The start of the Rurik Jutting trial this week has reopened debate not just about the horrific nature of his alleged crimes, but also about the way he lived while working as an expat banker in Hong Kong.
Jutting led a playboy lifestyle, allegedly taking cocaine on a regular basis and blowing thousands of dollars a night on alcohol and meals.
“Obviously nobody’s saying that expat bankers are killers, but some local people look at how extravagant he was with his money and his living, and assume that other expats are like that too,” says a Western banking professional in Hong Kong. “The reality is that his lifestyle was exceptional, especially in the current market.”
Last year a book from John LeFevre, creator of the @GSElevator Twitter feed, also told tales of debauchery during his stint in Hong Kong investment banking – from drugs binges and prostitute maids to crashing luxury cars.
But several foreign financiers we spoke with say very few expats are now flaunting their wealth in Hong Kong.
LeFevre’s depiction of the city, for example, belongs to a bygone era – he was there between 2004 and 2008 – when Western bankers were more in demand and took home higher bonuses than they do today.
“I can say from first-hand experience that extravagant lifestyles for expats came to a grinding halt in 2008 and have never really come back to the same extent,” says a former trader in Hong Kong.
“The realities of market fluctuations and job losses have been humbling for many expat bankers. They may still have the capacity to spend, but it tends to be far more discrete these days,” he adds.
Banks’ compliance rules have made it more difficult to entertain on expenses, which has “severely curtailed most of the more ‘official’ excesses”, say the ex-trader.
“It’s seen as bad form to be spending excessively, either on the bank’s or personal tabs, and it’s now as much a reputational issue as a compliance one. With many banks still having declining headcounts in Hong Kong, nobody wants to do anything that will increase the chance of redundancy,” he says.
Before the financial crisis expat bankers were also more numerous in Hong Kong than they are now. Many were parachuted into management roles because of skill shortages locally, says Moncef Heddad, a former investment banker at J.P. Morgan in Hong Kong who now runs boutique advisory firm MH Partners.
Most Westerners working in mid-2000s Hong Kong still received “expat packages” – money to cover housing and schooling costs – which meant they could use their salaries and bonuses to splash out on luxuries, not necessities.
“In those days, young bankers would go to Hong Kong and party hard – everyone was eating abalone and drinking champagne,” says Heddad. Despite obvious exceptions such as Jutting, Heddad believes most expats who’ve landed in the last five years have ditched their “party lifestyles”.
“Back then traders in Hong Kong felt like they had the Midas touch,” adds Nick Wells, director of search firm Webber Chase. “Structured-products specialists were selling high-margin products to underdeveloped clients, propping up global P&L for management in London and New York. Given their growing contribution to global books, Asian bonuses just got bigger and bigger.”
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