Some international banks are ramping up hiring of Chinese dealmakers amid an uptick in activity driven by mainland companies listing in Hong Kong and a boom in convertible bond and follow-on offerings.
Headhunters and bankers said global banks that laid off bankers during a lull in deal activity in 2023 are now hiring again as China's wallet share increases.
Earlier this year, Morgan Stanley hired James Hu as vice-chairman of China from Bank of America, while JP Morgan named banking veteran Alex To as its China vice-chair.
Most recently, BNP Paribas hired Doris Jiang from Huatai Securities to head its China ECM team.
Additionally, two US banks are in the market for, and close to announcing, new heads of China, according to people familiar with the talks.
Besides these senior appointments, there has been significant movement among junior to mid-level front office bankers. Sources said Huatai Securities has lost junior bankers, with at least one other going to BNP Paribas. Meanwhile, many of HSBC’s China-facing bankers who were laid off in recent months are said to have found jobs at other banks.
“Last year it was about how China is dead, nothing’s going on and why do we have all these China bankers. Everyone got rid of a lot of them at the global banks and the Chinese banks cut back pay,” said a banker at a Chinese bank. “Now China is absolutely on fire, across every single sector and every single product.”
“Hiring is being done on the sector coverage side and there is huge amounts of hiring on the ECM side," he said.
Sid Sibal, managing director at Aster Recruiting, agrees.
“There has been a pickup in hiring, especially on the ECM side. But it is mostly replacement hires, not new teams. A lot of these firms made a lot of staff reductions, so they still have a lower headcount base," he said. “If things continue the way they are going, we will only see an improvement in hiring.”
The increased churn comes as activity related to China’s equity capital markets has gathered pace in recent months, primarily as mainland companies seek secondary listings in Hong Kong.
Year to date fees earned from China deals are up about 27% from a year ago to US$10.4bn, with fees from equity capital markets deals jumping 90% to US$1.7bn, according to LSEG data. Fees from debt capital market deals rose about 19% to US$7.7bn.
Global banks have been at the centre of some of the biggest deals.
When Shenzhen-listed Contemporary Amperex Technology completed its HK$41bn (US$5.2bn) Hong Kong follow-on in May, the world’s largest listing this year, Bank of America and JP Morgan were sponsors along with CICC and China Securities International, and Goldman Sachs, Morgan Stanley, UBS, and BNP Paribas were also on the deal.
On Thursday, Barclays, Citigroup, HSBC, JP Morgan, Morgan Stanley and UBS were on NYSE and Hong Kong-listed Chinese e-commerce giant Alibaba Group’s US$3.2bn convertible bond sale.
Supply exceeds demand
The rise in appointments comes after a long lull in hiring in Hong Kong as banks adjusted to a slowdown in Chinese deals in the aftermath of the pandemic and sought to trim costs. Global banks in the region cut jobs, while Chinese banks in 2023 and 2024 lowered salaries and curbed benefits, in addition to laying off employees.
With bankers at Chinese firms now increasingly likely to jump ship to global banks that are willing to pay them far more, Chinese banks are taking steps to hold on to them, including giving junior bankers pay hikes and creating new titles for senior bankers to be promoted to.
“Chinese banks may be taking steps to retain bankers on a macro level to reduce overall departures, but I don’t think there is a so-called battle because counteroffers haven’t begun,” said Aster Recruiting's Sibal. "There is still more supply than demand."
“At a senior level, Chinese banks have tried to some extent to offer people more money to stay if they have an offer. But the problem generally speaking is that the other offer is so high that they can’t compete with that. And if you’ve gone to the trouble of getting an offer, your credibility is at stake if you stay,” the banker at the Chinese bank said.
Sources in the market said some equity-linked bankers have even joined international firms on contracts. Contract hiring signals that banks are still unsure whether the recovery in China dealmaking is on firm footing, one source said.
Meanwhile, Chinese banks face challenges to hire in the midst of a boom because bringing in outsiders means paying the market rate. That is bound to upset the bank’s existing dealmakers, who are still being compensated below market levels, and bumping up their salaries would be expensive, the banker said.
Additional reporting by Fiona Lau