry.

The dismal results recently reported by all three local banks reaffirmed that the good times have indeed come to an end. For the three months to Dec 31, 2008, UOB's profits fell 34 per cent to $332 million, DBS reported a 40 per cent drop to $295 million and OCBC saw a 30 per cent drop to $301 million.

In the midst of the crisis, OCBC was quick to assure staff their jobs were safe despite worsening economic conditions.

In an e-mail to staff last November, OCBC chief executive David Conner said: 'I assure you that currently we have no plan for any retrenchment exercise.'

The former Citibanker would repeat that message over the following weeks, even as markets continued to deteriorate.

OCBC employs about 10,000 staff in Asia and other parts of the world, with more than 5,000 based in Singapore.

Staff are pleased at the assurance.

Mr Ang Chee Peng, 50, who just celebrated his 20th year at OCBC last year, is also relieved that the training budget will not be cut this year.

'The bank values staff training a lot and something reiterated from the top management very often is that they value its people and the skill sets they bring to the bank,' said the assistant vice-president of information technology.

Others like Ms Candy Tan, 37, a service ambassador at OCBC Centre branch, said: 'It feels good when our supervisors acknowledge your work but what makes it easy for me during this crisis is the encouragement I get from my fellow colleagues.' She has been working at the bank for two years.

Mr Conner's confidence on the jobs front was based on the bank's culture and practices, said OCBC chief financial officer Ching Wei Hong. 'Our CEO went to the board of directors to assure them that there will be no retrenchment...and the board was supportive of the move, but they have also told us that we must find alternative ways of saving costs,' he said.

Immediate steps OCBC took to cut costs rather than jobs included a wage freeze. The bank also cut down on bonuses, mainly among senior staff.

'Travel has been scaled back quite significantly,' said Mr Ching. The minimum flight duration for a staff member to qualify for business class is now eight hours, up from five hours. 'And we used to have a lot of off-site (training and meetings), conducted in Malaysia, Indonesia - it's now all cancelled for the year.'

These measures, however, were not merely in reaction to the crisis, as the bank has a longstanding practice of ensuring efficiency in its operations, he said.

'Our CEO was the main driver, pushing very hard not so much on a cost angle but more on an efficiency angle.'

Some pre-crisis measures to cut costs and increase efficiency included the bank's investment since 2007 in video-conferencing facilities and moving selected operations away from the city.

'We also moved and concentrated a lot of all our non-front line activities especially for operations and technology...to our Tampines location and that again was not done overnight, but with a lot of forward planning as far back as 2007.'

Mr Ching declined to disclose savings from overall cost-cutting, but said it was enough to save a 'substantial' number of jobs at the bank.

'Taking out the pay and bonus components, and looking at what we call 'little things' from hotels to air travel to new guidelines on entertainment, which we've scaled back...the target savings from all these will be about $15 million to $16 million, if we get it right,' he said.

'And in terms of junior staff, that is quite a substantial number of jobs that we can save.'

By focusing on operational efficiency and ensuring prudent hiring practices during the good years, OCBC is now better positioned to weather the downturn.

Instead of just embarking on a massive recruitment drive during boom times, OCBC boosted productivity instead.

'We invested in technology systems that will allow us to automate more processes, so while our business picked up significantly in 2006, 2007 and even during the early part of 2008, we didn't need to ramp up staff levels that much, and we were able to process more with the same amount of people,' said Mr Ching.

OCBC turned to contract and temporary staff when they were needed to handle the 'blips in business' and that provided the bank with the flexibility of scaling up or down on manpower costs.

'But to do that, you got to have your training systems in place, because you'll be bringing in someone fresh...so you'll need to be able to bring that person up to speed within days.'

Recognising the importance of training, OCBC has maintained the staff training budget levels, and has cut costs elsewhere. Although the recession is biting hard, the bank - whose largest shareholder is the Lee family - tries to keep the welfare of its staff uppermost in its mind.

'There is a long-established culture of OCBC, largely attributed to the Lee family, who incorporated this very strong guiding principle within the institution of taking care of staff,' Mr Ching said.

By Francis Chan