Regional Investment Banks Leading Way in Southeast Asia

While the majority of American and European investment banks are focused on cost reduction and cutting jobs, the largest Malaysian bank is facing growing pains. Malayan Banking Bhd., commonly known as Maybank, is enjoying some sustained success following an increase in merger activity as well as initial public offering transactions in the Southeast Asia region. In fact, the bank is actually feeling the pain of rapid growth, with employees currently working “flat out.” Maybank Chief Executive Tengku Zafrul Abdul Aziz told Bloomberg in an interview in Singapore that “to grow further, we need to recruit. For the number of deals we’re doing, the kind of expansion plans we have, we need to have people.”

These words are not heard often in investment banking circles these days, but the Southeast Asia region has certainly been a more favorable place to operate over the past few years than Europe or North America. The economy in the region has been supported by rising consumer incomes and demand, alongside increased access to credit, and this has pushed investment banking activities higher. Overall, the value of M&A activity in Southeast Asia has increased to $137 billion this year, just slightly below the record set in 2007. Further, Malaysia alone ended 2012 as the fifth largest market for IPOs, ahead of even the United Kingdom. Clearly, there is a significant opportunity available in Southeast Asia for banks that are able to seize it with local knowledge and expertise.

The Success of Maybank and Other Regional Players Has Not Gone Unnoticed

Both the level of investment banking activity and the success of regional players such as Maybank has not gone unnoticed by the major Wall Street players. Despite global cutbacks, Citigroup is actually positioning more staff in Southeast Asia, doubling the amount of investment bankers focused on the region over the last three years. HSBC followed suit, tripling its staff.

While Maybank and rival local banking giant CIMB Group Holdings are aggressively staking out the investment banking market, other regional players are less enthusiastic about taking on the risk of investment banking activities. DBS Group Holdings, which is the largest lender in Southeast Asia, is reluctant to get into the riskier aspects of investment banking and instead is focusing its efforts on fixed income activities. DBS CEO Piyush Gupta told Bloomberg that he prefers the lower risk fixed income activities as they “don’t need a lot of prima donna bankers to try and do that.”

What Does This Mean for Investment Banking Job Seekers?

Despite seeing operations scaled back in developed markets as well as a number of emerging markets, Southeast Asia currently does offer one of the few remaining positive opportunities for investment bankers around the world today. Combined with a relatively high standard of living in financial centers such as Kuala Lumpur and Singapore, economic growth is certainly driving the need for additional resources for many institutions. Local expertise and knowledge is a critical advantage for those seeking opportunities in the region, especially since overall competition will remain fierce with investment bankers from around the world seeking out relatively few openings. For those with professional background in Southeast Asia, or some of the key industries operating in the region, Malaysia, Singapore and other growing jurisdictions do offer some of the best investment banking job opportunities available today.

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