The new no-business, no-bonus reality
Mainland securities firms, many of which expanded rapidly in the past few years, are being forced to follow their foreign competitors by tightening up on hiring and bonuses after a disappointing year.
Several first-tier major mainland securities houses, including China International Capital Corp (CICC), Shenyin Wanguo Securities and China Merchants Securities (CMS) issued bonus letters to their employees in Hong Kong and mainland China over the Lunar New Year holiday.
Many of the recipients were disappointed that the bonus was equal to just one or two months' salary.
That level was on par with the bonus payments some Wall Street banks, including JP Morgan and Bank of America Merrill Lynch, offered to most of their Hong Kong-based mid-level or junior employees this year, industry sources said.
Staff at CMS' Hong Kong office were even worse off.
After a year of aggressive hiring and expansion, including luring senior bankers from BOC International, the investment banking arm of Bank of China, most CMS employees did not receive a year-end bonus due mainly to weak business performance in 2012.
CMS is not alone. Many staff at the wealth management unit of CICC also complained of a "zero bonus" for 2012.
One employee said managers told staff they were to "overcome the difficult times together with the company".
Meanwhile, many mainland securities firms have become more cautious about hiring after years of rapidly expanding headcounts.
Homegrown mainland investment banks, including Citic Securities and CICC, both headquartered in Beijing, were once regarded as "rescue" options for banking professionals laid off by big Western banks in the aftermath of the 2008 global financial crisis and the euro-zone debt crisis.
"Now apparently even the rescuers are getting nervous and cautious about themselves," one banker with a major mainland firm said, declining to be named because he was not authorised to speak to the media.
Part of the reason why many mainland banks are following their foreign rivals in cutting bonuses is that the institutions failed to bring in enough new deals to maintain business growth despite enticing many so-called star bankers from their competitors.
"Now it is time for you to face reality. No business. No bonus. It's that simple," he added.
Trading volumes on both Hong Kong and mainland stock markets also remained weak last year and dozens of initial public offerings of stock were put on hold due to a lack of investor interest.
In terms of year-end bonuses, outperformers in Hong Kong's financial community this year included Singapore's DBS and Goldman Sachs.
The two firms were said to have given out an average of six months' salary to most of their junior and mid-ranking staff. Bonuses for senior bankers there were believed to be even fatter.