Local bankers losing out to mainlanders

Hong Kong's homegrown investment bankers are losing their status with their share of jobs in the industry dropping to about 30 percent from 40 percent two years ago, supplanted by their mainland Chinese rivals who now hold 60 percent of roles, according to recruiting company Robert Walters.

The other 10 percent of positions are held by overseas nationals, it says.

The trend has been similar in the industry's upper echelons, where mainlanders account for more than half of senior roles, estimates from executive search firm Wellesley showed.

John Mullally, regional director at Robert Walters in Hong Kong, said mainlanders comprised just 15 percent of the industry 20 years ago, before widespread access to study abroad programs and other international experience helped China narrow its skills gap with Hong Kong.

As the supply of bankers from the mainland has increased, pay packages across the city have dwindled.

Compensation for senior roles has dropped 15 percent to 20 percent over the past five years, said Christian Brun, chief executive officer at Wellesley.

Senior managing directors typically take home anywhere from US$850,000 (HK$6.63 million) to US$1.75 million compared to US$1 million to US$2 million in 2015, according to a person familiar with the matter.

And it's not just Chinese firms in Hong Kong that are hiring and elevating employees from the mainland. Morgan Stanley has promoted about 15 managing directors from mainland China since 2016, compared with 11 Hongkongers, Bloomberg analysis showed.

Brun said that more than 90 percent of the searches that Wellesley conduct in Hong Kong require Mandarin fluency at least and a strong preference for mainland candidates. That has also left fewer opportunities for expatriates from places like Britain and America, who accounted for just 7 percent of senior hires in Asia at the region's eight biggest bulge-bracket investment banks, he added.

However, Hongkongers still hold some of the industry's most prominent roles. Mark Leung is the China chief executive at JPMorgan Chase & Co. and Pierre Chu is co-head of China mergers and acquisitions at Goldman Sachs. Several heads of China investment banking, including UBS' John Lee and Credit Suisse's Joe Lai, are also from Hong Kong.