Asia's top graduates still want to work in investment banking over other less glamorous parts of the financial sector. For corporate banks providing the bulk of job opportunities this is a problem: they're trying to expand, but are being scuppered by a lack of talent coming through the ranks.
“Historically corporate banking in Asia was not seen as a career path for young, ambitious graduates, so there’s been a dearth of talent entering the field,” says Nick Wells, a director at search firm Webber Chase in Singapore.
The most severe skill shortages within corporate banking are in transaction banking, say recruiters in Singapore and Hong Kong. Asia-Pacific wholesale transaction banking revenues are expected to triple to US$139bn by 2022 from 2012, according to a report by Boston Consulting Group. Standard Chartered, HSBC and Citi have the biggest market share in Asia transaction banking, according to research firm East & Partners, while ANZ, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, DBS, Mizuho and UOB are also hiring in the region.
Recruiters say they are finding it hard to fill roles for these expansionist banks. “There are simply not enough people to go around in corporate banking in Asia – especially transaction banking and relationship management – as the majority of graduates who are interested in banking have traditionally gravitated towards investment banking,” says Craig Brewer, director of recruitment firm FiveTen Group in Singapore.
Poaching experienced staff from IBD divisions is rarely an option either. “There are few investment bankers willing to take on corporate banking responsibilities,” say former headhunter Stanley Soh, now a Hong Kong-based regional country director of financial service solutions in Asia. “Considerably lower salaries and revenue generated per banker in a corporate banking role have made it a second choice compared to an investment banking career.”
A changing mindset towards corporate banking jobs in Asia?
Talent shortages in Asian corporate banking could ease in the future, however, if more graduates are drawn to the sector’s growing reputation for providing stable revenues and jobs. By contrast, the investment banking divisions of firms including Goldman Sachs, Macquarie, Standard Chartered, Nomura and CIMB have axed investment banking roles since January, while IB revenues in Asia have got off to a slow start this year.
“Let’s not kid ourselves – investment banking remains an attractive and sexy field for students,” says Professor Joseph Cherian, director of the Centre for Asset Management Research and Investments at the National University of Singapore Business School. “But after all the redundancies, reality has also sunk in and those seeking more stable careers in banking are now more amenable to jobs within corporate banking.”
Finance students traditionally looked on corporate banking jobs as “low in professional excitement” and “dim in career prospects”, says Professor Cherian. “This is changing as transaction services and infrastructure financing are becoming extremely visible functions, particularly in Asia. As intra-regional trade and infrastructure project activity here have shot through the roof, driving demand for talent, business schools like ours are now offering elective courses in these areas, as well as arranging student consulting practicum projects and special internships.”
Farida Charania, Asia Pacific CEO of search firm Nastrac Group in Singapore, says an increasing number of younger banking professionals are considering jobs which service the “day-to-day business” of the bank. “Not everyone wants to be at the mercy of the market – there’s a growing open mindedness among new candidates that wasn’t there a few years ago.”