Bi Mingjian, a veteran executive at mainland investment bank China International Capital Corp (CICC), is seen by analysts as a safe pair of hands to help it realise the initial public offering that is key to its growth in the face of keener competition. Monday’s appointment of Bi, a member of CICC’s founding management team, as the firm’s chairman and chief executive followed the departure of several top executives in the past year, including long-serving former chief executive Levin Zhu Yunlai, former chairman Jin Liqun, former co-head of investment banking Jiang Guorong and former co-head of international investment banking Marshall Nicholson. CICC has fallen behind and has become more low-key in recent years Kenny Tang, AMTD Asset Management “CICC has fallen behind and has become more low-key in recent years, as rivals like Citic Securities and Bank of China International gained ground,” said AMTD Asset Management general manager Kenny Tang Sing-hing. “Having a new chief executive who had worked there for a long period before, gives market participants some room to think that it will be in safe hands and may have a new direction or strategy.” Bi was a lead banker for the US$4.2 billion IPO of China Telecom in 1997, helping CICC build a reputation in overseas capital markets, according to two bankers. “Subsequently Bi was a part of CICC’s senior management team, helping to chart the growth and strategy of CICC,” one of them said. After topping the rankings in Hong Kong’s equity capital market in 2009 thanks to its dominance in large IPOs by major state-owned enterprises (SOEs), CICC struggled to get block trades and follow-on share-sale mandates, partly because of its relatively narrow client base. Many of the mainland’s largest SOEs have since gone public, making large IPO were harder to come by, while competition heated up following the IPOs of rivals Citic Securities in 2011 and Haitong Securities in 2012. According to data collated by deals information provider Dealogic, CICC’s ranking in the investment banking market, measured by combined Hong Kong and mainland revenue, slipped from second in 2009 to fifth in 2010, seventh in 2011, ninth in 2012, 12th in 2013 and 14th last year, as its market share fell from 7.6 per cent to 2.5 per cent. It has climbed back to sixth position so far this year, with a 3.1 per cent share. “Now is the right time for CICC to compete head-on and fight back against other major domestic and overseas rivals,” a Beijing-based banker said, adding that Bi had ample experience in both investment and commercial banking, as well as the private equity industry. “Bi is one of the most exceptional leaders in China’s financial markets,” he said. “Although he will be facing lots of internal and external problems, I believe he can quickly build confidence in his leadership given his solid understanding of CICC’s mission and culture.” The banker said the company was undergoing internal restructuring, but declined to give details. Tang said part of BOCI’s rise in recent years had to do with the fast growth in its private banking business, which helped it obtain share-sale mandates. Private banking involves offering investment products to wealthy individuals, and the offering of loans to support their investment activities. If CICC, the mainland’s first Sino-foreign investment bank, succeeded in launching an IPO, it would help it finance the development of a private banking business, he said. CICC was set up in July 1995 to help mainland and Sino-foreign firms raise funds in international capital markets. It advises mainland clients on asset restructuring, project financing and IPOs, and helps foreign investors make direct investments on the mainland. It was initially 42.5 per cent held by state-owned China Construction Bank and 35 per cent by American investment bank Morgan Stanley, which sold its stake in 2010 to US-based private equity firms TPG Capital and KKR, the Government of Singapore Investment Corporation and Malaysia’s Great Eastern Life Assurance. Bi previously held the positions of deputy chief executive, member and acting chairman of the management committee, co-head of investment banking, co-chief operating officer and senior adviser at CICC. He stepped down as CICC’s investment banking head and left the bank in 2005, and later joined private equity firm Hopu as a partner. Besides Hopu, he has also worked for the World Bank and China Construction Bank.
