China investment bank CICC's CEO Levin Zhu resigns
By Engen Tham and Lawrence White
SHANGHAI/HONG KONG (Reuters) - China International Capital Corp (CICC) chief executive Levin Zhu, the son of the country's former Premier Zhu Rongji, has resigned, the most senior of a number of high-profile exits this year at the struggling investment bank.
The younger Zhu is credited with building up China's first investment bank on the strength of his connections, giving the bank exposure to most of the big initial public offerings of state-owned firms during his 16 years' service.
Jin Liqun, chairman of CICC, told Reuters on the sidelines of a conference in Beijing that Zhu thought now was the right time for this move.
"The company also needs to be handed to the next generation," Jin added.
The official Securities Times newspaper said Zhu was looking to start his own business.
Rumours that the bank is aiming for a Hong Kong IPO have been swirling in the media since last year, and bankers said this news could cause a delay.
"Zhu's departure will put a damper on CICC's IPO plans in the short term," said Philippe Espinasse, a former UBS and Nomura investment banker.
CICC has not publicly announced its intentions to list, and Jin said he did not think it would have an impact on any such plans.
CICC said Lin Shoukang, a company insider, would become CICC's acting chief executive.
A selection committee has been established to conduct a global search for a new permanent CEO, according to two people with direct knowledge of the matter.
CICC was established in 1995 as a joint venture between China Construction Bank Corp <601939.SS><0939.HK> and Morgan Stanley, though the U.S. investment bank sold its 34.3 percent in 2010 to KKR & Co , TPG Capital Management [TPG.UL], Singapore sovereign wealth fund GIC and The Great Eastern Life Assurance Co Ltd.
Zhu was at the helm of CICC when it arranged a series of high-profile IPOs for large state-owned firms, including Industrial and Commercial Bank of China Ltd <601398.SS><1398.HK>, the world's largest lender, in 2006.
Earlier this year the bank also lost Jiang Guorong, co-head of investment banking, and Marshall Nicholson, co-head of international investment banking.
As big IPOs have dried up among the SOEs, the investment bank's profits have slipped, while listed rivals CITIC Securities Co Ltd <600030.SS><6030.HK> and Haitong Securities Co Ltd <600837.SS><6837.HK>, firms with more capital and broader networks, have stolen a march by targeting smaller firms.
In the first half of 2014, central government-owned SOEs generated only 14 percent of the fee pool in mainland China, down from 33 percent a year earlier and close to the lowest level in recent history, according to data from Freeman Consulting.
Falling SOE revenues have also hit CICC; it was the 49th most profitable investment bank in China in 2013, down from 29th in 2012, according to data from China Securities Association.
"The number of large-scale SOEs available for listings is getting smaller and smaller. In terms of SME and private enterprise listings, CICC definitely does not have an advantage," said a senior CICC employee.
(Additional reporting by David Lin in Shanghai, Xie Heng and Matthew Miller in Beijing, Beijing Newsroom and Elzio Barreto in Hong Kong; Editing by Kazunori Takada and Will Waterman)
