It would appear to be fortuitous timing for investment bankers in Hong Kong who’ve just been axed by Goldman Sachs or Bank of America: Citic International is hiring.
The firm had reportedly decided to build M&A and ECM teams in Hong Kong in a bid to become a full-service investment bank there.
But moving to Citic may not be quite the career panacea it seems for recently redundant or longer-term unemployed bankers, warn headhunters.
The benefits of landing a new job in a weak labour market should be balanced against the risks of joining.
“For example, Citic is a long way from being able to replicate anywhere near the capabilities of a proper cross-border M&A business,” says Christian Brun, managing partner of Hong Kong search firm Wellesley Partners.
“It’s always risky to go into a new investment banking team, which has a short track record,” adds Eunice Ng, director of headhunters Avanza Consulting in Hong Kong. “And moving from a Western firm would be a lot of adjustment because the culture and standards of practice will be different.”
Another Hong Kong headhunter, who asked to remain anonymous, adds: “The risk at Citic is whether you’ll actually be able to navigate their internal hierarchies to achieve the results you want.”
Moreover, Chinese banks like Citic generally pay lower salaries than global banks do, albeit with potentially higher bonuses. “But I doubt that overall compensation levels will match,” says former Jefferies trader Warwick Pearmund, now an associate director at Harvey Nash Executive Search in Hong Kong.
Questions are also being raised about Citic’s dedication to building in investment banking. The firm had planned to bulk up in IB in early 2015, following the recruitment of former Macquarie banker Andrew Low as head of international investment banking.
“It said the exact same thing back then and then promptly put everything on hold. Some bankers received offers which were then pulled and the whole thing ground to a halt. That may mean some people think twice about Citic now,” says a headhunter with knowledge of the bank.
Despite these problems, the sheer number of bankers currently looking for work in Hong Kong suggests that Citic will convince enough people to join its ranks.
“It shouldn’t too hard in the current environment,” says Pearmund. “Unemployed bankers will either be pragmatic, and see Citic as a way of staying in the game, or stubborn and wait for another Western IB to come knocking – good luck with that.”
And while Citic’s investment banking platform in Hong Kong doesn’t currently match those of global firms, it’s dominance in the mainland market could prove appealing to bankers with a China focus.
Citic finished second (behind China Securities) for China investment banking revenue for the first nine months of this year, according to new Dealogic figures.
“It could be an interesting firm to work for if you want to take your IBD product knowledge and experience from a Western bank apply it to the Greater China region, perhaps even building a brand new desk,” says Ng from Avanza.
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