JPMorgan has joined the list of western banks looking to relocate some of its top talent out of Hong Kong, but instead of Singapore, the U.S. bank wants to move a small number of rainmakers to mainland China as draconian covid restrictions mean they have to spend lengthy periods of time away from their families.
The exodus from Hong Kong is real, but it's particularly acute for bankers with families now that finance professionals are working from home again. “Hong Kong flats are not big, and we both work in banking,” said one senior banker. “Throw in three kids and a dog and it's tough.”
The answer increasingly seems to be a temporary relocation, with bankers looking to sit out the pandemic in Shanghai or Singapore. “Covid won't beat Hong Kong or change its long-term attractiveness, but short-term it’s difficult” said one western banking executive who lived in Hong Kong for seven years.
Banks are allowing staff to relocate for family and personal reasons, and some executives have moved to Singapore, although they are struggling to find spaces at school for their children, plus the government is taking a more stringent approach to allowing foreigners in.
For a certain type of Hong Kong investment banker, a move to Shanghai therefore makes sense. Since the pandemic began, many Hong Kong-based bankers covering China have been spending prolonged periods of time away from their families.
“In China, the in-person meetings have kept going,” says another senior Hong Kong-based banking executive. “People go from HK into China, they do their quarantine, and they tend to stay out there for three months. The degree of difficulty and burden of being away from family has increased.”
“You will see people move from HK to the mainland. Shanghai and Beijing and Shenzen will look more attractive on a relative basis than they did before given the tax equalisations that those governments are doing to induce people to come set up shop there”
Bankers with no family commitments are more inclined to stay put in Hong Kong and executives remain bullish. HSBC CEO Noel Quinn told journalists at the bank’s annual results presentation last month that the lockdowns and difficulties currently being faced by bankers in Hong Kong “are circumstances that many other countries have faced over the past two years and that it will not have a permanent negative impact on Hong Kong.”
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