In theory it’s not a great time to be an employee at a Chinese bank – staff numbers and pay rates are both falling among the largest mainland lenders.
Not everyone is suffering, however. Front-office investment bankers at Chinese firms, especially those based in Hong Kong, continue to see their teams expand and their compensation tick up.
“With Western banks slowing down their hiring, we’ve actually seen many Chinese firms recruiting in investment banking, especially for analysts, associates and VPs,” says Nick Lambe, group managing director at recruiters Links International in Hong Kong. “There’s still growth going on.”
This is surprising, because Chinese banks are shrinking. Seven of China’s 19 listed banks (including five of the six biggest by assets) reduced their headcount in the first half of 2016, leading to 34,691 job loses within this group, according to data from the firms’ quarterly reports compiled by Wind Information.
Average compensation at the ‘Big Four’ mainland banks — CCB, Industrial and Commercial Bank of China, Agricultural Bank of China, and Bank of China — fell 3% year-on-year over the same period.
Chinese institutions are trying to cut costs in the face of stagnating profits, a slowing local economy and increasing numbers of bad loans.
But for mainland firms with an investment banking wing in Hong Kong – including China Securities, CICC, CITIC Securities, GF Securities, Guotai Junan Securities, and Haitong Securities – there is no sign of major job cuts.
Chinese investment banks claimed five of the top-10 spots for Asia ex-Japan investment banking revenues in the first half of the year, according to Dealogic data.
“In the last 12 months, Chinese investment banks have become more competitive in hiring people from Western banks due to their expansion plans and the outbound investments of their clients,” says Rebecca Chan, a director a recruitment agency Michael Page in Hong Kong.
Mainland IBs still want to hire for the remainder of the year, traditionally a quieter time for recruitment, adds Hubert Tam, managing partner of Hong Kong headhunters Sirius Partners.
Meanwhile, as many staffers at Chinese banks see their pay fall or flat-line, their investment banking counterparts in Hong Kong remain well compensated.
“Packages are still competitive for IB specialists,” says Eunice Ng, director of search firm Avanza Consulting in Hong Kong. “Chinese firms are prepared to pay well to get the required skills and experience.”
While Chinese investment banks in Hong Kong pay base salaries about 15% to 20% lower than their global rivals, their overall compensation is often on par, says Lambe from Links.
“Chinese banks’ comp structure is very different from Western banks’. Western firms pay a large basic salary as they are restricted on bonus pay-outs. On the other hand, Chinese banks emphasise a lower base and a high bonus structure,” explains Tam.
If you join a mainland investment bank before year-end you might even secure a guaranteed bonus, adds Ng.
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