Deutsche and Stan Chart bonus discord helps drive 25% uptick in Asian IB hiring

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Deutsche and Stan Chart bonus discord helps drive 25% uptick in Asian IB hiring

There’s more bonus-season hiring happening now in Asian investment banking than there was a year ago, say recruiters in Hong Kong and Singapore.

Improving market conditions are creating new headcount in both cities, while more ‘replacement’ vacancies are opening up as global banks try to backfill staff who leave. Banks are suffering more departures than 12 months ago, driven by defections to fintech and dissatisfaction about bonuses.

Front-office recruitment is up between 20% and 25% year on year, says Angela Kuek, director of search firm Meyer Consulting Group in Singapore. This rate of increase is likely to continue into the second quarter as more firms, particularly European banks, pay bonuses.

“Investment banks are recruiting more actively this year – more headcount approvals are in place. I’m fairly positive about the hiring outlook,” says former J.P. Morgan analyst Hubert Tam, now managing partner of search firm Sirius Partners in Hong Kong. “That’s mainly because the macro economy, especially in China, is doing better and most banks had a profitable 2017. Now the US market is on an upward interest-rate cycle and there’s more investment confidence.”

It’s a similar story in Singapore. “The supply of front-office investment banking jobs has increased compared with 2017 and will pick up more later in March and in April,” says Jay Abeyasinghe, associate director of financial services at recruiters Morgan McKinley in Singapore. “Market sentiment has generally improved, and M&A and capital markets deal volume is now ticking upwards.”

Most of the recruitment is at analyst and associate levels, a trend kicked off by US banks – in particular J.P. Morgan – who pay bonuses before their European rivals and who stepped up their junior hiring in Asia several weeks ago. “There’s still a paucity of roles at director and MD levels,” says Abeyasinghe.

Following the lead of US rivals, several headhunters now identify HSBC as among the most aggressive recruiters of young bankers in Hong Kong. Its new mainland China joint venture, HSBC Qianhai Securities, is also expected to expand this year.

The recruitment increase isn’t only fuelled by banks adding new headcount. Compared with last year, more bankers are leaving firms of their own accord, opening up replacement vacancies in their wake.

Standard Chartered and Deutsche Bank are likely to be on the wrong end of this trend when they pay bonuses later this month. “They may suffer above-average rates of departures in Asia. Bonus prospects there are already low and even these expectations may not be met,” says a source in Singapore with knowledge of the banks. Deutsche’s bonuses are tipped to be poor globally, while Stan Chart is shifting its business toward corporate and transaction banking.

Some investment bankers are leaving irrespective of their bonuses. Compared with last year, bankers are generally more confident about risking a job move, says Singapore-based Farida Charania, group CEO of search firm Nastrac Group. “It’s a side effect of them seeing more vacancies being advertised,” she adds.

These openings aren’t only at other banks. “Many bankers are even more interested in a move to the buy-side or corporate M&A,” says Abeyasinghe from Morgan McKinley. “Fintech firms in Asia are increasingly competing for the same talent as investment banks and candidates are increasingly open to these opportunities,” adds Tam from Sirius.

Don’t get too excited about the year-on-year rise in recruitment – it comes off a low base. “The main investment banks have increased demand across Singapore and Hong Kong, but many were restricted on hiring early last year due to internal restructuring,” says Nick Wells, a director at search firm Webber Chase.

Neither is it becoming more straightforward to secure an investment banking role in Asia. “The job market is more active, but banks are more demanding when hiring, wanting candidates with even stronger profiles,” says Eunice Ng, a director at Avanza Consulting. In Hong Kong, the ideal candidate must be able to work with Chinese clients by speaking Mandarin and having cross-border experience.

Image credit: Tatiana Ilina , Getty

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