Morning Coffee: Why Asian bankers are now being forced to co-operate with each other

Are you a private banker or investment banker in Asia? Your ability to work well with your colleagues in the other division has never been more crucial to your career success.

Led by UBS, Credit Suisse and Citi, large Western banks in Asia have been trying to integrate their investment banking and private banking businesses – or at least make them work better together – for a number of years in order to jointly service the needs of the region’s wealthy business owners.

Now there’s a new sense of urgency about the integration process, thanks to soaring stock markets in China, reports the Financial Times. Goldman Sachs and Morgan Stanley – as well as UBS, Credit Suisse and Citi – are increasingly involved in what the FT calls “tycoon financing” – making loans to mainland multimillionaire and billionaire entrepreneurs using their shares as collateral. “These companies are their babies but there’s a real need for these entrepreneurs to raise liquidity – and that’s what causes all these other banks to want to get into the business,” an anonymous source told the newspaper.

Tycoon financing works best when it brings together private bankers and investment bankers. “In theory, investment bankers unselfishly introduce newly-minted millionaires, post-float, to their private banking colleagues. They in their turn, bring in the investment banking team to advise on a tycoon’s dealmaking,” reports the FT.

Meanwhile:

US bank-hiring probe seeks information about Wang Qishan, the powerful official leading China’s anti-corruption campaign. (Wall Street Journal)

The yuan has become Asia’s most active currency for payments to China and Hong Kong. (Bloomberg)

Let us enjoy exclusive fund-link status, Hong Kong asks Beijing. (South China Morning Post)

Deutsche Boerse confirms Chinese joint venture. (Reuters)

Banking hiring in India to rise by 25% this year. (Economic Times)

Follow @simonmortlock