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Future expansion of Citi’s new Chinese joint venture may be tricky amid tight talent market

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Citigroup’s new Chinese joint venture, dubbed Citi Orient Securities, is likely to face tough competition if it wants to hire more investment bankers. The US firm’s JV with Shanghai-based Orient Securities, announced earlier this week, will allow it to underwrite equity and debt securities on the mainland. But rivals like UBS, Morgan Stanley, Credit Suisse, Deutsche Bank, Goldman Sachs, Credit Suisse and J.P. Morgan, have already established JVs and recruited bankers in China.

Pay (more) first please

Katrina Khan, manager, financial services team, Morgan McKinley Shanghai, says: “With these other global institutions in operation, any new employer looking to hire investment banking professionals is likely to find it more difficult to find quality candidates without the offer of better compensation.”

That said, Citi Orient hasn’t been hiring aggressively yet. Sarah Xiao, head of financial services, North China, Talent2, says Orient’s entire i-banking team has moved to the new JV, including more than 200 bankers; enough to meet current business requirements.

However, turnover has generated recruitment. “They’ve hired some senior bankers from other local investment banks,” adds Xiao.

The question of foreign talent

The investment banking talent pool in China is tight, but Xiao says Citi Orient may not need to hire foreign bankers in the short term. “There’s only one senior executive manager from Citigroup as chief compliance officer; other senior managers are from Orient Securities.”

However, Khan says if finding strong local talent is difficult, some JVs may consider transferring people internally, or recruiting from markets like Singapore, Hong Kong or New York.

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