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China's CICC chairman also leaving after CEO quits: sources
[Shanghai] A day after China International Capital Corp's (CICC) high-profile chief executive resigned, sources said on Wednesday that its chairman would also quit this year, highlighting the declining fortunes of the country's first investment bank.
CICC made its name shepherding the biggest state-owned enterprises (SOE) onto the Shanghai and Hong Kong stock exchanges, helped by the impeccable political connections of outgoing CEO Levin Zhu, the 'princeling' son of former premier Zhu Rongji, but has since been left behind by nimbler outfits.
CICC chairman Jin Liqun, who had said on Tuesday after Zhu's resignation that the bank "needs to be handed to the next generation", is also on his way out, two sources close to senior managers at CICC told Reuters, to take up a position at Asia Infrastructure Investment Bank (AIIB), a regional development bank being set up by Beijing.
While Zhu had been at CICC for 16 years, Jin only joined in June last year. "If there are no surprises, Jin Liqun will submit his resignation within the next two months," said one source.
CICC declined to comment on Jin's plans.
The loss of two such senior positions in short order comes on top of other high-profile exits this year at CICC, such as Jiang Guorong, co-head of investment banking, and Marshall Nicholson, co-head of international investment banking.
The bank's connections have been key to its landing big deals such as the 2006 listing of Industrial and Commercial Bank of China Ltd , the world's largest lender. "The changes will have a definite negative impact, because the managers that have left have a lot of influence in the market and have received a lot of public praise," said Chen Xingyu, a Shanghai-based analyst at Phillip Securities (Hong Kong) Limited.
The exodus may also delay the bank's plans to debut on the Hong Kong stock exchange, rumours of which have swirled in the media since last year, though no official steps to list have been taken. "There is a requirement in the listing rules in Hong Kong where you need management continuity for three years for a company that wants to list," said Philippe Espinasse, a former UBS and Nomura investment banker. "If several senior management people leave within the period that starts to impact things," he said.
CICC was established in 1995 as a joint venture between China Construction Bank Corp and Morgan Stanley, though the U.S. investment bank sold its 34.3 per cent stake in 2010 to KKR & Co, TPG Capital Management , Singapore sovereign wealth fund GIC and The Great Eastern Life Assurance Co Ltd.
Officials at GIC, Great Eastern, TPG and KKR declined to comment on the latest departures.
CICC had been the top Chinese investment bank for years, overseeing a number of high-profile SOE listings.
However, as big IPOs have dried up among the SOEs, the bank's profits have slipped, and listed rivals CITIC Securities Co Ltd and Haitong Securities Co Ltd , firms with more capital and broader networks, have stolen a march by targeting smaller firms.
CICC was the 49th most profitable investment bank in China in 2013, down from 29th in 2012, according to data from China Securities Association. "I can't see CICC disappearing. This is probably just a blip, but when you lose a number of senior people in a row, things tend to get worse before they get better," said Espinasse. REUTERS