Citic looks to exapand investment banking operations in Asia
(30 September 2016 – Hong Kong) Hong Kong-based China Citic Bank International is preparing to launch an aggressive expansion of its investment banking operations at a time when global investment banks are pulling back from the region.
The bank plans to build up a merger and acquisition advisory team and an equity capital markets business in Hong Kong, people close to the matter said, following its work on ChemChina’s US$44 billion acquisition of Swiss agribusiness Syngenta in which the Chinese bank was the lead arranger on a US$12.7 billion syndicated loan.
The move from Citic International comes during a slowdown in global markets that has pushed US and European investment banks to cut back on dealmaking positions in Asia.
Goldman Sachs is in the process of axing up to 30 percent of its investment bankers in Asia as pressure from shareholders increases for it to improve returns. In the coming months, Goldman could lay off as many as 90 investment bankers across the region, primarily in Hong Kong and Singapore, people familiar with the bank’s plans have said.
Senior staff at Citic International were notified in a meeting this week of the plan to transition away from commercial banking and towards becoming a full-service investment bank.
The changes include gaining several new financial licences in Hong Kong such as those for dealing in securities, publishing research on securities, corporate finance advising and asset management.
The strategy for the bank, which is an offshore subsidiary of Beijing-based Citic Bank, will seek to “reduce its reliance on net interest income from its commercial banking businesses while boosting its fee income from investment banking”, a person close to the matter said. Citic also runs one of China’s largest securities brokers, Citic Securities.
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