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More hiring, more cash: Chinese trust companies are worth considering

The real heyday of China’s trust companies may have ended after the high-profile defaults of Guangdong International Trust and Investment Corporation (GITIC) and Hainan International Trust and Investment Corporation (HITIC) in the late 1990s.

But following reforms made to the sector in 2007, investors such as Morgan Stanley, Barclays Capital, RBS, Bank of Communications, and China Construction Bank, have all acquired substantial stakes in trust companies. This is helping to revitalise recruitment and push up pay.

There has been a steady increase in hiring among trust companies in China since the first quarter of 2009, says Jason Tan, manager of banking, commerce and finance at recruitment firm Robert Walters.

Trust companies are poaching candidates from a range of backgrounds – from investment banks and private banks to real estate developers – depending on their business lines, comments Jason Bedford, a Beijing-based financial services manager at KPMG.

The trusts, which are being tapped by the government to push innovation in the financial services sector and to reduce reliance on bank lending, are also paying top coin. They often compete head-to-head with major international investment banks for candidates by offering similar or better pay packages, says Bedford.

He adds that trust companies are splashing out to recruit Chinese-speaking US graduates, in addition to experienced local bankers.

Tan says many of the vacancies are for product development roles, which customise a trust company’s products for sale in the branch networks of banks which own stakes in them.

The future

While trust companies are expected to face a shortage of qualified candidates, job growth may be limited by the pace of reforms in this sector.

“Regulators will not let you put in products in markets immediately, so you’ll need to get separate licenses for all products. It’s a slowly evolving market. That’s probably why you won’t see massive volumes of hiring like in retail or corporate banking. One trust company will probably hire no more than three product development people at most,” explains Tan.

Nevertheless, foreign and domestic investment is expected to continue, as more trust companies, which were previously liquidated by reforms, are revived and brought back to the market.

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