Royal Bank of Scotland has hired Qing Zhu and Wei Wang as managing directors in investment banking to strengthen its China coverage.
Zhu will head energy and resources for China, while Wang will head the financial institutions group (FIG) for the country.
“China is a very important market for RBS, where we see tremendous growth potential, particularly in the energy and resources, and FIG sectors,” said Matthew Kirkby, regional head of global banking and global head of corporate finance for RBS in a written statement. Kirkby himself returned to Asia last year to lead the build-out of the investment banking business in the region for RBS.
Last month RBS launched Huaying Securities, its securities joint venture with Guolian Securities, making it the first UK bank to have a fully operational securities joint venture in China. Huaying was the first securities JV to open this year.
During the course of his career, Zhu has spent four years at J.P. Morgan with a focus on the China natural resources and real estate sectors. He also held the position of co-head of China investment banking at CLSA and worked at Salomon Brothers in the China IB team. Zhu is based in Hong Kong.
Wang has 20 years of corporate and investment banking experience. Until last month he was head of the public-sector group at Citi in China, responsible for the bank’s coverage of sovereign wealth funds, policy banks, postal office and municipal governments. Before that, he was a senior member of the FIG team at HSBC China, responsible for covering leading Chinese banks. Wang will be based in Beijing.
A Citi spokesperson said that Wang’s replacement has not yet been announced.
Both Zhu and Wang report to Sherry Liu, China chairman and CEO, who RBS poached from J.P. Morgan in April this year. She is responsible for overseeing and driving the overall business strategy of RBS in China across banking, markets, wealth and various joint venture investee companies in the country. Additionally, Zhu reports functionally to Viral Gathani, who is head of energy and resources for RBS for Asia, and Wang also reports regionally to Kenneth Tung, who is regional head of financial institutions for RBS for Asia-Pacific.
RBS joins a number of banks that are investing aggressively in their investment banking franchise in China as they seek to wrest a larger share of the revenue pool in the country from some of their more established competitors. Investment banking revenues in Asia are disproportionately driven by China, while deals from India are often loss leaders and the overall pickings from the world’s second most populous nation are not yet meaningful for any investment bank. Other Asian economies are not big enough to yield the steady and large revenue flow that China does.
China, in contrast, is providing opportunities for a number of players to book fees, especially in equities, which for the past few years has been estimated to account for between two-thirds and three-quarters of overall Asia fees. For example, IPO mandates from Chinese companies between $100 million and $250 million increased threefold between 2009 and 2010, from around 80 mandates to around 240 mandates. Getting China right is critical to success in Asia, for the foreseeable future at least.
