Does this mean that juniors should be looking for a way out, or students should be abandoning their career plans? Not necessarily. There are lots of (non-monetary) reasons to stay in Asian investment banking.
1. Plenty of other people want your job
Are global investment banks in Asia receiving fewer applications in the face of competition from Chinese banks and tech giants? Are they cutting graduate roles as they make senior layoffs? No. Citi, for example, is taking on 200 grads in Singapore in 2017 (about the same as this year), while numbers are stable across Asia at Credit Suisse. “Students today do have more options outside of banking, and banking has been through challenging times these past few years. But I haven’t seen any decline in interest in graduate jobs at Citi,” Jorge Osorio, head of human resources at Citi in Singapore, told us.
2. It’s all about outbound M&A
Whether the Trump presidency helps or hinders Chinese M&A deals in the US is unclear at this stage. But over the longer-term, overseas acquisitions by mainland companies are still seen as a boon for the investment banking sector in Asia. A Hong Kong-based analyst we spoke with says the potential for more outbound M&A is a key reason why he’s upbeat about his career prospects. “It will be a major driver of global transaction activities since many Chinese companies are seeking growth and advanced technologies in North America and Europe.”
3. Your junior exposure will be sought after
As Chinese companies start to dominant Asian M&A and capital markets, investment banks in Hong Kong are finding it increasing tough to rely on foreign talent to execute and initiate deals. If you can gain Greater China exposure early in your career, you should remain sought after in the sector. “In a dynamic, emerging market like China, everything – mergers, due diligence, structuring, execution – is so different from working on deals in the US and Europe,” says Eunice Ng, director of headhunters Avanza Consulting in Hong Kong.
4. You could land a fast-track promotion
The investment banking talent pool in Asia is still thinner than it is in the West – and in some cases that means people rise up the ranks more quickly. In China this year, banks like Standard Chartered and J.P. Morgan have become more willing to grant senior titles to fend off competition for talent from technology companies, buy-side firms and online lenders.
5. And some early Guanxi
Guanxi (personalised networks of influence) is critical to career success in Asia. And investment banking puts you in front of senior leaders and lets you build client networks at a much younger age than in most other industries. “IB gives juniors the opportunity to develop a network of contacts who are likely to remain as business leaders in the future, which will be of great value in their later careers,” says Adam Jeffes, associate director of financial services at recruiters Morgan McKinley in Hong Kong.
6. Get in on billionaire deals
Banks with a strong wealth management franchise – in particular UBS and Credit Suisse – are trying to sell more IB products to business-owning clients. This is opening up new doors for deal-making in a region which boasts more millionaire and billionaire wealth than any other.
7. Secure better soft skills
“Aside from developing strong financial analytical skills – particularly if working in M&A and sector teams – analysts will get a strong eye for detail, a commercial mindset, and project and stakeholder management skills,” says Jeffes. “Regardless of whether you remain in banking or go into other industries, these are extremely valuable skills to acquire.”
8. There are always escape routes
If you stay in IB as a junior, more escape routes will open up once you’ve clocked up at least four years’ experience. The Hong Kong analyst say he’s excited by the “opportunities to exit” investment banking, particularly into consulting and the traditional routes of hedge funds and private equity. Over the past year, however, an increasing number of Asia investment bankers have been moving into corporate development roles, with Chinese tech firms a particularly popular destination.
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