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Hong Kong headhunters talk of despair, money woes among bankers

It’s a hard time in the Hong Kong headhunting market. After the protests and the crackdown, the pandemic and the lockdowns, there was hope that hiring would return. It didn’t. And local banking headhunters say there’s little sign of an improvement coming soon. 

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“This is the most bleak that I’ve seen it here in decades,” says the chief executive of one local search firm, speaking on condition of anonymity. “There’s no confidence that it will get better, this is a secular change.”

The barren landscape comes as the Hong Kong stock market is off 40% from its 2021 peak, and follows a year in which banks from Morgan Stanley to Citi cut senior people locally. “Hong Kong is over” proclaimed former Morgan Stanley chairman Stephen Roach, last week in the Financial Times. Hammered by domestic politics, caught in the rivalry between the US and China, the wheels have come off Hong Kong’s bus, said Roach. HSBC this week wrote down a $3bn investment in its holding in China's Bank of Communications, prompting a 7% decline in its share price. At Goldman Sachs, Asia more broadly accounted for 11% of revenues in 2023, down from 14% in 2018.

Hong Kong’s demise is a disconnect from the past, when it was seen as the portal to the promised land of China. In his 2018 shareholder letter, JPMorgan CEO Jamie Dimon said the investments the bank was making in China would “result in international growth for years to come”. In 2012, Goldman Sachs then-CEO Lloyd Blankfein predicted that 80% of the firm’s future growth would come from the BRIC countries, including Russia and China. But for the past two years, Goldman has cut China bankers. In November, Goldman CEO David Solomon said the bank has pulled back from its “growth at all costs” approach and was treating paring back resources allocated to China due to uncertainty.

Hong Kong bankers’ problem is geopolitical. While bankers elsewhere in the world are struggling with slow deal flow and hoping for falling rates, bankers in Hong Kong are blighted too by fears that relations between Washington and China will sour, particularly under a potential second Trump administration. 

“There is general concern and caution across the board until we hear the outcome of the US election,” says another senior Hong Kong headhunter, also speaking anonymously. “There’s a glaringly obvious pending downside for foreign banks with a large US presence here.”

It’s not all gloom. Citi is swimming upstream and plans to launch a China-focused investment bank this year, for which it intends to hire 30 people. Local banks are hiring.  So are hedge funds.“The focus is shifting away from tier one US houses, to buy-side firms and Japanese banks which still have hiring appetite,” says the second headhunter. 

This may not be enough to lift local bankers' spirits.  After a year in which Hong Kong bankers who held onto their jobs had to work hard at looking busy, headhunters say Hong Kong bonuses are typically down 10% to 20%. With Hong Kong property prices also falling, one headhunter said bankers in the city are becoming preoccupied with their "own personal finances." There are worries, too, of further job cuts this year: "The current worry is how to bring in sufficient fees to survive."

Until recently, Hong Kong bankers had an out: during the pandemic and the first half of last year, many moved to Singapore. That flow seems to have subsided as hiring falters. And it's not clear that many would want to go, anyway. Headhunters are adamant that Singapore still pays less. Bloomberg, this week, said Hong Kong bankers typically earn 50% more. 

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AUTHORSarah Butcher Global Editor

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