The Strategist

Western banking giants cut investment banking staff in China by 13% in 2023

07/03/2024 - 05:38

According to the Financial Times' calculations based on recently disclosed annual reports, the "Big seven" Western financial firms cut the number of employees in their investment banking divisions in China last year by 13%, or 1.781 thousand individuals, which is the largest reduction in many years.

Bohao Zhao
Bohao Zhao
These include JPMorgan Chase & Co., UBS, HSBC, Credit Suisse, Deutsche Bank, Morgan Stanley, and Goldman Sachs Group. The majority of them had lower profitability or even a loss in their Chinese investment banking divisions last year.

The Financial Times notes that the PRC's capital markets are cooling as a result of the country's economy contracting, the real estate market continuing to decline, and growing geopolitical tensions between China and the United States.

Han Lin, China director of consulting firm The Asia Group told the newspaper that "Western investment banks are caught in a vicious circle. Less investment in mainland businesses results from weak deal flow, which in turn limits additional deal flow."

He added that several financial institutions are "losing patience given that opportunities in India, Southeast Asia and the US look more promising."


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