Jobs of private bankers in Hong Kong are at risk
As markets continue to sour, highlighted by China's slowdown, more private bankers could find themselves out of favour
Global banks that hoped to turn Hong Kong into a platform to serve wealthy mainland Chinese clients are finding it tough going as markets have soured, and some have even begun to lay off staff to reduce costs.
Last week, Wall Street bank Goldman Sachs quietly laid off five Hong Kong-based employees, including a vice-president-level employee and four less senior people in its private-wealth management division, according to people familiar with the matter.
Also recently, historic Swiss private bank Julius Baer cut several private banking staff in Hong Kong. In total, about a dozen people either voluntarily left or were forced to leave the bank.
Earlier this year, Julius Baer said it would buy Bank of America Merrill Lynch's wealth management unit outside the US as part of a global expansion strategy, and expects to slash 1,000 jobs from the combined entity.
"We constantly [do] performance management [of] our people, but we are not downsizing," said a spokeswoman for Julius Baer in Hong Kong. Goldman Sachs declined to comment.
For private banks to maintain a profitable business, each relationship manager needs to attract and maintain at least US$150 million in assets to manage, according to Kenny Lam, a McKinsey partner who specialises in private banking.
Bankers who fail to bring in enough assets to manage often face the risk of being laid off after performance reviews that are usually conducted on a semi-annual or annual basis.