CITIC Securities to Relocate Hong Kong Bankers to Mainland China

In accordance with people familiar with the matter, China's CITIC Securities intends to relocate dozens of bankers from its offshore platform CLSA in Hong Kong to the mainland in order to cut costs and meet Beijing's call to reduce income inequality in the financial sector.

CLSA is expected to demand that investment bankers relocate to the Chinese mainland with their pay reduced to local levels, in an unusually broad move for an industry where individual relocations are more common, according to three people.

According to the companies' annual disclosures, CITIC's mainland staff earned the most of any investment bank in China last year, with an average salary of 840,000 yuan ($117,107.45).

The first batch of CLSA employees to be relocated is expected to be decided this week, with a "single-digit" figure within the investment banking division impacted based on a performance evaluation, according to the first person.

More are likely to be affected in subsequent rounds, according to the source.

In the long run, more than 30% of CLSA's investment banking workforce of 200 in Hong Kong may receive the offer, according to a second source, who added that the plan was subject to further changes.

More than 80 dealmakers with execution and coverage roles for CLSA's China deals, the majority of whom travel to the mainland on a regular basis, are among those most likely to be impacted, according to the second person.