Investment bankers and corporate bankers in Asia now “respect” each other a lot more than they did just six or seven years ago, says the Singaporean woman who used to run Citi’s APAC corporate bank.
“In the past, there wasn’t much mutual respect. People in IBD, for example, felt that corporate bankers didn’t really understand complex products,” says Agnes Liew, who left Citi in 2017 after 35 years at the firm. “There was some truth to this as corporate banking traditionally focused on balance-sheet transactions and there was little interface with M&A or even fixed income. Large banks were more segmented than they are today.”
Corporate bankers in Singapore and Hong Kong were unfairly labelled as “plain vanilla” by some investment bankers, says Liew. “That’s because they were seen as people who just kept the lights on at the bank and didn’t seek high returns. Corporate banking was seen as a stable long-term career choice, but not necessarily an exciting one, and that was a turn-off for some graduates.”
Investment bankers across Asia weren’t even accustomed to telling clients about corporate banking products, such as trade finance, that could potentially benefit their businesses. “And some corporate bankers in turn felt that investment bankers would just rip off their clients by charging high fees, so they weren’t motivated to share information with them,” says Liew, who has relocated from Hong Kong back to Singapore since leaving Citi and now runs an upscale gym.
The 2008 financial crisis was, predictably enough, a turning point for relationships between the two sets of bankers, and many firms now operate joined-up corporate and investment banking divisions. “It became harder to originate new IB deals in the wake of the crisis, and at the same time Basel III forced more banks to focus on the cost of capital,” says Liew. “As a result, banks began to encourage corporate and investment bankers to work more closely together, both here in Asia and globally, to optimise returns.”
Liew says it then took about three to four years for a more collaborative approach to actually bed-in within large banks. “The mindset slowly changed as more corporate bankers and investment bankers saw the mutual benefits of co-operating to make more deals happen. Now the complaints have reduced significantly and have become the exception not the norm.”
Corporate banking now demands a wider range of skills, and it has become more attractive as a job function, adds Liew. “For example, as a relationship manager in corporate banking you increasingly need to know how to sell more complex corporate-finance products and/or sell to financial institutions.”
Meanwhile, in Singapore, corporate banking job opportunities outnumber those in IBD. “While Singapore is the Southeast Asia hub for investment banking, its slice of the IBD pie isn’t big compared with North Asia,” says Liew. “SEA is a collection of small and mid-sized markets which are very different from each other, making the region difficult to cover for bankers. And you typically don’t see much M&A going on in SEA when compared with North Asia, for example.”
There’s still a pay gap between IBD and corporate banking in Asia, however, particularly at a junior level. “A junior corporate banking relationship manager in Singapore or Hong Kong is paid less than an investment banking analyst. But this gulf isn’t as big as it was in the past,” adds Liew.
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