Bonuses in Hong Kong have generally been disappointing and investment banks there continue to trim costly under-performing senior staff.
But there’s more encouraging news for investment bankers in Hong Kong when it comes to base pay – at least in comparison to their counterparts in rival Asian financial hub Singapore.
If you’re working in mergers and acquisitions (M&A) in Hong Kong your salary is now likely to be about 25% more than it would be in Singapore, according to the comparison of pay at vice president (VP) level across 10 key job functions in the chart below.
Converted into US dollars, VPs in Hong Kong receive US$221k a year, while Singaporeans in the same job ‘only’ get US$176k (based on figures averaged out from salary surveys of several recruitment firms). The difference is similar in equity capital markets (ECM).
“The pay gulf in M&A between Hong Kong and Singapore is growing as the Chinese market grows and Hong Kong takes advantage of its better access to China,” says a headhunter who operates in both markets and who asked not to be named.
He adds: “Western banks want mainland M&A expertise as Chinese companies expand abroad, but so do Chinese banks and Chinese corporates are hiring bankers in-house too. This is helping to push up salaries and making the job market more competitive than in Singapore.”
Last year China was the top targeted nation for Asia Pacific (ex Japan) M&A volume with $651.0bn in deals, up 51% from 2014, according to Dealogic. By contrast, in Southeast Asia – the region serviced by Singapore – M&A volume fell 3% over the same period to reach $63.6bn. “Let’s face it, most good M&A bankers in Asia will try to gravitate to Hong Kong – it’s where the money and the deals are,” says the headhunter.
Not all the job sectors in our table are better paid in Hong Kong than in Singapore, however. In compliance and corporate banking relationship management, Singapore is suffering from more severe skill shortages than its northern rival – and base pay in the city state is higher as a result.
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