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Morning Coffee: Goldman cuts Singapore jobs as banks pay price for “overhiring”

Banks overhire in Asia

Hiring overflowing

Goldman Sachs has become the latest firm forced to trim its Asian ranks this quarter as headhunters accuse investment banks of having hired too aggressively in the region.

About 15 people, roughly 30% of its headcount, are leaving or have left Goldman’s investment bank in Singapore since the start of January, according to a Bloomberg report, which quotes anonymous sources close to the bank. These departures include at least three senior bankers. Hsin Yue Yong, head of investment banking for Southeast Asia, Ruben Bhagobati, head mergers and acquisitions for Southeast Asia, and Singapore-based MD Antoine Izard are all quitting the US bank, reports Finance Asia.

The immediate reasons for the depatures appear to be Goldman’s comparatively poor performance in Southeast Asia – where, for example, it ranked only 10th among equities arrangers last year – and a fall in the value of equity deals in the region to US$24.1bn in 2014, from US$36.6bn a year earlier, according to Bloomberg.

Goldman isn’t the only bank to be axing jobs in Asia beyond the standard cull of underperformers. Standard Charted announced the closure of its equities division in January, with about 100 of the 200 affected jobs based in Hong Kong. Last month CIMB announced it was reducing IBD costs by 30% in anticipation of slower growth and has so far cut about 50 equities-related roles. RBS is reducing its Asia operations to a sales and trading unit in Singapore, while Nomura has cut about 12 Asia equities jobs.

Media reports have attributed the cut-backs to various factors, including tougher financial regulations, higher capital requirements, fluctuating equities markets and slower Chinese economic growth. However, IBD headhunters in Asia also say the banks themselves are partly to blame – in particular their recruitment policies during the post-financial crisis hiring boom in Asia in 2011/12, which saw investment banks compete aggressively for senior and mid-level talent in capital markets and M&A. “They generally just overhired – they took on too many expensive people and are now living to regret it,” one headhunter in Hong Kong told us last week.

Meanwhile:

Loh Boon Chye, country executive for Singapore and Southeast Asia at Bank of America Merrill Lynch, is leaving the firm. (Business Times)

ANZ poaches its new interest-rates strategist from the People’s Bank of China. (Finance Asia)

The next chairman of HSBC will be an external candidate. (Guardian)

No short selling of A shares via Hong Kong market on first day of new scheme. (South China Morning Post)

New Westpac chief executive Brian Hartzer is expected to reaffirm his bank’s commitment to have 50% women in senior management by 2017. (The Australian)

OCBC wants to have the largest credit card business in Singapore within five years. (Straits Times)

Singapore remains Asia’s biggest investor in overseas property. (Channel News Asia)


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