CICC – once known as «China’s Goldman Sachs» – will look to replicate its expansion drive during the 2008 crisis and cash in on the current coronavirus outbreak.
This was according to CICC’s chief executive Huang Zhaohui, appointed in December last year, referring to the firm’s establishment of overseas offices and the hoovering of top talent amidst industrywide layoffs more than a decade ago.
«The economic and financial crisis resulting from the coronavirus outbreak has created an excellent opportunity for us to speed up our global expansion,» according to an «SCMP» report citing Huang at a recent post-result conference.
«China’s Goldman Sachs»
The Chinese equivalent of Goldman Sachs is not in name only, having sponsored eight of the nation’s ten largest IPOs last year including the $4.6 billion listing of Postal Savings Bank of China. The investment banking giant was founded in 1995 as a joint venture between Morgan Stanley and China Construction Bank with both political and financial weight – its former chief executives include Levin Zhu Yunlai, son of former Chinese premier Zhu Rongji.
According to Huang, CICC’s expansion plans in the coming two to three years include headcount expansion, tech upgrades and more fundraising including an ongoing application for a Shanghai listing. The funds raised will be used for operating capital and potential mergers and acquisitions.
The company will prioritize market share over average employee income, Huang added, and revenue growth over return on equity.
One In, One Out
CICC’s expansion not only coincides with an ongoing crisis but also foreign entry into China’s financial sector.
Just recently, Goldman Sachs and Morgan Stanley took majority stakes in their mainland securities joint ventures joining HSBC, UBS, J.P. Morgan, Nomura and Credit Suisse as majority owners. And the outlook for greater foreign participation is bright with reported interest for full ownership of securities businesses and part or full ownership in asset management businesses.
