The Asian private banking sector saw its fair share of hiring sprees last year – UBS added 101 relationship managers in the region, while even Deutsche Bank took on 30, despite the turmoil surrounding the firm globally. You can view a list of expanding private banks here.
But it wasn’t just about recruitment. Of the top-20 largest private banks by RM headcount in Asia, eight employed fewer bankers at the end of 2018 than they did a year previously, according to new figures from Asian Private Banker.
Chronic talent shortages in private banking mean that the job market is almost a zero-sum game – the growth of RM workforces at some banks helps to trigger a decline in others. Poaching from rivals is rife because private banks’ graduate programmes are limited. Unlike in investment banking, it takes several years for grads to become client-facing.
The numbers in the table below don’t amount to dramatic reductions, but they are significant because most of the firms listed planned to expand their headcounts last year. BNP Paribas is a case in point. In mid-2017 the French firm revealed a new goal of becoming a top-five private bank in Asia by assets under management over the following three to five years. We reported at the time that this would require it to recruit about 120 RMs over that period. BNP clearly has a long way to go – its workforce shrunk by five last year.
Standard Chartered (down 14 RMs) also had high hopes in Asian private banking. Didier Von Daeniken joined from Barclays in 2016 as its Singapore-based global private banking boss and recruited several RMs from his old firm. But despite his efforts to rebuild the private bank, Stan Chart’s RMs are being successfully targeted by rivals, headhunters told us last month.
Recruiting RMs into Stan Chart can be challenging because private banking is an underperforming division which made an operating loss of $14m in 2018. Assets under management were $5bn (8%) lower year on year. But it’s not just about the financial numbers. Some RMs – perhaps unfairly – perceive Stan Chart as a retail bank rather than a “proper private bank”, former Merrill Lynch private banker Rahul Sen, now a headhunter at Boyden, told us.
The small declines at LGT, Safra Sarasin and EFG show how difficult it can be for European boutiques to hire RMs in Asia. These firms have all announced their intention to add RMs, but they failed to do so in 2018. While boutiques clearly have their attractions (generous salaries and few restrictions on market coverage chief among them), RMs from larger banks can find it difficult to convince clients to switch to a less well-known firm with a smaller product platform.
Credit Suisse, however, is already Asia’s second largest private bank and has little need for hiring sprees. The number of RMs it employs grew by only 2.8% between 2014 and 2018. The culling of underperformers is likely to explain last year’s fall, which mostly happened in the fourth quarter, according to its financial results. Private banks often cut bankers in Q4, before bonuses are paid.
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