Singapore-Banking

Investment Banking in Singapore

In Investment Banking by Gaurav SharmaUpdated On:

Singapore-Banking

Singapore – the Lion City of South East Asia and one of the world’s major financial hubs. Over the last half century, the city has emerged as a global shipping hub and the financial capital of the South East Asian market. Singapore’s attractiveness as a financial hub has to do with its political and economic stability and strong legal system that makes investors confident about investing their cash there.

While the Singaporean economy itself is pretty small, it acts as a hub for all of South East Asia. Additionally, several cross-border deals involving larger Asian economies like India and China also used to be worked on from Singapore, although this happens a lot less frequently now. Singapore punches well above its weight class when it comes to investment banking deal flow. The compensation offered to banks in Singapore is at par with several major economies and way above regional averages.

1. The IB Landscape in Singapore

1.1. Market Size and Sector Specialisations

While Singapore is a finance hub for all of South East Asia, the overall market is still smaller than the US, EU or East Asia. So team sizes tend to be smaller and the deal sizes are also smaller. Because of this, sector specialisations are also less common compared to larger markets like the US. In fact, some banks even merge product groups.

In terms of sectoral focus, it depends on the country the deal is originating from. Singapore itself is a shipping hub so such deals are mor common. While the rest of South East Asia is resource rich and thus attracts deals in natural resources like palm oil, coal, rubber, mining and so on.

1.2. Largest Investment Banks in Singapore

Almost all of the largest investment banks in Singapore are American with a few European ones thrown in. JP Morgan, Morgan Stanley, Credit Suisse, Citi, Bank of America Merrill Lynch, UBS, HSBC, Standard Chartered, DBS (the only local bank) etc. tend to dominate the league tables. Notice that Goldman Sachs is missing from that list.

Singapore’s biggest attraction is that it is a stable economy with a strong rule of law. This attracts investors to it even though the market size is smaller. It does not have the market depth for mega deals, but it does punch way above its weight when it comes to mid-sized deals.

2. Breaking into IB in Singapore

2.1. Academics

This part is pretty straight forward in Singapore compared to the rest of the world. You have three main national universities, so you don’t have to worry about target vs non-target. While finance, business or accounting degrees would be preferable, tech, math and science degrees work just as well. Singapore is known for its tech savvy grads, but it also attracts some of the brightest minds from Asia so the level of academic competition tends to be higher. More than anything else, you need to focus on your GPA.

Another option for local students is to graduate from top universities in the US/ UK and then come back. Such candidates are usually given preference over others depending on the university they graduated from and their grades. If you are not form South East Asia, you would be expected to demonstrate your commitment to staying in Singapore.

3.2. Courses and Certifications

While your academic performance will be the single biggest deciding factor to getting a shortlist, you can take some certifications to showcase additional expertise and commitment. Moreover, these will help you considerably to push through the selection process including tests and technical interviews. Here are the top ones:

Best Investment Banking Courses ranked by Bankers (2020)

3.2. Languages

The bulk of your deals would be form South East Asia so language proficiency in one or more of those local languages is a must. English is obviously mandatory.

Banks prefer candidates form Asia (as opposed to US/ Europe) who they know are more likely to stick around and are not going to just go back after getting the experience.

3.3. CV Building

You should focus on academics, extra curriculars and internship opportunities in order to build up your CV. You need to showcase that you are hardworking, committed, driven, but also also that you have a good personality and are fun to be around and work with. Remember how I said teams in Singapore are much smaller than in other countries? That means they focus more on “fit” and soft skills.

If you need help getting your CV ready, here are some services that specialize in finance to help you out:

Best Resume Writing Services – Investment Banking & Finance

3. Working in IB in Singapore

3.1. Salaries and Compensation

Investment Banking Analysts (0-3 years) in Singapore make about S$120,000K with a bonus of around 30%-60%. As an Associate, you can expect to make around S$200,000 with a bonus of 30%-80%. These numbers are highly subjective though. It mostly depends on the bank and the team as some tend to pay more than others. It also depends on performance and the general state of the economy but should be enough to give you a general idea. Managing Directors usually pull in a million plus.

3.2. Work Culture and Hours

Even though the bulk of investment bankers work for US banks in Singapore, the culture is significantly more relaxed. The hours are better and almost sensible when there are no major deals going on and no pitches/ proposals being worked on. But when something is being worked on, you can expect to stay quite late but that is par for the course. If it’s genuine work and all-nighters happens rarely, it doesn’t chafe as much.

3.3. Career Prospects and Exit options

Exit options are similar compared to Investment Banking analysts everywhere. Many move to buy side roles like private equity and there are plenty of opportunities for PE in Singapore. As Singapore is a major tech hub with an excellent business climate, a high percentage eventually go on to forming their own companies.

That being said, the natural attrition rate in Singapore IB is not as high as in the US. Because of better work culture, many decide to stay in banking and enjoy long and fruitful careers. Another interesting thing to note about Singapore is that it has a rather large wealth management sector because of the disproportionate number of High Net Worth Individuals from Asia who tend to settle there.

About the Author

Gaurav Sharma

Gaurav started his career as a Corporate and Investment Banking intern at Citi in 2009 and eventually ended up as an Associate Director at Standard Chartered Bank’s Wholesale Banking division a few years later. By 2016, Gaurav was consulting FinTech start-ups in London with product development in the institutional banking space. He also advises mid-market Private Equity/ Asset Management firms and Banks in North America and Europe with investments in the financial services and FinTech sector. Gaurav writes on topics ranging from European Union banking regulations and FinTech to Blockchain startups and the inevitable rise of our AI overlords! He has an Engineering degree in Computer Science and an MBA with a double major in Finance and Marketing. He is also a Certified Financial Risk Manager.