Mainland bankers flock to HK

New arrivals play role in IPOs as investment flows expand

A flood of bankers from the Chinese mainland banks is changing the social fabric of Hong Kong, as they rapidly expand their footprint in one of the world’s premier financial centers.

Twenty years after Hong Kong returned to Chinese rule, scores of mainland professionals are filling the elite financial ranks of Hong Kong, while job cuts at Western banks have led to an exodus of expatriates.

The largest increase in mainland staff over the past decade has come in investment banks, with 80 percent seeing an increase of at least 20 percent, said a 2015 Financial Services Development Council survey.

“It has a much better environment than Beijing where I used to work,” said Hong Hao, a managing director at BOCOM International, who has lived in Hong Kong for five years. “The food is good, and the tax rate is also good.”

Personal tax rates in Hong Kong are about 15 percent to 17 percent, while they can be as much as 45 percent in the mainland.

Chinese IPOs dominate the Hong Kong market, the world’s largest IPO market in 2016 when mainland offerings represented 80 percent of all new listings, according to Thomson Reuters data.

Hong Kong’s financial services industry accounts for 18 percent of the territory’s economy, compared with just 10.4 percent in 1997 when the city returned to Chinese rule.

Evan Zhang, 26, from South China’s Guangdong Province, is one of the new arrivals. For Zhang, one of the younger hires at CITIC Securities International, the increasing outward flow of Chinese capital in recent years is an opportunity.

“With Chinese mainland people more willing now to allocate assets overseas, and overseas investors willing to invest in China, I can play a gobetween role to help them,” he said.

As top banks such as Goldman Sachs, UBS and Bank of America trim their Asia head- count, businesses across Hong Kong have taken a direct hit.

Bo Innovation, a Michelinstar restaurant, said its Western customers fell roughly 10 percent in the past 10 years, according to owner and executive chef Alvin Leung. Mainland clients increased by about the same percentage, he added.

Western companies are also increasingly turning to more affordable locations such as Quarry Bay, at a time when Chinese companies are boosting their presence in the prime Central district, according to Tom Gaffney, a managing director at real estate services firm CBRE.