Hong Kong Bankers Face Job Insecurity as Private Credit Firms Cut Out Intermediaries

Hong Kong's finance industry is confronting job insecurity as private credit firms increasingly bypass intermediaries, according to an opinion piece by Shuli Ren on Bloomberg. The number of people employed in the sector has fallen about 10% from its 2021 high to 197,800, with banks starting to make job cuts.

The industry still feels bloated compared to the decline in equity and bond offerings, partly due to China's economic slowdown. There are also concerns that well-paid bankers may have lost their motivation to do deals, instead focusing on servicing the legitimate corporate needs of Hong Kong businesses.

Several major banks, including Morgan Stanley, Goldman Sachs, and JPMorgan, have made rounds of job cuts in Hong Kong and China amid the market slump. The article also covers other relevant developments, such as Li Auto reducing prices of its vehicles, BNP Paribas re-entering the Chinese market, and the ISSB's plans to add biodiversity-related disclosures to its work plan.

Why this matters: The challenges faced by Hong Kong's banking sector reflect the broader economic landscape in the region, with China's slowdown and geopolitical tensions impacting financial markets. The job insecurity among bankers highlights the need for the industry to adapt to changing market conditions and client needs.

A Hong Kong-based banker at a reputable balance-sheet bank, holding the title of AN2, shared their experience: "I was recently told by my seniors to 'watch my step', which I interpret as a sign that I may be at risk of getting laid off as my division is currently cutting people." The banker has applied to hundreds of jobs in the past 12 months across various finance roles but has been ignored by megafunds and told by corporate firms that their salary requirement is too high.

The article suggests that the banking industry in Hong Kong is "absurd" and that the banker should consider leaving Asia, as "no one on the west wants to do business in Hong Kong anymore." The challenges faced by the industry are further highlighted by the 13% drop in first-quarter profit reported by Hong Kong Exchanges and Clearing Ltd (HKEX), as sluggish trading and muted listing activities weigh on its businesses.

Key Takeaways

• Hong Kong finance industry faces job cuts, 10% decline from 2021 peak.
• Banks like Morgan Stanley, Goldman Sachs, JPMorgan make job cuts in HK and China.
• Bankers face job insecurity, struggle to find new roles due to high salary demands.
• HKEX reports 13% drop in Q1 profit due to sluggish trading and muted listings.
• Industry challenges reflect China's economic slowdown and geopolitical tensions.