On the face of it, bankers at Goldman Sachs in Asia may wish to forget 2018. This was the year that the Malaysian government sued their firm for $7.5bn over its involvement in the 1MDB scandal. It was also the year that former Goldman Asia partner Tim Leissner received a life ban from the Monetary Authority of Singapore, after admitting to US criminal charges relating to 1MDB. In Hong Kong, high-flying GS partner Andrea Vella was put on leave over his alleged role in the case. And in November, CEO David Solomon said he felt “horrible” about former employees breaking the law.
But was 2018 really that awful at Goldman? Away from 1MDB, new data suggests that the bank enjoyed a relatively good 12 months in Asia: regional revenues increased, while the firm leapfrogged up key league tables.
Goldman’s full-year earnings results, published on Wednesday, reveal a 4% rise in Asian revenues – from $4,825m in 2017 to $5,033 in 2018. While the GS report doesn’t go into further details about its Asia business, Dealogic ranks the bank first for 2018 APAC (ex-Japan) IB revenue, up nine spots year-on-year, with income of $585m and a 5.2% market share.
Todd Leland, who was named APAC IBD head during an October shakeup of Goldman’s regional management ranks by CEO Solomon, will be particularly pleased by the performance of his M&A and ECM teams. The US firm maintained its position year-on-year as the leading bank by APAC revenue in M&A, while in ECM it jumped from 13th to first place, according to Dealogic. It missed the top-10 in DCM, but as we reported yesterday, all Western banks are now struggling to make inroads in that market.
Predictably enough in the wake of 1MDB, Goldman also failed to make Dealogic’s top-10 for IB revenue in Southeast Asia, the region that includes Malaysia. Data provider Refinitiv ranked it in the 17th spot for SEA in the year to November 2018, with no fees generated from Malaysia.
This is unlikely to have a great impact on Goldman’s overall Asian business, because the firm remains focused on the larger Chinese market, which accounts for just over half of its Asian income. Despite US-China trade tensions and concerns that Beijing is dragging its feet on finance-sector foreign ownership reform, Goldman placed second (behind CITIC) for China IB revenue in a Dealogic table dominated by mainland banks.
Goldman’s problems in Malaysia have not affected its ability to win business from China’s largest state groups, reports the Financial Times. Neither have they dented its reputation among job-seeking Hong Kong bankers, the majority of whom view Malaysia as an unimportant market, says a Hong Kong-based headhunter.
“Many young people want to work for Goldman – rather than say, Citi or HSBC – because they think having GS on their resume will open up more options for them in the future,” a junior banker in Hong Kong told us in October. “And it’s still the most glamorous shop on the street career-wise.”
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