Banking Scene in Asia - what's the future?
I've been following league tables in Asia for a while, and it seems that they have become increasingly dominated by Chinese banks (not just CICC and Citic, but also places like GF Securities, Haitong securities). This has been true for ECM and DCM for a while, but it seems that in recent years this effect has been seeping into advisory/M&A as well.
What does this mean for all the BBs in Asia? (we already know Barclays is out, DB probably likely to follow). The banking scene in Asia in general? What's the landscape going to be like 5-10 years down the road? Which banks/BBs are best positioned to be the king of Asia in the long run?
Any discussion is welcomed.
US banks + UBS + HSBC have a lot of staying power.
HSBC is soaring, some say they'll be #1, but I'm not a believer. I look at dealflow, not deal volume. They landed a few big deals, but will not be a best-in-class advisory franchise.
by deal flow, you mean # of deals?
What is proprietary/unique about the services a BB can provide that the local banks can't?
bumping
A tedious and pedantic comment from me - Asia is a diverse place and not one banking market. Japan is largely a segregated market, as is Korea. You could broadly classify China + Singapore + Hong Kong as the China-facing market, with Hong Kong and Singapore also serving as regional hubs for teams working into Southeast Asia. India is a separate market itself, serviced mainly from IB branches based in India, some out of Singapore. Then you have the Middle East, which is mainly covered out of Dubai and Abu Dhabi. I'm not sure who covers the 'stans - likely the same as the Middle East.
Each of these markets has its own dynamics.
(edit) You can also break the China market down between the entirely internal Chinese market (driven out of Shanghai, Beijing, HK to a lesser extent, some presence in Shenzhen) and the China outward facing market. The latter is mainly run through Hong Kong, with Shanghai occasionally making noises about linking into the international market.
In the golden years between around 2006 - 2010, when it was all about China IPOs and thick, chunky rivers of money were constantly streaming through Hong Kong, Hong Kong was a great place to be. I was working in IPO-centered IB and I doubt I will ever get all-in comp in my life that will match what I made each year during those halcyon days, either on a pre- or post-tax basis.
Those were magical days and we shall not see their likes again, at least in China-based banking. (/edit)
[/pedantry]
Yes, I understand that Asia is a broad term.
I was mostly asking about HK/China focused banking, and how the local Chinese players will change the game (since LTs already clearly show that the days when BBs dominated are over).
I guess my main question boils down to this: what's special about the BBs that will make them survive as local Chinese players become more sophisticated? If the locals charge a lower fee and deliver services that are just as good as the BBs, what's the incentive to go to a BB? And which BB has the best business in Asia right now?
x
One big theme now is cross-border M&A (but it's overwhelmingly unilateral--Chinese companies scooping up assets overseas). As the political situation getting more unclear and economy faltering, rich people (and rich firms) are pulling all kinds of stunts to put their money overseas. Besides shops like CITIC and CICC, the boutiques (financial advisors) that have international background or management team are stacking papers.
Within the mainland, CICC is in decline since MS pulled out and their chief economist left for CITIC and the good old days when they were the only bankers who speak English are gone. Now boutiques (like China Renaissance) and american/HK advisory shops are cutting a huge share of the cross-border business. Don't get me wrong, they are still a top shop, especially in terms of entry-level compensations, training and exit ops, but they are not as glamorous as they used to be.
CITIC's edge over CICC is their retail brokerage service. In china, investment banks provide services for retail mom and pop investors, they have branches (like your neighborhood Wells Fargo) where people trade their retail shares and open their equity investment accounts. Some branches gets so big that they became the contact point for bigger clients, like IB clients and big corporates. But there's a very clear distinction if you've been to both CITIC and CICC's offices, with the CITIC a lot less "westernized", more bureaucracy, less structured training and stuff.
If the current trend continues, American/ European banks are not going to do well, period. The government just doesn't like them. If they want to sound like they are becoming more open minded, they are going to give the business to HK firms (HSBC and etc.).
Local firms who are smart enough to put focus on TMT and healthcare are getting the payoff now. GF securities, Huatai Securities and several others are now growing dramatically.
Just my random input.
Banking in Asia (Originally Posted: 08/07/2006)
Does anyone know anything about banking in Asia? I'm currently an undergrad and was wondering if any of you had any experience or knowledge in the recruiting process in the Asia-Pacific divisions of BB. Is the payscale comparable to positions in NY? Is it more difficult to obtain a position abroad as a US student? (i speak 2 asian languages)
this is only China, not asia, though.
pay is the same. bonuses may differ depending on performance of group/region. as far as i know, hours are the same as new york.
to work at a BB in Tokyo, you need to be a native speaker of japanese and business level in English (IBD). i can't imagine anyone getting hired in Tokyo as an analyst without being fluent in Japanese.
Hong Kong and Non-Japan Asia--work is done primarily in English so I'm not sure how necessary it is to speak an Asian language. obviously an advantage if you were being placed into a country coverage group.
if you're interested in ibanking in Tokyo, check out www.careerforum.net.
you can easily get a job in sales & trading in japan without speaking any japanese. for pure banking, though, you have to not only be fluent but native, and understand all the cultural nuances, etc. but you can definitely get jobs selling japanese bonds to non-japanese investors, and make big, big money, with an expat package that includes housing and a daily stipend. I know, b/c I did it, and there were tons of westerners there who didn't speak any Japanese. Great gig.
Hey Clint, Are you talking about working for an American BB that has shop set up in japan OR japan investment banks?
American or European BB.
wow how do you get a BB firm to expat you? especially if your just an analyst? or even associate? because aren't you at the bottom of the food chain?
probably can't do it as an analyst, but definitely as an associate, as long as you've done great work and can offer something to justify it. there's a huge demand for english speakers who can reel in investors from the UK, Australia, and North America, and at the same time a lot of experienced people don't want to drop everything and live in a far off country away from their family, etc. so as an associate, i think you could do it.
does anyone know if banks recruit summer analysts for their S&T division in Tokyo?
There is a huge market in S&T, prime brokerage, and a few other divisions of people who don't speak Japanese. Haha Indojin, name is a little too revealing deshou?
anyone know what a typical package looks like for a fresh graduate going into S+T in Tokyo at a BB?
my general preconception is 60k base + 10k relocation + bonus + ??? (housing? sign-on?)
does anyone know the starting pay for a mba graduate working in india at a BB ibd?
League Table credits can be misleading because many times pure Chinese firms tag along on big deals as silent joint bookrunners and take no fees for deal credits. Clients usually insist that a couple of China banks get included on mandates because of senior relationship and quid pro quo for cheap loans. HSBC and StanChart dominate capital markets deals, but their fees are really small compared to the norm in the US/Europe. But when it comes to high-fee, complex deals that span cross-border and actually make money for the firm, traditional strongholds like GS/MS/JPM/ML/UBS take the crown.
IB in Hong Kong (Originally Posted: 02/24/2007)
What's the best way to apply for IB analyst job in Hong Kong? Agent or direct email? Any information useful would be great. Thanks.
Search on this topic -- lots of new and recent discussion on HK lately.
This sounds interesting as I might study abroad in HK soon.
Any opinions about Investment Banking in South East Asia? Local firm vs. international firm?
Investment Banking- HK (Originally Posted: 09/07/2007)
I go to a target school, and I wish to apply for a SA IBD position for a BB firm in Hong Kong. Can anyone provide tips/faqs regarding the application and interview process? Any help is much appreciated. Thanks!
A few key things you should prepare going into the process:
Know why you want to do banking. What's your purpose, interests and goals in doing i-banking? Also, why Hong Kong and not NY?
Have a good understanding of the technical stuff such as valuation and general financial concepts.
Have a few good reasons why you want to work for the firm you are applying to.
From what several of my friends in Asia tell me:
Chinese investment banks are slowly dominating most Asia Pacific investment banking activity. Previously (2006 - 2011) US/EU investment banks were the key gatekeepers to the capital markets but that's no longer the case - Chinese IBs (CITIC, Guotai, CICC, GF and a bunch of others) are dominating the space, even the ECM area where traditionally US/EU IBs were the main service providers. You can verify this by looking at ECM/DCM league tables where you can barely see any US/EU banks. Can't pinpoint the exact reason - some say it's cuz the Chinese gov wants domestic banks to rise to the intl platform, but regardless such is the case.
Wealth Management is where it's at for Asia. UBS/Citi/CS (the top 3 WM players in Asia) are all investing heavily into the WM space. Heard competition is absolutely insane there but given the growth of millionaires & wealth in Asia, WM is hands down definitely where it's at for Asia.
US/EU IBs still come into play for Cross-Border M&A, but keep in mind that's usually far few and between. 2016 is an exception with a flurry of Cross Border deals (ChemChina/Syngenta, KraussMaffei, the dropped deal with Marriott/Starwood and etc.) but that is more an anomaly than the norm.
Several guessed that in the long term, only the top 3-4 BBs will be profitable and thrive in Asia, with the bulk of Chinese IB deal flow going to Chinese IBs, and US/EU banks only tapped for the occasional cross-border M&A advice (or if it's a large company, for an IPO in a Western exchange).
Keep in mind this is strictly only for IB activity - other financial services just as cash management, transaction services, treasury services etc (aka. the stuff that Citibank dominates and is best known for) will continue to thrive and be profitable.
IB opportunities in Asia? (Originally Posted: 08/13/2008)
I am an international student and will study for the master of computer science program at UPenn since next month. In fact, I have interests both in computer science and finance. The question is: how is the opportunity of getting into a branch office at Hong Kong, Beijing or Shanghai of a BB after my graduation?
Before i going to my master i received my B.S. of computer science with a 3.7 GPA at a top university in China, but in mainland China it is almost impossible to get into those IBs with bachelor degrees even you apply for analyst positions.
Doing cs-related jobs is OK for me, but investment banking is still my first option. I am not the one who knows nothing about finance but keep dreaming of getting an IB job. In fact, I took lots of economics/finance courses in the last four years and have passed CFA level 1. The long-term goal for me is to get a MBA degree at a top-5 B-school after 2/3 years of aggressive working experience. As a result, i prefer to work in an IB instead of an engineering company after getting my M.S. in CS.
Could anyone here give me some advices if i want to get into those BB's branch offices in China/HK? What should I do in these two years if I want to archive my goal? In fact i have already checked the placement reports of cs masters at upenn and many of their graduates go to finance industry, but I guess most of them are US citizens and are going to NYC while my goal is joinning the offices in China.
Thanks in advance.
OK this confirms a lot of my suspicion. Thanks!
Any idea on which BBs are best positioned to remain relevant for those cross-border M&As?
thanks, this is insightful. appreciated, buddy
You don't want to work in Asia... in NY, if I was lucky, I could leave the office before midnight most of the time, and, if I wasn't lucky, I could walk in the next morning at 11:00am and no one would say a word. In Asia, it is commonplace to work until 4:30 every night, and you're still expected to be in at 9 on the dot the next morning. (Guess where I am now? Guess what time it is now?)
My best advice for you is to make sure that you speak English like a native speaker. What struck me the most about SA hiring in Asia was that they almost exclusivley hired people who spoke English as if it was their mother tongue (with very few exceptions). Naturally, most of the people hired for SA positions were kids from Asia going to school in the US....so you already have that. I know people get annoyed when the topic of speaking fluent English is brought up, but from what I can tell it is definitley a deciding factor. Your Master is two years, right? So just apply for SA for next summer and specify you want to work in China or HK.
Regarding b2's comment....he is definitley right about the hours. Some people really seem to live in the office.
For IBD ppl based in HK (Originally Posted: 03/04/2009)
For analyst within IBD, does the firm offer you housing & meal allowance and how much is it?
for housing allowance..around 15K HKD - 20K HKD per month, but rumor has it that some banks will cut it. for meal allowance, it's 150HKD -200HKD per night...so yea, HK IBD earns much more than the ones in NYC..esp tax rate in HK is 10 percent compare to 35%+ in NYC.
Thank you.
HK Banking (Originally Posted: 05/18/2009)
Has anyone or does anyone work in IB M&A in HK? will english get you by or are most people bilingual and deal negotiations conducted in mandarin? or cantonese?
thanks in advance for your replies-
I have a friend who worked in ML IBD in HK. Didn't need Mandarin as far as I know.
Working in MM IBD in China (Originally Posted: 03/02/2011)
Hello!
My situation: 3.4 GPA, non-target, no BB offers (no surprises) I'm tri-lingual (English, Mandarin, Cantonese) and thought I'd try my luck in China. I'm staying in Shenzhen right now.
I'm looking at firms such as Guosen Securities, Haitong, basically all the top-ranked MM firms that focuses on getting SMEs listed on the Chinext exchange in Shenzhen.
Middle market is loosely used here because the aforementioned firms did 4-5$ B USD in deals last year.
What are everyone's thoughts on this? Any advice is sincerely appreciated. Thank you.
post resume plz
3.4 from non target - getting into top MM -- good luck! If I were you, spend your efforts on boutique banks that specialize in cross-boarder transactions (with the majority flowing from China to US/vice versa)
Do you have other options in the US? If China is your only option, why not? Full-time IB anywhere is better than nothing.
finance ppl in Asia (Originally Posted: 08/14/2012)
i work in Asia and totally agree.. moral system is all screwed up
http://www.8financestreet.com/users/hotasianbankerf23/posts/54-asian-fi…
Only in the land of the concubines. It is a part of the culture. Emerging markets have more people who are uneducated-new-rich, which mean more splashing around to display wealth. The same thing in Thailand, Singapore, Malaysia and Indonesia as well.
Finance in Asia? (Originally Posted: 03/06/2018)
I went to Hong Kong while I was in high school and absolutely fell in love with the place, I decided that I'd make an effort to try and work there some day. Im half way through college now, and its looking like when I do begin to work, its gonna be in New York or somewhere around there.
I was wondering how hard it is to move over to Asia within industries like IB/HF/PWM/PE, etc having no long term experience there and not knowing any asian language. Is it even possible? What things can I do to make myself a better candidate?
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