IFR Asia - October 14, 2017

Global banks

staff up for Belt

and Road

International banks including CITIGROUP, HSBC

and STANDARD CHARTEREDûAREûSTAFlNGûUPûASû

they look to grab business linked to the Belt

and Road initiative.

#ITIGROUPûBECAMEûTHEûLATESTûTOûANNOUNCEû

it was boosting headcount when it said

LASTûMONTHûITûWASûLOOKINGûTOûADDûATûLEASTû

25 bankers in countries linked to China’s

MAJORûINFRASTRUCTUREûPLAN

'ERRYû+EEFEûHEADûOFûCORPORATEûBANKINGû

FORû!SIAû0ACIlCûTOLDû)&2ûTHEû53ûBANKûWASû

LIKELYûTOûAPPOINTûMOREûCOVERAGEûBANKERSû

THROUGHûAûMIXTUREûOFûEXTERNALûHIRESûANDû

relocations.

h-OSTûOFûTHEûPLACESûWHEREû#HINESEû

OUTBOUNDûmOWSûWILLûBEûGOINGûTOûWEûALREADYû

HAVEûSOMEûCOMBINATIONûOFûCORPORATEûANDû

INVESTMENTûBANKERSûONûTHEûGROUNDvûHEû

said.

h7HATûYOUûDOûNEEDûAREûMOREûPEOPLEûTOû

MANAGEûCLIENTSûDAYûTOûDAYûMANAGEûTHEû

mOWSûANDûGENERALLYûDOûTHEûCOVERAGEûJOBû

and that’s where we’ll be looking to add

HEADCOUNTv

)NTERNATIONALûBANKSûAREûSTEPPINGûUPû"ELTû

and Road-related hiring, betting that their

REGIONALûPRESENCEûANDûEXPERTISEûACROSSû

DIFFERENTûPRODUCTûLINESûWILLûEARNûTHEMûAû

share of the business.

(3"#ûISûBOOSTINGûITSûHEADCOUNTûFORû

RENMINBIûOFFERINGSûFROMûCAPITALûMARKETSû

SOLUTIONSûTOûHEDGINGûWHILEû3TANDARDû

#HARTEREDûHASûSETûUPûAûTEAMûOFûBANKERSû

along key Belt and Road corridors to look

AFTERûCLIENTSûANDûISûADDINGûTOûITSûNUMBERS

!CCORDINGûTOûHEADHUNTERSûMOSTûOFûTHEû

MAJORûCOMMERCIALûBANKSûAREûHIRINGûANDûAREû

LOOKINGûFORûCOVERAGEûBANKERSûINûPARTICULAR

h!ûLOTûOFûTHEûOPENINGSûAREûCOVERAGEû

ROLESûASûTHEûBANKSûWANTûTOûBRINGûPEOPLEûINû

WITHûRELATIONSHIPSûANDûWHOûWILLûBEûABLEû

TOûSELLûTHEûWHOLEûSUITEûOFûPRODUCTSvûSAIDû

John Mullally, director for Hong Kong

ANDû3HENZHENûlNANCIALûSERVICESûATû2OBERTû

Walters.

CHINESE HEAVY LIFTING

4HEû"ELTûANDû2OADûSCHEMEûOUTLINEDûBYû

#HINASû0RESIDENTû8Iû*INPINGûINûûAIMSû

TOûREINVIGORATEûTHEûANCIENTû3ILKû2OADû

TRADINGûROUTEûANDûTOûDEVELOPûAûMARITIMEû

equivalent.

Chinese banks have been aggressively

SUPPORTINGûTHEûSCHEME

)NDUSTRIALûANDû#OMMERCIALû"ANKûOFû

China, the world’s largest bank in asset

TERMSûLENTû53BNûLASTûYEARûTOû"ELTûANDû

2OADûCOUNTRIESûEXCLUDINGû#HINAûUPûûONû

THEûPRIORûYEAR

#HINAûHASûALSOûSETûUPûSEVERALû

DEVELOPMENTûINSTITUTIONSûINCLUDINGûTHEû

53BNû3ILKû2OADû&UNDûANDûTHEû53BNû

!SIANû)NFRASTRUCTUREû)NVESTMENTû"ANKû

PUTTINGûAûQUESTIONûMARKûOVERûTHEûSCOPEûLEFTû

for international banks to get involved.

4HEûMAJORITYûOFû"ELTûANDû2OAD

RELATEDû

activity involves lending to infrastructure

PROJECTSûTYPICALLYûATûLOWûMARGINSûANDûINû

SUB

INVESTMENT

GRADEûCOUNTRIESûWHICHûHASû

cast further doubt on the role of global

lenders.

#ITIGROUPSû+EEFEûPOINTEDûTOûTHEûRANGEûOFû

services the bank was able to offer and its

EXPERTISEûONûTHEûGROUNDûINûAûNUMBERûOFûTHEû

countries located along the Belt and Road.

“It’s true that the Chinese banks have

been doing a lot of the heavy lifting, but

THEYûDONTûHAVEûTHEûCAPABILITYûTOûDOûMULTI

CURRENCYûPOOLINGûFORûEXAMPLEûATûLEASTûNOTû

YETv

0EOPLE

&Markets

Bankers unfazed by latest SFC salvo

HK regulator probes 15 firms for IPO sponsorship roles

Hong Kong’s securities regulator has sent

AûWARNINGûTOûINVESTMENTûBANKSûTHATûITûISû

INVESTIGATINGûûlRMSûTHATûSPONSOREDû)0/Sû

FORûhSUBSTANDARDûWORKvûINCLUDINGûSOMEû

hRECKLESSvûBEHAVIOUR

(OWEVERûEQUITYûCAPITALûMARKETSûBANKERSû

)&2ûSPOKEûWITHûMOSTLYûSHRUGGEDûOFFûTHEû

3ECURITIESûANDû&UTURESû#OMMISSIONSûLATESTû

PRONOUNCEMENTûSAYINGûITûWASûINûLINEûWITHû

EARLIERûSTATEMENTS

h)ûDONTûREALLYûTHINKûûINVESTMENTûBANKSû

AREûINûTROUBLEvûSAIDûONEû%#-ûBANKERûATû

AûMAJORû!SIANûBANKûh'OODûFORûSELLINGû

HEADLINESûxûBUTûTHEûPRACTICALûMATTERûISûTHEû

3&#ûMAYûLOOKûATûSEVERALûTRANSACTIONSv

/NEû%#-ûBANKERûATûAûMAJORû%UROPEANû

BANKûFELTûTHEûSAMEûWAY

h)ûDONTûTHINKûTHEREûHASûBEENûMUCHûOFûAû

MARKETûREACTIONûTOûTHISû4HEû3&#ûHASûSAIDûITû

WILLûBEûTOUGHERûONûSPONSORSûSINCEûû3Oû

ITSûNOTHINGûNEWvûHEûSAID

4HEû3&#ûPUBLISHEDûITSûUPDATEDû#ODEûOFû

#ONDUCTûINû$ECEMBERûûCLARIFYINGûTHEû

RESPONSIBILITIESûOFûSPONSORSûANDûHOLDINGû

MANAGEMENTûACCOUNTABLEûFORûANYûLAPSES

3PEAKINGûATûTHEû4HOMSONû2EUTERSû0AN

!SIANû2EGULATORYû3UMMITûLASTû7EDNESDAYû

INû(ONGû+ONGû4HOMASû!TKINSONûEXECUTIVEû

DIRECTORûOFûENFORCEMENTûATûTHEû3&#ûSAIDû

THEûREGULATORûWASûINVESTIGATINGûûhACTIVEû

FRAUDûCASESvûOFûWHICHûûWEREûhPARTICULARLYû

SERIOUSv

&AILINGSûBYûTHEûûUNNAMEDûSPONSORSû

HADûCAUSEDûBILLIONSûOFûDOLLARSûINûINVESTMENTû

LOSSESûHEûPOINTEDûOUT

!MONGûTHEûSHORTCOMINGSûWEREûCHECKINGû

BASICûISSUESûSUCHûASûVERIFYINGûCUSTOMERSû

or revenue data for listing candidates,

!TKINSONûSAIDûADDINGûTHATûSOMEûOFûTHEû

BEHAVIOURûCOULDûBEûCONSIDEREDûhRECKLESSv

h1UITEûAûNUMBERûOFûTHESEûSERIOUSûCASESû

INVOLVEûGROSSûOVERSTATEMENTûOFûREVENUEû

ANDûCIRCULARûlNANCINGûMANYûFACILITATEDû

BYûRELATEDûPARTIESûANDûFALSEûCUSTOMERSvû

Atkinson said.

h/FûCOURSEûONEûOFûTHEûRISK

MANAGEMENTû

TOOLSûTHATSûESSENTIALûFORûPREVENTINGûTHISû

KINDûOFûFRAUDûISûOURû)0/ûSPONSORSHIPû

REGIMEv

!CCORDINGûTOûTHEû3&#SûWEBSITEûTHEREûAREû

CURRENTLYûûREGISTEREDûSPONSORSûINû(ONGû

+ONGûRANGINGûFROMûINTERNATIONALûBULGE

bracket banks to local brokerages.

!TKINSONSûCOMMENTSûCOMEûASûTHEû

SECURITIESûREGULATORûSTEPSûUPûENFORCEMENTû

in the city, holding banks to account.

)Nû*ANUARYûTHEû3&#ûlLEDûAûSUITûAGAINSTû

3TANDARDû#HARTEREDû5"3ûANDûFOURûOTHERû

PARTIESûOVERûTHEûû)0/ûOFûTIMBERû

TOP STORY REGULATION

“Banks are certainly taking their

responsibilities as sponsors

more seriously and thinking

twice about the companies they

take on, but I don’t think this

will put an end to sponsorship.”