In the last few months, a multitude of high ranking professionals has left their high paying jobs at international Investment banks to join domestic ones. Some prime example of this include Vikas Khattar, who after working with international firms like HSBC, Morgan Stanley, Jeffries, Merrill Lynch and Citi for over 20 years joined domestic banking firm Ambit Capital and Anjani Kumar who took the job of managing director at O3 Capital after 20 years of working at international banks like RBS, ABN Amro and CIMB Securities. Industry experts say that in total, over three dozen such professionals have joined domestic firms in the last one year.
There are various reasons why this has been happening. Of late, with domestic firms offering a lot of growth opportunities, the appeal of having a great job at international firms has gone down among executives. Clients nowadays are more inclined to work with Indian firms considering all the time and effort that they have put in recent years to understand the Indian market and construct meaningful relationships with Indian companies. Domestic Investment banks are now also building ties with international companies so that customers do not lose out on any services which until now they could have only gained from international companies.
When it comes to fees and incoming revenue, the amount of Investment banking courses done in India has grown substantially in the last three years. Indian firms have scaled up massively in terms of operations and deals being struck. As such, the scope for growth is much more in Indian banks when compared to international ones. This attracts a lot of executives from international outfits to join Indian ones instead.
The fact that international banks have significantly scaled down their operations in India over the last few years have also contributed to these migrations. On the other hand, many domestic firms are now a part of large conglomerates which offer a multitude of services to their customers. Stock prices and its related benefits have also been a big factor. Executives working at international firms often have a harder time reaping the benefits of their shares when compared to ones working for domestic firms despite international ones having a higher cash component. As such, domestic banks offer much better wealth creation opportunities to their employees. As operations by domestic firms continue to grow, so will the wealth creation opportunities for these executives.