Jan 31, 2022

BofA Adds to Hong Kong Hires Amid Questions On City’s Appeal

Cathy Chan, Bloomberg News

The Cheung Kong Center II commercial building under construction, developed by CK Asset Holdings Ltd., left, the Bank of America Tower, second left, and the Henderson commercial building under construction, developed by Henderson Land Development Co., right, in the Central district of Hong Kong, China, on Monday, Jan. 24, 2022. Vacant office stock in Hong Kong climbed to a record high in December to 9.1 million square feet (845,000 square meters) -- equivalent to nearly 158 football fields, according to real-estate services provider CBRE Group Inc. , Bloomberg

(Bloomberg) -- Bank of America Corp. named Robert Chiu as Asia vice chairman of its investment banking business, adding to a string of recent hires in the city amid questions over its appeal as financial hub.

Chiu rejoins the bank after 10 years and will relocate from Shanghai, the U.S. lender said in a memo that was confirmed by a spokesman. The bank has boosted its client-facing roles in Hong Kong by about 10% in the past 12 months, according to a person with knowledge of the matter. The front-office headcount in investment banking increased more than 20% in the period, the person said, asking not to be identified because the information is confidential. The bank has more than 1,800 staff in Hong Kong.

In a separate memo to its employees in Hong Kong, the bank’s top executives in the region underscored their commitment to the Asian financial hub. The memo came after the Financial Times last week reported that the lender was looking at moving staff from Hong Kong to Singapore as the Chinese territory’s strict zero Covid approach forces businesses to review their operations.

“Our profitability is up and our team continues to grow,” Jiro Seguchi and Jin Su, co-presidents of the Asia Pacific region, and Richard Yacenda, Hong Kong chief executive, said in the memo.

Hong Kong is the bank’s most profitable market in Asia Pacific, booking more than a quarter of its pretax earnings in 2021. The net headcount addition included more than 20 directors and managing directors across its global markets, corporate and investment-banking platforms since the third quarter, mostly with regional responsibilities, the person said.

Investment banking contributes about 15% to Bank of America’s overall business in Asia, doubling from three years ago. Revenue from the division has grown to about $700 million, and its headcount in the region reached about 300 after it recruited more than 70 bankers, including recent graduates, people familiar said in August.

It’s unclear how BofA’s net headcount in non-client-facing roles in Hong Kong has changed over the past year. A BofA spokesperson declined to comment on the firm’s Hong Kong headcount. The bank has previously declined to comment on the FT report.

Chiu was former head of Asia Pacific technology, media and telecom investment-banking at BofA Merrill Lynch and was most recently chief executive officer of Zenmen Group. Prior to that, he was group president of Shanda Group and chairman and CEO of Cloudary Corp., formerly Shanda Literature. He will be responsible for advising on our business strategy across the platform, helping deepen relationships with key clients particularly in the fast-growing new economy sector, the memo said.

Hong Kong’s zero Covid strategy is making it hard for bankers to travel in and out of the city. Officials this month clamped down further as the omicron variant emerged in the city, forcing close contacts into government camps, closing schools and banning flights, on top of mandated quarantine for incoming travelers.

Business groups have been sounding a warning that the city’s status as a financial center is increasingly at risk. Global banks face a talent crunch in Hong Kong as they struggle to retain staff and recruit candidates from overseas.

Bank of America, the last major Wall Street bank planning its own securities business in China, has been using Hong Kong as a launchpad into the mainland for decades to drive growth in equities, fixed-income and advisory businesses. The bank’s China strategy has to date not included an onshore securities license and much of its China-related business is done from Hong Kong via the China stock connect and qualified foreign investment quotas.

But any signs of scaling back in the Chinese territory is a sensitive topic for global banks, which all depend on smooth relations with Beijing as they seek to build up major franchises in mainland China.

Global lenders including UBS Group AG and Credit Suisse Group AG last year relocated more bankers from Hong Kong to China to expand dealmaking, partly spurred on further by tight quarantine restrictions. JPMorgan Chase & Co. has also weighed moving bankers to growing offices in Shanghai and Beijing, people have familiar said.

(Adds global banks moving more HK bankers to China in last paragraph.)