Singapore Glamour Evades London Bankers

With one eye on his BlackBerry and the other on his wristwatch Kevin Faulkner, a senior executive in Deutsche Bank’s IT team, enjoys a quiet lunchtime pint at The Bank, a popular bar on Singapore’s Raffles Quay.

Louis Vuitton at North Pavilion, Marina Bay. Further in distant is business district of Singapore.
William Cho | Flickr | Getty Images
Louis Vuitton at North Pavilion, Marina Bay. Further in distant is business district of Singapore.

“Even if it’s tough and times are not as good as they have been, people would rather be here in Asia than anywhere else,” he says.

The allure of the east appears to be growing in London as lower revenues and new regulations force banks to trim trading desks and cut mergers and acquisitions advisory staff.

Singapore, with its low taxes and hot climate – an antidote to the onset of another dreary British winter – is much talked about in the bars of the City of London.

So much so that Astbury Marsden, a recruitment company, found in a survey that a third of London bankers would rather be working in Singapore .

Yet there is scant evidence of a flight eastwards. The survey appears to reflect wishful thinking rather than a shift in banking jobs to the Asian financial hub.

“I’m sure they’d love to be in Singapore but the reality is that the environment is pretty tough here and, at the end of the day, everything is relative,” says Simon Roberts, head of Asia-Pacific at Sheffield Haworth, a recruitment company. “The market is over-bid and over-broked.”

Standard Chartered , for which Singapore is the second-largest contributor to group income and profits after Hong Kong, says it has not found the number of UK-based staff opting to move to Singapore any higher than usual.

Not only has the Singapore dollar strengthened against the British currency in the last two years – making it more expensive for London-based institutions to pay for staff – but also deal flow is down everywhere.

Hong Kong is in any case the preferred base for M&A bankers in Asia, even though some activity has picked up in Singapore with a S$5.4 billion battle that has set Dutch brewer Heineken against Thailand’s ThaiBev for control of Asia Pacific Breweries , the maker of Tiger beer.

Where Singapore is seeing hiring growth is in transaction banking, the unglamorous trade finance and cash management services crucial to oiling the wheels of commerce.

In south-east Asia, where corporate balance sheets are relatively strong, that business is providing fat profits as companies hire banks to support their working capital needs.

Banks pushing into this area include ANZ of Australia, France’s BNP Paribas and Royal Bank of Scotland , whose global head of trade services, Anand Pande, moved to Singapore from London six months ago.

At DBS , Singapore’s largest bank by assets, transaction banking accounted for 9.6 percent of group net profit in 2010 but had jumped to 21.6 percent by the first half of this year, while headcount has grown 52 percent in the same period.

United Overseas Bank, a rival, says the value of trade loans extended to customers in the first half was 18 per cent higher than the same period last year.

Tony Singleton, Asia-Pacific managing director for Reval, a treasury and risk management software group, says companies in south-east Asia are trying to maximise their return on excess cash and manage their counterparty exposures “more intelligently”.

“For their part the banks are trying to grow or protect ‘share of wallet’ and they are replacing volatile trading room income with more reliable annuity fee-based streams,” he says.

Recruiters say it is at Asian operators that most of the hiring is taking place.

Declan O’Sullivan, managing director at Kerry Consulting, says: “Working in Asian financial institutions is more attractive as they have the balance sheet and can engage in...activities where US and European banks have dominated.”

Elsewhere the hiring picture is mixed. While commodity trading has become a big part of Singapore’s financial sector, banks are struggling to hire as the most talented staff are poached by trading houses such as Trafigura, Glencore and Mercuria.

That has prompted banks to shift people from Europe and the US, mostly in top management positions. But these are not new jobs, recruiters say.

In addition, Asian experience is almost always seen as crucial. “There are a lot of commodity traders calling who want to make a move, it’s just that there aren’t many businesses looking to hire people who’ve never worked in Asia,” says Jules Marx, senior consultant in commodities at Sheffield Haworth.

Singapore is also starting to lose the crucial back office jobs that support any bank’s activities amid competition from India and the Philippines. Even where banks are recruiting staff from the west, they are paring back packages.

Will Feint, principal consultant at Confero, a banking technology recruitment company, says: “The banks are playing it very cautiously. They won’t just match what they are paying in the UK.”