If you’re a star corporate banker, a career change into investment banking could still be on the cards, said Clifford Lee, managing director and head of fixed income at DBS in Singapore.
Lee should know. After graduating from the National University of Singapore, he started his career as a corporate banker at Citibank in 1991, but switched to investment banking five years later.
Since then Lee has become a stalwart of the Singapore fixed-income scene, holding senior positions at WestLB, BankBoston and Commonwealth Bank of Australia before joining DBS, Singapore’s biggest bank which boasts total assets of $292 billion, in 2004.
He’s now responsible for debt origination and distribution, having helped DBS capture more than a third of the Singapore dollar bond market, more than the combined share of the next two players. Lee spoke to eFinancialCareers about the market trends that have shaped his career, why international talent is still needed in Asia, and why banking is all about overcoming obstacles.
In the early 90s, corporate was the most exciting and most developed area in Singapore banking. It offered a great grounding because of its diversity – everything from trade to FX to cash management. By the mid 90s, investment banking, in particular M&A and equities, was becoming more established in Singapore. But for me, fixed income was the asset class in IB with the most growth potential. The firm I joined, Peregrine Fixed Income, was one of the few dedicated Asian bond houses, so I got the chance to learn the trade quickly. I started as a credit analyst, then worked in sales, and then finally in origination before Peregrine went under during the Asian Crisis in 1998.
Yes, in fact for very good corporate bankers, I think it’s easier now than in the 90s because the difference between the two divisions is eroding at many firms, including DBS. Investment bankers are increasingly relying on the client relationships forged by corporate bankers at their firms. And investment banking services are becoming an extension of the products and solutions offered by corporate bankers.
Asia has much potential as a financial market, but for a bank to succeed here, Asia cannot be just a nice-to-have, add-on business segment in your global strategy. It needs to be a major part of your global network as well as a self- sustainable business operation in the long-run.
I was looking for a firm that was dedicated to the region and positioned to be a dominant player here. I was recruited to build a regional debt capital market origination capability and a global credit sales platform. DBS is naturally placed to be a major player in the Asian credit market, as is increasingly recognised now.
First, companies realised after the GFC that they couldn’t rely on loans for finance, and this marked a shift towards bonds. Loans have now come back a bit, but this lesson has been learnt. Second, the GFC threatened US dollar bond market access and as a result Asian currency bond markets, in particular the Singapore dollar bond market, the most transparent one in Asia, spiked up in relevance and activity. The final trend is that the investible funds for the fixed income market in Asia will grow even more dramatically over the next few years. There’s more demand for Asian bonds than there is supply right now, although the Asian allocation for percentage of global fixed-income funds is still only in single digits. Hence the potential for growth here is substantial.
I think they will. Although regional Asian experience is important in fixed income, so is broader international experience. While the issuers may be in Asia, the distribution is global. Asia is the market everyone’s looking at, but it can’t exist in isolation and we need people who know how to connect with the global financial system.
When I began I had no idea just how quickly the industry can change. The financial crisis taught us that you have to be nimble in banking. Nothing is set in stone and there will always be challenges on the horizon, so you should regularly step back from the market and evaluate the risk, see if you can find the next problem. If you can spot about 60 to 70% of these obstacles, you’re doing well.