It’s hard enough to make money in Asia investment banking and it’s doubly tough if you’ve previously concentrated on the wrong type of clients and now want to hire bankers to help you play catch-up.
CICC, which is embarking on an initial public offering, has underperformed in recent years in part because it didn’t switch its client focus from state-owned enterprises to Chinese companies in the private sector, reports the South China Morning Post. CICC ignored Chinese private companies because they traditionally raised less than their state counterparts – Alibaba’s IPO last year, the world’s largest, put such notions to bed. “Not covering private companies was a mixed problem of arrogance and ego. Also the top management thought Chinese state-run firms are more reliable,” an anonymous ex-employee of the bank told the newspaper.
As we noted last week, CICC has lost senior staff as it lost market share to rivals like Haitong and Citic. Now under new chief executive and chairman Bi Mingjian, CICC is tipped to boost hiring and to target bankers who can assist private companies with new listings and cross-border mergers and acquisitions. Trouble is, other major investment banks in China also want these bankers and they’ve been hiring them for at least two years longer. “It’s a quiet job market in IBD overall, but the demand for Chinese bankers with cross-border expertise is still strong as Chinese companies look to expand overseas,” says Rafael Brana, a consultant at search firm Bo Le Associates in Hong Kong
Unlike rivals, CICC didn’t develop industry groups to provide in-depth sector knowledge and transaction expertise, according to the SCMP. As the firm starts boosting its recruitment, expect it to have to offer large compensation increments to attract these skills.
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Southeast Asian countries plan banking integration. (Today)
Retail banking to feel the most pain under Deutsche’s restructuring plans. (Reuters)
Why the US shouldn’t oppose China’s plans for a new international bank. (Business Insider)