As Hong Kong lenders trim staff, prospects tighten for some expat bankers unless they change roles, take a pay cut

Chad Bray

As Deutsche Bank and other big banks reduce staff, expatriate financial workers who are made redundant and want to stay in Hong Kong may find it more difficult if they are unwilling to learn a new language, shift to a different area of the industry, or take a more junior role at a reduced salary, according to headhunters.

The job prospects are particularly tight for trading and banking positions tied to equities, as firms have begun reducing headcount against the backdrop of more uncertain financial markets and an investor pullback amid rising geopolitical tensions, including the US-China trade war.

Deutsche Bank said in July that it plans to slash 18,000 jobs worldwide and close its equity sales and trading business globally, while HSBC said Monday, August 5, that it would lay off less than 2 per cent of its workforce. Nomura cut jobs as part of an overhaul in April and Citigroup and UBS are also reportedly considering their own global cutbacks.

“The equities market has been very challenging this year. There have been cutbacks in trading staff, which means it is a saturated market for candidates out there,” said Ricky Mui, managing director of recruiting firm Robert Walters in Hong Kong. “Since there are fewer open vacancies, this means an overall more competitive market for jobseekers.”

The wave of job cuts globally comes after a decade of steady employment growth in the financial services industry in Hong Kong, also a decade since the global financial crisis, as firms have bet on future growth in Asia.

There were 236,116 people working in the finance and insurance sector, or about 7.7 per cent of the overall workforce in Hong Kong, as of the end of the first quarter, the most recent sector data available, according to the city’s Census and Statistics Department.

There were about 6,466 vacancies in the finance sector as of the end of March, up 6.2 per cent from the prior year period, according to the Census department.

Abimanu Jeyakumar, the head of financial services recruiter Selby Jennings in Hong Kong, said many financial firms in the city were increasingly looking for the “golden goose” – recruits who speak Cantonese and Mandarin, and were educated in the US or Europe. That makes it more difficult for expats who only speak one language.

Abimanu Jeyakumar, the head of financial services recruiter Selby Jennings in Hong Kong. Photo: SCMP

“An overarching theme for expats here in Hong Kong is the localisation and the regional focuses of a lot of businesses,” Jeyakumar said. “Typically, expats who have been here awhile would be in quite high positions within a bank. Over the past three or four years, there’s been a big emphasis on ‘juniorising’ the workforce. If a [managing director] is made redundant, there’s more likelihood of hiring a senior [vice-president] or director, as opposed to finding a like-for-like MD.”

There has also been an increase in hiring in mainland China as the financial markets open up there, versus positions that would have traditionally been in Hong Kong, Jeyakumar said.

In today’s environment, compensation is expected to remain flat as bank are increasingly scrutinising costs, which can hit the pocketbooks of expats looking for new jobs, Jeyakumar said.

Deutsche Bank overhaul could see more hiring in Asia, regional boss says

“Being an expat, there is a cost of living and living standards that come with being an expat here in Hong Kong, whether that is accommodation near the city centre, international schooling for your children, club memberships,” Jeyakumar said. “All the little things that come with the ‘expat bubble’ make it quite difficult – should you be made redundant – for you to take a hefty pay cut to move industries.”

The average package for a mid-level expat in Hong Kong last year was US$276,417, including salary and benefits, according to consulting firm ECA International.

Sid Sibal, director for financial services, legal, human resources and business support at search firm Hudson in Hong Kong, said expats tend to have “significant overheads” ranging from school fees to rent to ongoing costs in their home countries.

As a result, they may be forced to take the first role that comes along, at a reduced salary with less responsibilities, he said.

“To add to this, expat packages are becoming increasingly rare. There has been a steady and rapid decline in the last five years, and anyone in an expat package role is increasingly facing cost pressures to move onto a local package,” Sibal said. “Hence, professionals who were used to this benefit [due to either a relocation, or a short-term secondment] and have been laid off, are compelled to take a steep pay cut in order to move into another role.”

An economic slowdown in China and rising tensions with the United States over trade and technology have weighed on markets and cast a pall on business sentiment this year. But S&P Global Ratings said it expected the profitability prospects of the biggest banks in the Asia-Pacific region to “remain little changed” this year.

HSBC to cut 2 per cent of its workforce as bank looks to reduce costs

“The challenge for large, strong Asia-Pacific banks will be to maintain the stable momentum as the region will contend with the inevitability of a turn in the credit cycle after years of strong economic growth across much of the region,” S&P said in a recent research report.

Private banks and wealth managers are some of the highest in-demand jobs in Hong Kong, as banks and asset managers look to bolster their services for high-net-worth and ultra-high-net-worth clients in Hong Kong, mainland China and other parts of Asia, Sibal said.

Werner Steinmueller, Deutsche Bank’s Asia-Pacific chief executive, said in an interview last month the German lender could add jobs in the region as the closing of equity trading and sales opens up capital for investment in other businesses, including wealth management.

Better rental and school fee perks bump up pay deals for expats

HSBC chief financial officer Ewen Stevenson said on August 5 the bank, despite planned job cuts, would add headcount in areas where it sees “good growth and good returns”, noting that parts of Asia and Hong Kong fall into these categories.

Virtual banking and financial technology jobs also have been a “hot area of growth”, as the city’s first virtual banks prepare to begin operations in Hong Kong later this year, Mui, the Robert Walters managing director, said.

“Hiring starts from C-level to manager level in all areas of finance, legal, technology, risk and compliance, as well as operational and [human resources] roles,” Mui said. “This has been the backbone of financial services hiring over the last 12 months and we continue to see strong growth in this area.”

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