China drives need for relationship skills
Relationships will always be important in banking jobs, and with a growing trend to look to the mainland China market for business, the need for relationship skills has never been more paramount.
This year, we have seen an increase in demand from banks for candidates experienced in the debt capital markets (DCM) sector. A particular focus has been for bankers and researchers with experience in technology, media and telecommunications, consumer and healthcare, and in a few instances, energy, particularly renewable energy.
There is also a high demand for candidates with experience in real estate and mining. Both onshore and offshore China DCM have been in demand, but only a handful of foreign banks can participate in onshore DCM, so hiring has been very competitive in this space.
Banks have also been focusing on wealth management services as a more important source of revenue generation this year, with a number of new players active in the market in Hong Kong. These include Bank of Singapore and DBS, through its purchase of Societe Generale's private banking business.
These banks are hiring more "hunters" to expand their client base, while other banks with an established client base seek more professionals to manage their portfolios closely.
Mainland investment banks continued to ramp up hiring this year and have attracted serious talent away from international top-tier firms. Many roles have stipulated that senior banking candidates be mainland nationals, or Hong Kong candidates fluent in Mandarin and educated abroad. Ideally these candidates will have worked for a solid number of years in international banks, to be then approached by Chinese banks to join them in either Hong Kong or the mainland.
These are the bankers who will offer their new employers inroads to the big deals. As a result, the competition for candidates between the Chinese and Western banks has heated up significantly.
Such strong demand for candidates has also been prevalent in private equity and corporate banking, where high-calibre MBA candidates are particularly sought-after.
Ultimately, hiring decisions boil down to networks and relationships, which in turn will make the difference between getting a deal closed or not. Relationships are still key, but the definition of what that relationship is has changed.
Trust and who you know are key to doing business in the mainland. But now, rather than just knowing or being related to a particular person in, for example, a big state-owned enterprise (SOE), now one needs a broader network of contacts, which includes entrepreneurs as well. This is in contrast to the "princeling", who is only connected to one person in one SOE.
In addition, a good relationship with regulators will always be beneficial. As China internationalises its financial system, this attribute has become more apparent on job descriptions for mainland investment banks.
And with regard to "princelings", foreign banks that have come under scrutiny by regulators are extremely cautious, and are even reluctant to be seen as hiring such candidates.
There has recently also been a shift of hires for more mid-cap listings and mergers and acquisitions. The mainland has been a leading emerging market for several years now, and the country's continued economic growth has increased M&A activities.
As a result, demand for candidates with associated M&A skills and the relationships to introduce the deals have also intensified.
Bankers with greater international reach, more diversified skills, more in-depth product knowledge and multilingual abilities will be sought after more as Chinese firms continue their pace to enter M&A deals with overseas companies.
Philip Quinn is the manager of the banking and finance team at Kelly Services Hong Kong. With eight years of recruitng experience in the banking sector, Philip is in charge of bringing Kelly's banking and financial services clients a more complete and synergised service.