FinanceAsia met David Olson on an auspicious day. It had just been announced that he would be made CSFBs head of investment banking for Japan, Asia and Australia/New Zealand. Meanwhile, on the same day, CSFB launched its online brokerage tie-up with Hutchison Whampoa, which is sure to help the firms relationship with Asias top conglomerate.
Q: How will you split your time between Japan, Asia and Australia and New Zealand?
A: The concentration of my effort will be in non-Japan Asia and Japan. We are much more fully built in non-Japan Asia than we are in Japan. So in 2001 I expect to spend a fair amount of my time in Tokyo. I will clearly spend the majority of my time based here in Hong Kong. And it looks like the most active market for the year will be China.
Q: Are you bullish on Japan, based on its potential for another banking crisis and its chronic low growth?
A: Its hard to be bullish near term. But it is obviously an incredibly important market longer term. Were in our building phase there and in a sense its fortunate that the markets arent thriving. It makes it easier for us to hire and develop good people. But its so important to our future that our commitment is unconditional.
Q: Have you peaked? Under Marcus Everard and Alastair Walton, CSFB grew the Asian investment banking team phenomenally. It now numbers 235 bankers.
A: Marcus and Alastair have built a first rate team. And its a team of some size, so there will be less need to grow that. However, there are other places where we will be growing, such as Japan. In Japan we currently have 37 bankers. And that will be an area where we will show substantial growth over the next year.
Q: The talk around Hong Kong is of markets turning down thanks to the US and many are wondering whether investment banks will downsize. Will CSFB keep the same headcount in Asia?
A: Ive obviously heard the same market talk. Were in a slightly different position in Asia, because of the CSFB-DLJ merger. We made some tough decisions during the integration. So we wont see meaningful reductions of headcount in the foreseeable future.
Q: Are you concerned about the US?
A: You have to be. The US markets have a funny feel to them right now. Rate cuts are not translating into much bullish sentiment. Having said that, with tech and other sectors being so badly beaten up, theres reason to be optimistic if you can look far enough into the year. US company gearing has exploded in the last couple of years. Some of the numbers are not far off Korean chaebol levels And youve seen non-performing loans in the major banks going up. Defensive steps are increasing. Were entering an environment with poorer credit quality, so we will have challenges in 2001.
Q: How will you beef up your coverage in China, which is clearly the key market right now?
A: Weve made a lot of progress in the last year or so and were going to try and build on that. We have the CNOOC mandate which is scheduled for a February listing and that looks to be the first deal of size this year. We have other mandates in China that we are also working on.
Q: What do you think the secret is of having a good China franchise?
A: It takes a combination of things. It takes local connections and cultural understanding. It takes the skill set to execute on very difficult transactions, it takes the commitment of the firm to persist in often volatile markets so its a combination, and weve really started to get it right in the last 12-18 months.
Q: You are probably the only head of investment banking in Asia with such a strong Financial Institutions Group background. Will that help in winning the forthcoming mandates to privatize Chinas major banks?
A: We hope so. Its not just my background. The head of non-Japan Asia, Alastair Walton, is a former FIG leader. We have a very unique one-two punch. We also have some excellent industry bankers led by Michael Tan. So we can look forward to that being an area of concentration for us.
Q: There were lots of rumours about you going back to the US? Are you surprised to still be in Asia?
A: I had just arrived in March 2000 to take a post at DLJ that would have involved building a team. I see the combination of CSFB and DLJ as having let me fast-forward to a very well built team. My new job is to take that team to the next step. I didnt really envisage a move out of Asia after the combination.
Q: What is the logic of splitting Marcus Everards dual role as head of investment banking and head of the emerging markets coverage group? You will do the former and Neil Harvey the latter?
A: They are two very large jobs. I consider it a near miracle that Marcus was able to do both jobs so well. Marcus Everard could multi-task like no other. And those jobs are growing in complexity every day. We believed as a firm they required two senior people.