Morgan Stanley this week laid off several people in its private banking department in Hong Kong, including one vice-president and some associates and analysts.
The bank joins several of its peers in the city that have been cutting back on staff in this area in a year marked by weak markets, dwindling client appetite for investment and trading, and intense competition.
Julius Baer and Goldman Sachs are among others that have also laid off staff recently. Morgan Stanley declined to comment.
The dismal investment environment in Hong Kong, which has led to much lower than usual trading activity, and the fragmented market – exacerbated by increasing competition from new players – have made this year especially difficult for private banks.
"The market slowed down considerably compared to last year. Trading revenue has reduced substantially. Market outlook remains uncertain and banks are taking a cautious approach to reduce cost to income ratio," said Jerry Chang, a director of recruitment firm Barons & Company.
Kenny Lam, a McKinsey partner who specialises in private banking, said: “Costs remain high while revenues have dropped. Profit margins are down to the lowest point in the past five years, based on our estimates.”
