CLSA Ltd.'s top global banker has resigned, and Chairman Zhang Youjun has stepped down, marking another major shakeup at the Hong Kong brokerage. CLSA has been hit by a string of key departures over the past four years.
Charles Lin, the vice chairman of Citic Securities Co., recently resigned from his position after being hired in early 2020. This comes after the firm elevated its head of institutional equities and research, Li Chunbo, to take over from Zhang. Zhang remains the chairman of Citic Securities Co.
Lin, who formerly headed up Vanguard Group's Asian division, was handpicked by Zhang to lead CLSA's international business. However, CLSA's global expansion has largely foundered amid a culture clash with the Chinese state-controlled Citic Securities. CLSA has been gripped by turmoil since 2019, when top management, including Chief Executive Officer Jonathan Slone, quit after being lambasted by Zhang over the ability to earn decent returns and spending.
Nine years ago, Citic Securities bought CLSA, which was once one of Hong Kong's top independent brokers. The firm was founded by two journalists in 1986, and Citic Securities saw it as a potential springboard for global expansion.
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This departure may be due to the ongoing difficulties that the company is facing in terms of revenue, particularly in light of the recent stock and IPO slump in the city. CLSA may find it difficult to maintain its cost-income ratio at the same level as its parent company, even if it takes measures to reduce costs, including executive compensation. The net profit for CLSA dropped by 41% in the first half of the year, compared to a 8% drop for Citic Securities.
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Li joined CLSA as part of a restructuring of the company three years ago. He is a member of the executive committee and the head of research, equity distribution and trading at the Beijing-based company.
Lin took on many of the responsibilities of then CEO Rick Gould, who resigned in 2020 after just 16 months in the role.
When reached for comment, representatives from CLSA did not respond to emails or phone calls.
China's attempt to create its own Goldman Sachs has been met with a number of challenges. The country's biggest banks are state-owned and lack the experience of their Western counterparts. They also face stricter regulation, which has made it difficult for them to compete. As a result, China's banking sector is struggling to keep up with the rest of the world.
Jefferies has announced that former CLSA CEO Slone will be joining the firm as Asia Chairman. This is a significant hire for Jefferies, as Slone brings a wealth of experience and knowledge in the Asian markets. With Slone at the helm, Jefferies is well-positioned to continue its growth and expansion in the region.
Citic, a Chinese investment bank, is tightening its grip on CLSA after a mass exodus of employees. CLSA is a Hong Kong-based brokerage firm that has been hit hard by the departure of key personnel in recent months. Citic owns a majority stake in CLSA, and the move to tighten control comes as the firm looks to stabilize the business. CLSA has been a key player in the Chinese securities market, and Citic is hoping to maintain that position. The move is likely to be welcomed by CLSA’s clients, who have been concerned about the stability of the firm.
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