Source:
https://scmp.com/article/650617/period-cautious-optimism-asia

Period of cautious optimism in Asia

It's about a year since the start of the credit crunch, and the effects from the fallout vary in different regions. While some are entering recession, others are as yet unscathed and experts remain divided as to whether a full global recession is inevitable.

What is clear is that banking and finance sectors in the United States and Europe have been hard hit, but the Asian finance sector remains relatively unaffected.

Some Asian banks have been bailing out their western operations and rivals, and a pattern may be evolving of bankers relocating to Asia from the west.

'Head count reductions have been taking place mostly in London and New York - not here. At our recruitment events at those two cities this year, we detected more interest than usual from bankers wanting to relocate to Asia,' said Pan Zai Xian, manager, financial services (banking and finance) at Robert Walters Singapore.

He added, however, that the credit crunch was having a regional effect in terms of which skills were most in demand, with retail banking, hedge funds and insurance least affected by the crisis, and a steady demand in accounting, compliance and financial sales.

'At times like this there also tends to be a strong demand for audit professionals, and I think there will be an ongoing need for credit and market risk professionals,' Mr Pan said.

Some institutions are unlikely to be affected by any downturn because their product range is not exposed to the subprime crisis, and such companies may see the situation as favourable for recruitment.

'We are working closely with some of these companies,' Mr Pan said. 'For them it's a good time to 'cherry pick' bankers and finance professionals who, in better times, wouldn't have been looking to move jobs.'

While the credit crisis has yet to have a major impact in Asia - it is giving pause to professionals who would usually be attracted to the highest salary - other factors are becoming more important.

'In recent years, there has been a banking boom in Singapore [and Asia generally], with many banks coming into the region and, as a result, professionals were looking for the best premiums,' he said.

'But now the focus is more on job stability. People are playing safe and looking more at the long term [picture].'

Rival specialist recruitment agency Hays agrees that while Asia has avoided the worst of the credit crisis, the regional banking and finance sector is treading more cautiously.

'Compared to 2007, the aggressive expansion across all sectors of the investment community has changed to a wait-and-see situation. Some institutions are waiting for further signs of the global economy strengthening before embarking on their expansion plan,' said Chris Mead, general manager of Hays Singapore.

'On the whole, the investment community is still hiring. However, most of the hiring is for the replacement of departing staff. New entrants in the market are recruiting experienced professionals who have the industry knowledge to assist them in developing their presence and brand name, and mitigate their risks.'

He also perceives a desire in some finance quarters for a move eastwards in search of new opportunities and openings, though mainly in senior banking roles. 'A lot of experienced private bankers from Europe and the Middle East are looking to move to Singapore [and the region].

'At this stage senior private bankers with US$120 million plus books are the ones in demand,' he said.

The more cautious outlook had led to a shift in attitude from banks and employees alike, he said, with people more likely to look beyond their traditional areas of work. 'Some banks have scaled back their risk appetite, which has led to an increased number of seasoned industry professionals seeking new opportunities in different areas and taking on new challenges, such as a trade sales role,' he said.

'Experienced professionals are still able to command relatively good compensation. However, candidates need to manage their expectations when it comes to salary compared to previous years.'

He identifies wealth management, private banking and finance technology as key areas of demand in the market. Professionals with skills in finance technology and development are particularly sought.

'In Hong Kong, front office developers with VBA, C++, C Sharp and Java are required, while candidates with trading systems such as Sophis, Calypso, Murex and Summit are also in demand. Development project managers, business analysts and mid-level managers with five or more years' investment banking experience are also needed. There is a shortage of experienced candidates, but there's a reluctance to recruit candidates from abroad due to their higher salary expectations,' he said.

Banking giant HSBC was one of the first banks to flag the subprime problems that have caused the credit crisis, and its own US banking operation has been badly affected. Despite a 28 per cent drop in its overall profits in the first six months of this year, the bank remains cautiously optimistic, especially regarding its Asian operations.

'With the current economic environment, it is expected that labour demand growth will slow down in the second half of this year,' said Nigel Fretwell, head of human resources, HSBC Asia-Pacific. 'We will continue to be selective and prioritise the recruitment of key strategic roles or where there is a strategic investment.' The bank is continuing to extend its reach in Asia, and this will sustain staff requirements across the board.

'As we continue to invest in the region, opportunities for banking positions will continue to be in demand,' he said. 'Markets with strongest demand include China, India and Indonesia. Job roles in greatest demand are those in consumer credit and risk, collections, general banking staff with sales and service experience. In addition, we are also concentrating our efforts in areas such as insurance and Amanah [Islamic banking] in some countries.'

While a mood of conservatism may be creeping into the regional banking and finance theatre, China remains upbeat. The Olympics, and the mainland's ongoing economic expansion and openness are contributors to this more positive vibe.

'As the credit crisis starts its lag effects in Asia, we are still anticipating a strong growth here in China and the Beijing Olympics acts as a stimulus,' said Jason Tan, banking and commerce finance manager at Robert Walters China. 'The success of the Olympics is a showcase to the world that China is ever ready for more business with the world, offering world-class infrastructure and ever more transparency.

'The Chinese government has been prudent and proactive in encouraging foreign banks to invest in local banks. This is likely to increase the demand for skilled banking professionals with capital-market products and systems knowledge.'

He added that while finance-sector salaries could be expected to level out in the near term, salaries on the mainland were still increasing. 'In China, the banking sector salaries are on the rise and can be said to be relatively competitive compared to Hong Kong, largely due to the huge volume of business and the ever increasing shortage of key talent,' Mr Tan said.