Mainland Chinese are increasingly taking senior roles in global investment banks in Hong Kong - at the expense of the Western expats who held them previously.
International banks have been sliding down Asian revenue tables over the past year, while big Chinese banks eat up market share. To stop the decline, they are employing more Chinese bankers in Hong Kong and attempting to capture more of the mainland-driven deals that are now dominating fee income in Asia.
While firms such as Goldman Sachs and Bank of America have targeted senior U.S. and European bankers during recent redundancy rounds, their Chinese counterparts remain in demand.
Hong Kong-based Chinese bankers, as a rule, have deeper networks within the PRC companies that are seeking advice as they expand overseas.
“The Chinese origination market is very much been based on relationships,” says a Hong Kong investment banker who worked for a global firm and is now with a Chinese house.
“Why would the head of a Chinese company, who was likely put there based on his personal relationship with the government, want to pay fees to a foreign banker, when he could give it to his cousin’s nephew?” says the banker, who asked not to be named.
While global banks in Hong Kong are mainly interested in senior Chinese bankers’ access to deal-flows, their technical skills have also improved, says former UBS banker Benjamin Quinlan, now CEO of Hong Kong finance consultancy Quinlan & Associates.
“Chinese bankers were always seen as less technical bankers, but over the past three years things have definitely changed,” adds Quinlan.
Meanwhile, junior and mid-ranking Chinese staff are increasingly being promoted into more senior roles at global investment banks in Hong Kong.
“Instead of hiring from abroad, which was often the practice in the past, VP to MD positions are now being filled with existing employees,” says Quinlan. “Over the last few years there was a concerted effort to hire Western educated, Chinese-speaking graduates. They are now stepping up.”
The practice of parachuting in senior Western bankers hasn’t completely ceased, but it now happens less often and at only the highest levels, says John Mullally, financial services director at recruiters Robert Walters in Hong Kong.
“There are still jobs out there for expat analysts and associates who have the technical modelling skills, but senior hires require a very strong case, especially if they have no language skills and no relationships.”
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