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Daily Dispatches – India’s i-bankers’ innings over

Gloomy days for Indian investment bankers

Gloomy days for Indian investment bankers

India’s retail banking banking market might be expanding and hiring tens of thousands of people, but working for an investment bank may prove to be a short route to unemployment.

The Economic Times of India says that more than 200 investment bankers have lost their jobs in the past year due to the decline in deal volumes and a drop in stock market performance.

I-bankers working for both domestic and international banks have been affected, with the latest departures cited as the exit by four directors of IDFC Capital.

The newspaper quotes research by headhunting firm Vito India saying that “…around 140 executives from investment banking, equities and fixed income  have either quit their jobs or have been asked to go”. Only 42 have found other investment banking jobs, while the rest have started their own firms or have taken up corporate jobs. Those in corporate banking (38) and transaction banking (55) suffered a similar plight; only 28 and 33 have found other investment banking jobs.

Argy-bargy over job cuts

National Bank of Australia staff and management are at odds over reports about the number of job cuts in the IT division. The Australian reports that staff believe the number of people who have lost their jobs to offshoring is now close to 100.

One former employee was quoted as saying: “It’s been happening progressively… first Melbourne, then Sydney, with more to come.  They’re (NAB) not saying ‘We’re getting rid of 500 people in one hit’, they’re getting rid of five here, 10 there, 20 there and so on.”

The bank, on the other hand, says 26 staffers took redundancy packages in March, and another 11 were redeployed within the bank.

Local is lovely

Local and regional banks are rising up the ranks of  employers of choice for Asian graduates, with the big foreign banks like Goldman Sachs and Morgan Stanley falling out of favour after declining profits and continuing layoffs.

The South China  Morning Post says Goldman and Morgan Stanley each fell 10 places to 19 and 17 respectively in the Top 100 ideal employers rankings conducted by Universum among student for the  six months to May.

Bank of America Merrill Lynch declined seven places to 31 and Credit Suisse dropped 17 places to 44. Royal Bank of Scotland lost most ground, falling 23 places to 72 out of 100.

Bank of East Asia, which posted record profits of HKD$6.1 billion last year, jumped 18 places to 39 in the rankings. Singapore-based DBS Bank climbed 13 places to rank 33 and Bank of China rose one place to 15.

Good fortune

Almost one fifth of the latest Fortune Global 500 companies are Chinese, marking the 10th consecutive year-on-year increase with 16 more entries than last year, according to a list published by Fortune magazine on Monday.

Among the 95 Chinese companies, 89 are from the mainland and Hong Kong while the rest are from Taiwan, according to the Fortune Global 500, an annual list ranking the world’s largest corporations in terms of revenue.

Ensuring a foothold

Asian Insurance Review reports that BNP Paribas Cardif is entering the Chinese insurance market through an agreement to acquire the 50% stake held by ING Group in the latter’s life insurance joint venture with Bank of Beijing. The new joint venture will be equally owned by BNP Paribas Cardif and the Bank of Beijing.

Can’t find a finance job – become a shadow banker

A former senior investment banker at UBS AG in China became a shadow banker eight months ago after seeing the profits that can be earned.

Bloomberg reports that Joe Zhang was enticed into underground lending after meeting “a rumpled, 50-something man from Hangzhou” who, by lending to small businesses,  had built up a fortune of nearly half a billion US dollars by 2010.

Shadow banking in the Chinese economy is now worth an estimated USD$5 trillion, according to Zhang, who says he has no trouble finding customers willing to pay 24% interest annually for loans.

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