The boom in demand for China coverage bankers is spreading from Hong Kong to Singapore. Both corporate and private banks in the Republic are trying to take on more China-focused relationship managers, although their hiring is stymied by skill shortages.
Chinese businesses are increasing their direct investments into the ASEAN region, for which Singapore serves as a banking hub. Last month Citi expanded its team that covers these companies. It opened a second China desk in Singapore, employing 10 relationship and product managers and offering services including cash management, trade financing, hedging and FX.
DBS, OCBC and UOB are also expanding their local China desks for corporate clients, building on relationships established by their mainland offices, says a Singapore-based source with knowledge of the banks.
“Most roles in Chinese corporate banking in Singapore are RMs and product managers, although they also need people in the credit department to analyse new transactions,” adds Gary Lai, Southeast Asia managing director at recruiters Charterhouse Partnership. “More Chinese companies are using Singapore as a springboard into other ASEAN countries, where there’s huge appetite for infrastructure, FMCG, retail and property projects.”
Meanwhile, local and foreign private banks in Singapore are also recruiting more mainland-focused RMs for their North Asia desks, says ex-private banker Liu San Li, now head of banking at BTI Executive Search. “The hiring started slowly back in 2014 with firms like UBS, Credit Suisse and Bank of Singapore having two to four China RMs in a typical North Asia team of about 20 people,” he says.
“In 2016, more banks – DBS, HSBC, Stan Chart and Julius Baer – joined the game and became quite aggressive,” adds Liu. “This year almost all private banks are aggressively hiring China RMs in Singapore. I think we’ll eventually see 50% of North Asia teams in Singapore comprising RMs who just cover the China market.”
This recruitment is not straightforward, however. “While many Singaporean private and corporate bankers can converse in Mandarin, there’s a shortage of candidates who are fluent in business-level Mandarin,” says Lai. “Some banks have managed to hire Chinese bankers who’ve studied or worked in Singapore, but there’s still a shortage of these people, especially at the director levels.”
“There also aren’t many people in Singapore who actually understand the mainland Chinese market and culture,” adds Liu. “You need to know Chinese clients’ risk appetite and product preferences, and how to manage their expectations and complaints. And you need to know how to network in China.”
Private banks want to hire RMs who can win business from wealthy Chinese clients as they increasingly pour money into Singapore. The city state is the second largest destination, behind Hong Kong, for offshore investments made by the mainland’s booming population of millionaires and billionaires, according to a Capgemini survey.
The number of Chinese high-net-worth people who cite Singapore as their preferred foreign place of investment rose from 15% to 21% between 2015 and 2017, according to Bain & Co. Hong Kong remains the top location, but its popularity fell by 18% over the same period.
Investments in Singapore typically face less scrutiny from the Chinese government, according to a report by Bloomberg earlier this month. Under new tax agreements signed last year, Hong Kong will disclose account holders’ information to 75 jurisdictions, including mainland China. Singapore has a similar transparency arrangement with 61 markets, but it doesn’t cover China.
Related articles:
A 13-step bankers’ guide to successfully schmoozing Chinese clientsYou're covering mainland China from Hong Kong or Singapore. This is how to work your client connections.
“Working in Chinese finance was traumatic for me, but more Singaporeans should do it”Matt Huang was so traumatised by working in Chinese finance that he wrote a best-selling novel about it. But now he wants more Singaporeans to work there.
Chinese vs Western banks: the battle to hire you just got a lot biggerCiti or CITIC? Goldman or GF Securities? Why deciding where to work in Asian banking is getting much more complicated.
Image credit: kurmyshov, Getty