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Hong Kong Investment Banking Management Trainee Jobs and Opportunities
Investment bankers perform an array of important financial services, including underwriting, brokering, providing financial advice, helping to facilitate mergers and acquisitions between corporations and trading securities and investments in the stock market.
The banking and finance industry in Hong Kong is one of the largest in the world, and the HKD is one of the world’s most traded currencies. Due to Hong Kong’s status as a hub of global financial exchange, it is an excellent place for anyone to work in investment banking.
What do you need to get a job in this industry?
For management trainees, it can be difficult to break into the investment banking industry, as jobs in this sector are highly lucrative and thus competition is high. Candidates have to be very well qualified, with both the practical financial skills required as well as linguistic fluency in at least two languages (Mandarin and/or Cantonese, as well as English). A BBA is the most common degree required. Relevant work experience is also usually required to for a candidate to stand out. Securing an internship with an investment bank or other financial firm is therefore a wise move to make in penultimate year.
Types of Investment Banking Jobs for Management Trainees
The type of job performed by a person working in investment banking will vary depending on the type of organisation and where they are situated vis-à-vis the structure of the company (whether they work in the front, middle or back offices).
The front office generates the revenue for the financial services firm. Jobs in the front office are the ones which most commonly come to mind when one thinks of “investment banking”, and this is understandable, as the front office is the client-facing side and those who work there are more visible. It is split into three sections:
- Investment Banking
In this section of the bank, financial advice is given to large corporations and organisations, on such things as fund-raising strategies, mergers and acquisitions. Base salaries here are the highest out of the bank’s departments. First year graduates and management trainees can earn over HK$690 000 (depending on the bank and performance).
- Sales and Trading
The sales and trading department in the front office provides intermediary (e.g. brokerage) services between sellers of financial products and investors, and finds buyers in the stock market for underwritten securities. Investment bankers who work in the sales force build relationships with high net-worth and institutional clients in order to sell them the products, and as a result, have the responsibility to communicate information about changes in the state of the company or the securities to investors, and to keep up a stream of relevant, timely market information between traders, clients and research analysts. People who work in sales must be good at face-to-face, verbal and written communication, and must be able to build and sustain good relationships. Traders on the other hand, rarely interact with clients. Their role is to carry out the actual transactions – the buying and selling of securities both on behalf of clients (for commission fees) and on behalf of the bank. Traders typically become specialists of particular kinds of stock, as the industry is so large and complex. While the base salary for a banker working in the sales and trading department is lower than those working in the advisory (investment banking) department, they can make significantly more money overall due to commissions if they are very skilled.
Research is a crucial department in an investment bank. Here companies are analysed, reviewed and reports are written informing investors about the projected prospects of the company – whether they are recommended to buy or sell. Research therefore assists clients in their investment decisions. Sometimes a bank will sell its reports to institutions and investors. The research findings are also used by traders, sales and investment bankers (advisors).
The role of the middle office is to maintain and support the health of the bank, and to make sure that it does not engage in too much risk when underwriting or trading. They also help support the client-facing roles of the front office, for instance in the capacity of a “client service analyst”. Some of the major roles in the middle office are listed below.
- Risk Management
Middle-office risk managers analyse the risk involved with the bank’s making any kind of financial commitment – whether it is lending, investment, underwriting or providing advice. Risk management may also be provided as a revenue-generating service to clients via the front-office of the financial services firm.
- Corporate Treasury
Treasury managers are responsible for maintaining the bank’s capital structure, obtaining funding and monitoring liquidity risk. In some respects their role overlaps with that of a middle-office risk manager.
- Internal control
The internal control department is responsible for the direction of the bank’s resources, for protecting its tangible and intangible resources. They ensure that the bank achieves optimum efficiency and effectiveness in operation, and that the company complies with all financial reporting obligations, laws and regulations. They also play an important role in the achievement of the organisation’s strategic objectives.
The types of middle-office jobs available in investment banking will vary depending on the size of the organisation. The larger the bank, the more specialised the roles become. For example, in JP Morgan there are roles like “Change Management Specialist” and “Trade Support Analyst”.
The back office is where the administrative tasks of the bank take place. It is the least lucrative section of the bank, but some workers still may receive high salaries. In addition, an increasing number of back-office jobs are becoming automated or outsourced. The main departments in the back office are listed below:
Unsurprisingly, the IT department is absolutely essential to the running of the bank, as most trading and transactions are now carried out through the internet. In addition to maintaining a secure platform and network for e-commerce, the investment bank’s IT department needs to sustain all the information systems that enable the bankers themselves to conduct their work. IT jobs in investment banking range from technical support to actually designing new systems for the bank.
The operations department of the back office is concerned with clearing trades (ensuring that records of financial transactions, such as a share trade, match on both the buy- and sell-side). They are also responsible for “settling” the trades, which involves making sure that the bank receives and disburses the right amount of money for the securities it purchases and sells. Often the job will involve stepping in when the automatic clearing systems develop a fault. It may also involve processing “over the counter” derivatives. Also in the operations department are the trade support officers, whose role is to solve any discrepancies that might arise between different traders. Senior members of the operations department may have a strategic role to play in the running of the bank.
Salary Estimates for Investment Banking Management Trainees
While a job in investment banking may be expected to eventually pay very highly, starting salaries are not that much higher than in any other financial services – ranging roughly between HK$240-300 000. This will depend on the employer of course. Work hours will be long, and the job pace will be fast and stressful. That said, the Hong Kong tax rate is low, and banks often provide benefits to their workers in the form of insurance, bonuses and travel or living allowance.