BANKING SECTOR      SALARY

Asia - Investment banks are putting a stop to steep pay packages offered in recent years as Asian capital markets face a downward pressure. 

With the Chinese and Southeast Asian investment banking revenue sliding from US$7.3 billion (SG$9.2b) to US$5.9 billion (SG$7.4b) in 2011, banks invested in Asia have began laying off employees to reduce headcount.

"One of the things Asia has suffered from is the continued thought that it's the market of the future," Rob Sivitilli, J.P. Morgan Chase & Co.'s Singapore-based head of corporate finance and mergers and acquisitions (M&A) for Southeast Asia, said. 

But while this has driven global banks to aggressively recruit and pay up for bankers, he added that banks are becoming "more disciplined" about hiring as Asian capital markets slow and the Asian M&A market remains in its early stages.

"We are not seeing banks offer large multiyear deals as they did before the financial crisis. In fact, most guarantees were for one year, although a bank breaking into Asia in need of 'game changers' might have offered 'rare and reserved' two-year guarantees," Paul Aldrich, managing partner at recruiter CTPartners in Hong Kong, said. The most attractive packages were offered to highly sought-after bankers with a combination of local contacts and global capital markets expertise.

Nevertheless, the region's local banks have also proved to be fertile recruiting grounds for some smaller European and American firms looking to bulk up. "Firms tend to look for someone who has done their undergraduate degree in the local market and their M.B.A. in the U.S. or Europe and worked for an international bank in the region," Aldrich said, adding people who worked for local companies in corporate development are also desirable.

However, importing bankers from New York or Europe for Asian banking positions come with added costs such as schooling, housing and travel expenses to cover regular visits home, he noted.

Western bankers seeking positions in Asian markets "have to have some kind of technical expertise that is missing or a wealth of deal expertise that offsets their lack of a local network," he said. If a banker is being hired for major cross-border deals, a local network is not as crucial, he said.
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