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DBS ramps up in China: Is this sensible hiring or a spree too far?

DBS’s plans to expand its treasury and markets team outside of Singapore are driven to a large degree by the growing internationalisation of the Chinese currency. But hiring the right people in China may prove problematic.

The firm announced on Friday that it wants 200 staff to join the T&M team over the next three to five years, mainly based in Hong Kong, China, India and Indonesia.

“We haven’t seen as much replacement recruitment in existing teams as we expected this year, but now banks need new revenue streams and they are opening up new desks. The DBS move is a classic example of this. It’s growth hiring, which is positive for the industry,” says Richie Holliday, managing director, Morgan McKinley North Asia.

DBS T&M head Andrew Ng told a media conference that one of the bank’s main intentions is to build a strong RMB franchise, in sectors such as foreign exchange and fixed income.

But DBS, especially in mainland China, will be recruiting in a market which is underdeveloped and talent short.

Hiring headaches?

“The firm will face interesting challenges because China does not have many currency specialists. It may need to relocate senior managers from Singapore. On the flip side, because it’s getting in early, this may give it advantages over its competitors in the longer term,” says Holliday.

Fiona Kwok, consultant, financial services, Robert Walters, agrees that China, India and Indonesia all suffer from skill shortages in T&M functions.

“The exposure within these markets is significantly lower compared with the exposure that can be gained within key financial hubs such as Hong Kong and Singapore. Thus, as these markets develop to compete with the regional hubs, they find themselves lacking experts and leaders,” says Kwok.

Products, platforms and technologies in mainland China are not as sophisticated as in Hong Kong, she adds.

As a result, candidates in China are generally of poorer quality, according to Eunice Ng, director of Avanza Consulting. “There are not many very good talents. Candidates always move around or have a few other areas to look after. They aren’t as specialised enough as their employers want them to be.”

DBS faces another challenge in its China hiring bid: its own brand. “We receive enquiries from DBS staff wanting to move out. This may be because the firm is not well received as an employer of choice. DBS is probably stronger on the investment banking side, rather than treasury and markets,” comments one headhunter, who asked not to be named.

Another anonymous recruiter adds: “DBS is asking people to join what is essentially a start-up team in China. As a candidate, when the market is coming back, you have to ask yourself whether you really want to go to a second-tier player.”

Candidates to cash in?

The recruiter believes that DBS will have to offer better compensation and/or more senior positions in order to attract talent to its T&M team in China. “The beauty for candidates is that you top up your compensation and get a healthy guarantee too. Plus you might be offered a country-head role instead of being deputy at your current firm.”

He says DBS will hire senior talent at a premium for a few months in the hope that more junior staff will then join at normal market rates.

Headquartered in the currency hub Singapore, DBS is at least playing to its domestic strengths by expanding this service abroad, he adds. “It may not be first tier, but it’s got a good standing in Singapore and has a good chance of making a success out of this in China in the longer term,” adds the recruiter.

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