An estimated 200 Hong Kong bankers lost their jobs in the past year, senior analyst Francis Chan wrote in a report published Monday. With pay for senior bankers that’s 40-70% higher than peers receive in Singapore, Hong Kong bankers may find their compensation becomes a “curse” as employers cut back, Chan wrote.

“More global banks may further trim workforces in the city to achieve bigger cost savings, especially during China’s slowdown,” Chan said.

Global financial firms have been cutting investment-banking staff in Asia due to a deal drought amid deteriorating U.S.-China relations, a crackdown on private enterprise and a property crisis. Morgan Stanley and HSBC Holdings Plc are among banks that have made cuts to their investment bank this month, with Hong Kong and China bearing the brunt. 

Initial public offerings have been depressed in Hong Kong, with proceeds slumping to the lowest in more than two decades last year. The money raised from IPOs fell another 29% in the first quarter to about $605 million, the worst three-month period since the global financial crisis. 

While there are a higher number IPO applications in Hong Kong, IPO prospects for the city “may remain dire,” the report said. 

U.S. dollar and Hong Kong dollar bond issuance in Hong Kong have fallen significantly from the peak in 2020, according to Bloomberg Intelligence.

Investment-banking analysts and associates in Hong Kong made 30-100% more than in Singapore, mainland China and Japan, while directors and managing directors made 40-70% more, according to a Hays Asia survey in late 2023. 

In comparison to investment banking, the job market in wealth and private banking remains stable, with mainland wealth funds flowing to Hong Kong, benefiting banks including HSBC Holdings Plc, Standard Chartered Plc and Bank of China (Hong Kong). 

“Hong Kong’s finance professionals could face diverging fates due to different prospects for its capital-markets and wealth-management sectors,” wrote Chan.

John Mullally, managing director for Hong Kong at recruiting firm Robert Walters told Bloomberg Television that a lot of clients are saying they are “at the bottom” in terms of cuts. 

“The sense we’re getting is that there’s probably going to be a little bit more trimming over the next kind of quarter, quarter and a half, but that as we go into the second half of the year, there will be some improvement,” he said. “But that isn’t going to necessarily result in hiring anywhere near the levels of 2021.”