Two years ago trade finance staff were the darlings of the labour market in Asian finance. Their function was singled out as ‘safe’ and immune from job cuts, while hiring rates were healthy, particularly for relationship managers.
Now banks have slashed recruitment and cut senior employees, while trade finance RMs have become much less willing to move, even if big pay rises are on offer.
As recently as mid-2014 a hiring war for relationship managers in trade finance was raging in Singapore and Hong Kong, fuelled by new entrants trying to poach RMs from established players.
Mizuho was recruiting aggressively in Singapore as part of a wider push in transaction banking. Middle Eastern firms like the National Bank of Abu Dhabi were also stepping up their Asia hiring, as were Australian institutions such as Westpac and CBA.
“In the very recent past a good trade finance RM could get a job offer almost instantly and there was new headcount growth because these new firms were hiring,” says John Mullally, director of financial services at recruitment agency Robert Walters in Hong Kong.
“But there’s a definite slowdown this year. Most of the available roles are to replace people who’ve left and even getting sign-off for these vacancies can be difficult,” adds Mullally.
Global transaction banking revenues at major banks fell to $18bn in the first half of 2016, the lowest level for the period in the past five years, according to a new report by data provider Coalition. This was driven by “commodities volatility and volume declines, especially in Asia”.
“So much of trade finance is tied to commodities being bought and sold, and there’s less of that as the Chinese economy slows,” says Mullally. “Because banks aren’t making as much money from commodities trading, they have less need to expand their teams.”
Job cuts in Asian trade finance have so far been mainly confined to senior management level, says Farida Charania, Asia Pacific CEO of search firm Nastrac Group in Singapore. “The traditional image of trade finance in Asia as a safe job sector is changing,” she adds.
“Trade flows within the Asian region are historic and will continue to dominate banks’ strategies on how to win here. However, trade finance is also increasingly getting digitised and transformed,” says Sreeram Iyer, COO of ANZ’s international and Institutional business.
“Therefore, if you’re starting your career now, focus on where the action will be – such as cash management – because it is less and less about physical trade and documentation, and more and more about electronic and straight-through,” he adds.
Trade finance professionals, meanwhile, are now showing a strong preference to join or remain at banks with a large and long-stranding presence in the sector – HSBC, Citi, Standard Chartered and DBS being the prime examples.
“It’s mainly about the size and strength of your platform in trade finance. Compared to other areas of banking there’s less room for smaller firms to sometimes get a technical edge over a big competitor,” says Mullally from Robert Walters.
“So in this market people tend not to like the smaller, potentially less stable, players. Even if they’re offering a 20% pay rise, candidate will likely turn them down”
Correction: The quote from Sreeram Iyer above replaces a previous version which was incorrectly reported.
Image credit: Nikada, Getty