The race is on to secure top banking talent in China as international banks firms to take full ownership of their joint ventures on the mainland and bolster their presence by recruiting locals or luring top bankers from Hong Kong.
“China coverage remains at the forefront of hiring, a situation compounded by the relaxing of the onshore JV rules which has led to international banks competing aggressively for talent,’ says Simon Roberts, chairman for Asia at Sheffield Haworth. “The onshore market remains extremely robust both in terms of deal flow and the demand for talent.”
Credit Suisse has become the latest bank to seek 100% ownership of its Chinese joint venture as it looks to offer more investment banking products to the region’s entrepreneurs. “China will have the largest pool of wealth globally, no question about it, in the next couple of years,” Helman Sitohang, CEO of Credit Suisse for Asia Pacific told Bloomberg on February 19.
Last June, Credit Suisse completed the purchase of a majority stake in its Chinese securities joint venture, Credit Suisse Founder Securities Limited. The Swiss bank has already relocated senior bankers from Hong Kong. They include Tim Tu, who was appointed CEO of the Joint Venture, and Daniel Qiu as head of investment banking and capital markets.
Banks are building out their China platforms both by recruiting Chinese nationals and redeploying talent from Hong Kong. However, as well as gaining control of their joint venture, banks also need to get a full securities licence to operate in China and until they do so they are keeping a lid on costs and headcount.
“While banks wait to get their full licences, they will keep their headcount lean and mean in China,” says Jason Tan, director at Reforce Group in Shanghai. “That means seconding senior vice presidents and one year MDs from Hong Kong and then hiring junior and mid-level talent locally to complete the team.”
Banks tend to want to populate the management of their China operations with existing executives they can trust, while also ensuring they have senior bankers with strong connections to the Chinese government. “At VP level and below banks are looking to hire Chinese talent but from director level upwards they want English speakers,” said Marcus Cui, a recruitment consultant with Kelly Services in Shanghai.
In November, JP Morgan took a 71% stake in its Chinese securities joint venture after completing the transaction to buy a 20% stake from one of its local partners. In January the bank named Houston Huang CEO and head of investment banking for J.P. Morgan Securities (China) Co. Ltd. and David Lau head of its China investment banking coverage- Huang is based in Shanghai while Lau will remain in Hong Kong.
UBS became the first foreign bank to take majority ownership of its China Securities joint venture in 2019, Last month David Chin told the UBS Greater China Conference that the bank plans to double its headcount footprint in China across all of its businesses in the next three to five years. The bank currently employs around 1,300 staff across wealth management, private banking and investment banking. Its investment banking headcount in China stood at 200 in 2019, and it plans to increase that to around 400 mainly by hiring local on the ground.
Morgan Stanley received approval for its China joint venture last year while in December Goldman Sachs applied to take full ownership of its Gao Hua venture. Bank of America, which is a laggard when it comes to establishing a joint venture in Chain is understood to have big plans to hire and secure a license in 2021
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