SHANGHAI - Bocom International Holdings Ltd, the overseas securities unit of China's fifth-largest lender, plans to hire staff from foreign rivals to help it reach a target of doubling investment banking revenue this year.
Bocom International plans to add 60 bankers, including managing directors and leading industry analysts, to its 300-plus work force, chief executive officer Tan Yueheng said in a May 23 interview in Hong Kong. The Bank of Communications Co unit has rented additional office space in Hong Kong this year.
"For key positions, we are definitely willing to pay more," said Tan. "Chinese investment banks tend to pay less to bankers than their foreign peers. We do want to narrow the gap to lure talent."
Matching the pay offered by companies such as Goldman Sachs Group Inc and Deutsche Bank AG has been a major obstacle for Chinese securities companies trying to expand outside their home market.
UBS AG and HSBC Holdings Plc are among the global companies that have said competition for bankers in Asia is driving up pay and squeezing margins.
Haitong International Securities Group Ltd, the overseas unit of China's third-biggest brokerage, aims to double its investment-banking team, chief executive officer Lin Yong said in an interview in April. ICBC International, the overseas investment banking unit of the world's largest lender by market value, plans to hire more people from global rivals, Deputy CEO Mary MacLeod, said in an interview.
Tan was vice-president at China Merchants Finance Holdings Co, a unit of China Merchants Group Ltd, for more than four years before becoming the top executive at Bocom International in 2007. Under his leadership, the firm has improved from 64th on the Hong Kong stock underwriter list in 2007 to 13th this year, according to data compiled by Bloomberg.
Goldman Sachs Group Inc and Morgan Stanley are first and second among stock underwriters in Hong Kong this year, Bloomberg data show.
Glencore International Plc, the biggest commodities trader, raised $2 billion from the Hong Kong portion of this year's largest initial public offering. Samsonite LLC, the US luggage maker backed by London-based CVC Capital Partners Ltd, plans to start trading in Hong Kong in mid-June after a $1 billion IPO, people with knowledge of the matter said on May 12.
Prada SpA, the Italian producer of Miu Miu bags, aims to list in the Chinese city in late June after a $2 billion IPO, people with knowledge of the matter said. "Investment banking and direct investment are our major business focuses now," Tan said. "We expect to grow our revenue and number of deals by 100 percent this year. It's harvest time for the direct investment projects we have been involved in since 2008."
BOC International Holdings Ltd and Citic Securities Co are among the top 10 underwriters of stock sales in Hong Kong this year, data compiled by Bloomberg show.
The two Chinese banks and HSBC Holdings Plc managed Hong Kong's first yuan-denominated IPO for Hui Xian Real Estate Investment Trust, which raised 10.5 billion yuan ($1.6 billion) in April.
Bocom International helped arrange the initial offering of the aluminum producer China Hongqiao Group Ltd, which raised HK$6.4 billion ($822 million) in March. It also helped manage the HK$1 billion IPO of Hilong Holdings Ltd, a Chinese provider of oilfield services, in April.
The brokerage aims to take advantage of the growing use of the yuan in international trade and finance. Bocom International plans to start a Hong Kong-based fund to invest in yuan-denominated assets in July, Tan said, declining to comment on the size of the fund.