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Hong Kong bankers are facing more job losses due to China’s slowdown and high wages

Vaseline 2 months ago

(Bloomberg) — Hong Kong investment bankers could face more job cuts as the slowdown in Chinese deals continues and employers look to trim their highly paid workforces, according to Bloomberg Intelligence.

An estimated 200 Hong Kong bankers lost their jobs in the past year, senior analyst Francis Chan wrote in a report published Monday. Because pay for senior bankers is 40 to 70% higher than that of counterparts in Singapore, bankers in Hong Kong may find their pay a “curse” as employers make cuts, Chan writes.

“More global banks may further reduce urban workforces to achieve greater cost savings, especially during China’s slowdown,” Chan said.

Global financial companies have been cutting staff at investment banks in Asia due to a deal drought, deteriorating US-China relations, a crackdown on private companies and a real estate crisis. Morgan Stanley and HSBC Holdings Plc are among the banks that have made cuts to their investment banking base this month, with Hong Kong and China bearing the brunt.

Hong Kong IPOs have been sluggish, with yields falling last year to the lowest level in more than two decades. Money raised through IPOs fell another 29% to about $605 million in the first quarter, the worst three-month stretch since the global financial crisis.

While Hong Kong is seeing a higher volume of IPO filings, the city’s IPO prospects may remain “poor,” the report said.

Hong Kong’s US dollar and Hong Kong dollar bond issuances have fallen significantly from their 2020 peak, according to Bloomberg Intelligence.

Analysts and associates at investment banks in Hong Kong earned 30 to 100 percent more than in Singapore, mainland China and Japan, while managing directors and directors earned 40 to 70 percent more, according to a Hays Asia survey in late 2023.

Compared to investment banking, the labor market in wealth and private banking remains stable, with wealth funds flowing from the mainland to Hong Kong, benefiting banks such as HSBC Holdings Plc, Standard Chartered Plc and Bank of China (Hong Kong).

“Hong Kong’s financial professionals may face different fates due to the different prospects for the capital markets and asset management industries,” Chan wrote.

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