Credit Suisse, UBS seen moving execs from HK to China

HONG KONG • Credit Suisse Group and UBS Group are relocating a number of bank executives to mainland China from Hong Kong to better compete for deals after the world's fastest-growing major economy relaxed curbs on foreign financial firms.

Credit Suisse recently moved three directors, as well as four more junior executives, to the mainland, according to sources familiar with the matter who asked not to be named.

UBS is in the process of shifting several managing directors, though no final decision has been made, sources familiar with the deliberations said.

Competition is hotting up in China after the nation last year allowed foreign firms to fully own their onshore securities businesses.

Credit Suisse and UBS, as well as United States rivals such as Goldman Sachs Group, are boosting their presence in the country, in some cases seeking to double staff, to chase after profits that are estimated to reach US$47 billion (S$62 billion) in investment banking alone by 2026.

Media representatives at the Swiss firms said they could not comment.

Having bankers in Hong Kong, long a bridge between the West and China, is becoming less crucial as the mainland market opens.

The moves are in part prompted by concerns over continued restrictions on travel to and from Hong Kong, which is making it hard to do deals on the mainland. The city has struggled to stamp out a fourth Covid-19 wave, while in mainland China, it is largely business as usual.

UBS and Credit Suisse both have aggressive plans to expand on the mainland.

UBS in late 2018 became the first global investment bank to gain control of a local securities joint venture.

Credit Suisse Asia-Pacific chief executive Helman Sitohang said in an interview last week that the bank is seeking to gain full control over its securities venture as soon as possible.

The bank plans to double its headcount in China and has been working to upgrade its infrastructure.

Credit Suisse and UBS both ranked outside the top 10 last year in arranging Chinese share sales on the mainland and in Hong Kong, trailing China's biggest firms as well as Morgan Stanley and Goldman Sachs, data compiled by Bloomberg shows.

Hong Kong has lost some of its appeal after China imposed a strict security law on the city last year to stamp out anti-government protests.

Other banks such as Morgan Stanley have also been moving people out of Hong Kong to bases on the mainland.

But banks have had some difficulties in persuading Hong Kong-based senior executives to move due to higher taxes, lifestyle differences and family reasons.

China recently signalled it would start taxing its citizens living abroad, though questions remain about how broadly the authorities will apply the new rules in Hong Kong.

China's tax rate is as high as 45 per cent, while Hong Kong's is about 15 per cent.

BLOOMBERG