BOX 2: IS GUANXI ENOUGH?

It’s all well and good to bring in two senior big-hitters. But the awarding of China mandates is a complex process, with a lot more to it than long-standing friendships.

Someone familiar with the process at a rival bank says: “It’s not all about guanxi and relationships. There is a sophisticated client base there that is not going to give you business just because it knows you. Having rainmakers gets you in the door, but unless you have the team and the business structure to win deals, it’s not going to make a difference.”

Leung suggests that he knows this well and says, unprompted, more or less the same thing. “The market has changed. Guanxi helps but at the end of the day we need to deliver our capabilities. You need to have the back-up, the expertise, including global expertise, and the experience, which is one of the reasons I wanted a bigger platform.”

And does Leung feel that he has the right execution skills behind him to deliver? “Having spent a few months at Citigroup, I am comfortable that SSB globally has rich and powerful resources, especially in terms of industry knowledge, technical expertise and contacts. What we need to do is make sure that the Hong Kong and China team can have good access to these global resources. Also we have to develop local knowledge as well as local execution capabilities. I think we have the skills and the talent. It’s a matter of better coordination.” Mills expects a few more hires on the execution side in due course, probably next year, but points to hires such as Kenneth Koo from Goldman Sachs, as COO of China investment banking, earlier this year as evidence of a long-standing effort to build a team rather than a couple of figureheads. Willy Liu, managing director in equity capital markets with responsibility for China, is another recent hire.

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