ASIA FOCUS

China hungry for financial talent

STEVEN HE, BEIJING

April 2 was a landmark day for global banks in China, as more than 100 outlets of HSBC, Standard Chartered Bank and the Bank of East Asia started operations in the country, a move that will also increase pressure on all banks as they scramble to find talent.

The three banks are among the first batch of foreign banks wining approval from the Beijing government to become locally incorporated. They are eager to tap into the booming Chinese market that is estimated at around 30 trillion yuan in household savings, with surging demand for mortgages, credit cards and other services.

Thai banks that are present in China include Kasikornbank Plc and Bangkok Bank Plc, along with Business Development Bank (established in Shantou, Guangdong province in 1992) and owned by the Charoen Pokphand Group.

Under the approval granted by the government, these banks now can offer local currency deposit and loan services to individual Chinese customers, the same as China's local commercial banks. It is a major shift away from the past when foreign banks were restricted to offering foreign-currency services to individuals while capable of providing both local and foreign-currency services to enterprises.

Beijing has been moving swiftly. On March 20, the four banks received approval from the China Banking Regulatory Commission. Nine days later, they were handed their business licences by local governments in 20 provinces and cities.

"Today we opened a new chapter in the bank's 142-year history in China," said Vincent Cheng, the chairman of HSBC Bank (China) at a ceremony marking the local incorporation in Shanghai.

Eight other foreign banks are in the process of incorporating local entities: Hang Seng Bank, Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, DBS Bank, ABN Amro Holding NV, Wing Hang Bank, Oversea-Chinese Banking Corp, and JPMorgan Chase & Co. Three more banks have applied to do the same: Singapore-based United Overseas Bank Ltd, Citic Ka Wah Bank Ltd, and Bank of China (Hong Kong) Ltd's wholly owned unit Nanyang Commercial Bank Ltd.

However, with more foreign banks getting licences for local entities, a big problem has surfaced - a talent shortage. HSBC has said it would need to hire about 1,000 new employees a year for the next three years. Its total headcount in China is expected to reach 4,000 at the end of this year.

Citigroup has similar plans. President Charles Prince has set a year-end target of 30 branches, up from 16 currently. Standard Chartered aims to have 40 branches in the near future and Bank of East Asia plans to establish more than 100 outlets this year.

The rising clout of China is underscored in a recent survey by PricewaterhouseCoopers. It indicated that the 35 foreign banks currently operating in China have 6,654 employees, a figure set to grow by 154% by 2008.But a report by Deloitte Research pointed to the fact that the biggest barrier to growth of the foreign banks would be the talent shortage. This shortage is likely to offer opportunities for local professionals eager to make more money working for an international bank, due to their perception that they offer higher salaries.

"The salary a foreign bank promises can reach one million Chinese yuan (4.5 million baht per year), several times higher than before, if you are a middle or higher level of a Chinese bank, with enough working experience," said a headhunter who is helping foreign banks look for senior managers.

Wang, who declined to have her last name quoted and who works for a local bank, jumped to the China headquarters of Citic Ka Wah Bank in Shanghai two months ago. "Talents with both working experience and overseas experience are very hot," she said.

The talent competition has also expanded to universities. In each graduating season, leaders of foreign banks can often be seen on campuses, preaching to future bank managers the virtues of their cultures and strategies.

"I prefer foreign banks, because they have sound training systems," said a student majoring in international finance at Fudan University.

With the high demand also comes a high attrition rate, and this has pushed up salaries in China, which has been trying to cap the income gap.

Bangkok Post

Last Updated : Saturday April 21, 2007