The radical revamping of commercial and institutional banking offers challenges and career opportunities
From functioning under a multitude of new regulations to higher operating costs and shifting client demands, commercial and institutional banking has undergone far-reaching changes over the past five years, along with most areas of the finance industry.
Sweeping changes have involved trimming headcounts and, in some cases, the closure of entire departments, notably in fixed income. As financial institutions look for ways to cut costs and boost efficiency, departments have been merged and job responsibilities expanded.
Recruiters say that while the focus on luring specialists and retaining the best talent continues, hiring in investment banking and commercial financial services in Hong Kong is likely to remain stable in the foreseeable future.
Chris Aukland, regional director at Michael Page Hong Kong, says that due to headcount restrictions, many major investment banks are focusing on strategic hires and replacement hiring. “Across all areas, employers are looking for professionals with a strong academic background and relevant experience,” he says, adding that he sees steady hiring in Hong Kong-based mainland banks.
As investment banks expand across Greater China, Marc Burrage, regional director at Hays in Hong Kong, says demand is growing for Putonghua-speaking credit risk analysts, as well as commercial and corporate banking relationship managers – especially those with experience managing local mid-caps and China corporate clients. “To be considered for these roles, candidates must to be able to read and speak Chinese fluently,” he says.
Meanwhile, as Hong Kong-based local and international firms focus on building asset management business, experienced sales and development professionals are required to move into new markets. Burrage says that with new regulations coming on stream, experienced regulatory-reporting candidates are needed to monitor liquidity and manage balance-sheet controls.
As companies and governments across the region become more familiar with the benefits that private-equity investment can offer, more deals are expected, says Kok-onn Chia, president of the Hong Kong Venture Capital and Private Equity Association, the oldest and largest group of its kind in Asia.
According to a 2013 Bain and Company report, private equity is poised to capitalise on robust debt markets, a likely resurgence in corporate M&As, signs of a recovery in IPOs and the solid support of institutional investors.
Because of the dynamic nature of the private-equity sector, Chia says there is no good or bad time to enter the industry. However, he advises fresh graduates with no experience to spend time building up work experience before entering private equity. Candidates with MBAs tend to be more suitable, as they generally have three to five years’ work experience.
Chia cites the usefulness of soft skills such as teamwork, working to deadlines, strong initiative, and the ability to build relationships with executives of potential investees. “The private-equity industry is one of those sectors that require learning on the job,” says Chia, who also emphasises the need for a strong, experienced mentor. “As part of the apprenticeship model, it is important to learn from the ‘right’ master to cultivate the values of investing, smell the right deal and develop lateral thinking,” Chia says, director of family office firm, Grace Financial.
To succeed in private equity, Chia adds it is important to nurture a curious mind, be aware of cultural sensitivities and acquire the ability to handle people during good and tough times.
Another big trend is the growing demand for family-office services, as the number of millionaires in Asia-Pacific is expanding at three times the global rate. This is according to the findings from the latest “Asia-Pacific Wealth Report”, published by the Royal Bank of Canada and Cap Gemini.
Amy Lo, head for ultra-high-net-worth individuals (UHNWIs) for Asia-Pacific at UBS, says that with more and more Asian tycoons about to transfer their businesses and wealth to the next generation, initiatives by the UBS Family Advisory Services go beyond the prerequisites of finance and investing. These initiatives include advice on family decision-making, talent development, business and generational transitions, wealth-structuring solutions, risk management, family governance, the set up of family offices, and philanthropy.
“The three tiers of needs of our UHNWIs are generally family, business and investments,” Lo says, adding that advisers who work in this area must be highly skilled as they need to work closely with wealthy individuals and families.
For example, Lo says experienced in-house accountants and lawyers form part of the UBS advisory team that helps wealthy clans set up family-office operating structures and governance, and ensure the continuity of philanthropic activities. In Asia, UBS has over 20 specialist advisers, from a total of about 80 worldwide.
Following reports of recent high-profile family disputes over wealth transfer, Lo says wealthy Asians are becoming increasingly aware of the need to involve family members in wealth-transfer planning as early as possible.
She says family roundtables and workshops, together with the UBS Next Generation programmes, bring family members together to discuss important issues ranging from running a business to family succession.
“These roundtables provide a platform for inspiring discussion, useful guidance and formulating practical solutions,” says Lo, who stresses that discussions on family succession are likely to be personal, so advisers need to be good listeners and excellent communicators.
With experienced wealth-management professionals in short supply, UBS operates its own Wealth Management Associate Programme designed to build a pipeline of talent in Asia. The 12-month programme includes intensive classroom training at the UBS Business University, rotating assignments, and on-the-job coaching by dedicated managers.
After holding the global crown for the most IPOs for several consecutive years, funds raised through listings on the Hong Kong Stock Exchange hit a four-year low last year, but now look to be regaining ground. In the first half of the year, IPO funds raised hit HK$39.5 billion – up 28 per cent from the same period last year.
Edward Au, co-leader of the national public offering group at Deloitte China, says encouraging economic news from the US and the mainland, combined with the loosening of Hong Kong listing rules for H- shares issued by mainland companies, should boost fundraising activities. He adds that about 700 mainland companies are preparing to list in Hong Kong. “More IPOs will mean more participation for auditors, risk management specialists, the banking industry, and the legal and accounting industries,” Au adds.
He says more listings would provide opportunities for Deloitte professionals to work on a wider variety of projects. “Working on IPO projects provides excellent insights into how different businesses operate.”
As Deloitte is a full-service firm, its professionals are involved in a broad range of IPO disciplines, including auditing, preparing and readiness for listing, enterprise risk and tax issues. Among roughly 300 graduates joining Deloitte China this year, several recruits – who have gone through the initial introduction and classroom training – will gain their first experience of the IPO processes by working in teams with guidance from senior accountants and mentors.
Behind the glamour of being involved with IPOs, young accountants gain exposure to the amount of hard work involved. At the same time, Au adds, they are able to develop skills that go beyond the accounting sector. “As they gain experience, accounting professionals not only talk to their clients at all levels within a company, they also work with professionals from the finance and legal sectors,” says Au, who highlights the need for strong communication skills.