ICBC recently agreed to acquire an 80 per cent stake in the Bank of East Asia’s US subsidiary for US$140m. This deal makes ICBC the first Chinese state-owned bank to expand into retail banking in the United States.
Large Chinese banks are also growing organically overseas. Bank of China offers yuan trading service to US consumers, CICC is determined to expand into South East Asia, and ICBC is tapping into the American retail and SME banking business.
How are these moves going to affect the job market in the long term? One thing is certain: there will be more opportunities for banking professionals who want to work for Chinese banks. And on the talent-supply side, I also think Chinese banks will become more attractive to foreign bankers who formerly enjoyed the prestige of working for bulge bracket firms.
The reasons for this are threefold:
1) More people are realising that the rise of the Chinese financial industry has staying power.
2) The resources of Chinese banks are large enough to attract and handle large deals.
3) The determination of Chinese banks to expand into overseas is firm, especially in emerging markets.
As Chinese financial institutions expand overseas into the US, European and Asia Pacific regions, there will be some opportunities for overseas-based non-Chinese candidates. But these people need to understand the direction that Chinese investment banks are pursuing and ensure their own interests are aligned.
Foreigners must consider the culture of Chinese banks, especially their ranking structure. Most senior positions are held by Chinese nationals. Foreign talents know there is a glass ceiling within Chinese banks, just like there is within some Japanese financial institutions.
Mandarin is another hurdle for non-Chinese candidates. Firms always prefer someone who has a strong academic track record, excellent working experience, and is fluent in both Mandarin and English.
Chinese banks may be increasing their global reach, but they have yet to become global talent magnets.