Ever since the global financial crisis international banks in Asia have been trying to eke out a steadier income by boosting their trade finance divisions. As a result the sector has enjoyed high levels of job security and recruitment.
Now, results from two Asian-focused global banks that have invested heavily in trade finance personnel in recent years – Standard Chartered and HSBC – suggest that trade finance may no longer be such a secure part of the banking sector to work in. Stan Chart’s trade income fell 13.5% year on year in the first half to US$999m. And in the same period, income growth in HSBC’s “global trade and receivables finance” businesses decreased 0.4% to US$1.22bn.
The two banks “have underpinned their expansion into emerging markets on similar expectations: that those economies would boom and trade would flourish,” reports the South China Morning Post. “But that model has come unhinged as growth in global exports falls, dragging with it trade finance revenues at the banks.”
Recruiters who specialise in trade finance tells us that hiring in the sector is not as active in Singapore and Hong Kong as it was 12 months ago, but banks continue to replace staff who leave.
“Barring an unforeseen collapse in China and the related Asian economies, I still believe the trade departments will be able to grow,” Paul Markowski, the president at New York-based consulting firm MES Advisers, told the SCMP. “That will just be at slower rates that are commensurate with the slower pace of growth in global trade.”
And while there are concerns about trade finance at global banks HSBC and Stan Chart, regional bank DBS is looking to expand and hire in the sector following the appointment last week of Iain Taylor as chief operating officer of global transaction services.
Meanwhile:
Hedge-fund sector: Singapore’s success story set to continue. (Business Times)
Senior DBS banker Eric Ang looks back on 37-year career. (Straits Times)
Why it’s worrying that four of the world’s five biggest banks are Chinese. (Quartz)
HKEx to see sterling quarterly results but headwinds loom. (South China Morning Post)
SG50 celebrations kick off in…Hong Kong. (Channel News Asia)
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