“Humiliated” Asian bankers who quit Goldman for Chinese firms now seek return

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“Humiliated” Asian bankers who quit Goldman for Chinese firms now seek return

I’m a headhunter in Singapore and over the past 12 months I’ve seen a lot of investment bankers move to Chinese firms. CICC, ICBC and Bank of China are building teams in Singapore and are poaching from the likes of Goldman Sachs and J.P. Morgan (unlike in Hong Kong, they can’t really hire from each other because their teams in Singapore aren’t yet large enough).

But over the past six months I’ve seen another trend in Singapore: some of these bankers now want to return to work for Western firms after just a year (sometimes even less) at mainland institutions. They are calling me in desperation, trying to find a way back in.

Why did they join Chinese banks in the first place? Well, there were some push factors. Global banks, Deutsche being the most recent example, continue to make cuts in Asia, leading some to believe that Chinese banks are a comparatively safe harbour. Singapore investment bankers have also told me that they’ve been blinded by the growing dominance of Chinese banks in North Asian league tables, reckoning that the same phenomenon could eventually occur here in Southeast Asia.

Perhaps more importantly, many of the new joiners were handed big job-title promotions and were verbally promised large bonuses.

It hasn’t taken long for many of these illusions to be shattered. Base salaries are terrible at Chinese banks in Singapore (i.e. often 50% less than what you’d earn at a US bank), but candidates obviously knew this when they accepted their job offers. The main problem is that bonuses are falling far short of expectations, creating a gap in total compensation.

Bankers also say they’re not seeing the deal flow that they anticipated. It’s not so easy to call up a client you used to work with at J.P. Morgan and say, “hey, I’m with BoC now, but I’d still like you to give me business”.  In Southeast Asia, the brand recognition and reputation of Chinese banks is lower than it is in North Asia. Moreover, Southeast Asia is a more diverse region and mid-level banks (Chinese firms are still in this category) can struggle to make an impact because they’re newer to most SEA markets and don’t have such established connections .

On top of all this, it’s often culturally difficult, even for ethnic-Chinese Singaporeans, to adapt to the more rigid working culture of Chinese firms. Bankers tell me they grossly underestimated the cultural challenges, which are now a key reason why they’re now seeking a return to an American or European firm.

The problem, however, is that it’s hard (almost impossible in the current market) to come back once you’ve moved to a Chinese bank. Bankers are now feeling a bit humiliated – they risked a lot to get ahead in their careers, but it hasn’t panned out and their mistake has become obvious within a few months.

It’s not that the likes of Goldman will think your skills have suddenly fallen away during your stint at a Chinese bank; it’s that they will question your judgement. They will wonder why you made such a bad move in the first place and whether this reflects poorly on your ability as a banker.

Moreover, the job market in IBD in Singapore is small to start with and some banks are shrinking their teams. Why would Morgan Stanley or Citi accommodate you – above a candidate making a more conventional move from another Western bank – when they have so many people to choose from?

Morals of the story: don’t join a Chinese bank in Singapore unless you properly weight up all the pros and (many) cons. And if you do move, be prepared to work in the Chinese banking sector long-term – you may not have much choice in the matter.

Jacky Tuan (not her real name) is an investment banking headhunter in Singapore.

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