Hong Kong Investment Banking Salaries Outpace London

The average base pay for investment banking jobs in Hong Kong has shot up by 15 percent in the past year, and has outpaced salary hikes in London’s financial center.

Analysts in Hong Kong have seen pay increases in the range of 20 percent, while managing director-level staff have seen 25 percent average raises, according to a story from Britain’s Telegraph. Average base pay for investment bankers now hovers around HK$890,000 (US$ 114,428). Whereas similar staff in London saw pay increases in the neighborhood of 12 percent. All this is pretty remarkable given the uncertainty in markets, belt-tightening among banks, and the ongoing hangover from the European debt crisis.

“Investment banking teams operating in Hong Kong have performed more strongly than their counterparts in London and New York in 2011. Generally banks are keener to invest in their teams in Asia than in Europe and the US and that has meant a bigger boost for Hong Kong bankers’ base pay,” said Mark O’Reilly, managing director of the recruitment firm Astbury Marsden which conducted the research.

But insiders expect things to cool down next year as the Eurozone crisis puts more of a damper on growth, and conditions force larger global banks to be more cautious about hiring and salaries, including their Asian offices.

In fact, O’Reilly commented that many of these pay raises were agreed upon early in 2011, when confidence in the banking sector was stronger and banks were eager to retain key staff in order to be well-positioned for a possible recovery. Now, with less of a recovery in sight, pay raises are fewer and more modest.

Some banks, such as HSBC, are even paring back their Asian units. Research from another recruitment firm, Morgan McKinley, shows that 35 per cent of financial services firms plan to reduce their headcount within the next six to 12 months.

One bright spot on the horizon is staffing for compliance. As Hong Kong has expanded its range of financial products, it has triggered a greater demand for compliance professionals. Staff working on compliance teams reported an average 21 percent increase in salaries over the past year, nearly double that reported in London.

Does the growth in Asian investment banking jobs present an opportunity for you? Is it something you’d pursue? Add your comments below.

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