*

CICC to reduce investment banking headcount by at least

10%,

sources say

*

Citic cutting around a dozen jobs in Hong Kong, sources

say

*

Would be first major Chinese firms to cut jobs on large

scale

*

JPMorgan ( JPM ) has reduced workforce on China deals, sources say

*

Slower dealmaking, weak economy weighing on sector

HONG KONG, May 7 (Reuters) - Two Chinese companies and

JPMorgan ( JPM ) have become the latest banking groups to cut

jobs in China as a slow recovery in listing and dealmaking

activities force them to ramp up cost controls, six sources with

knowledge of the matter said.

Beijing-based China International Capital Corp ( CNICF )

is planning to reduce its investment banking headcount

by at least 10% this year, two people with knowledge of the

matter told Reuters.

Peer CITIC Securities is cutting around a dozen

investment banking jobs in Hong Kong, according to two other

sources.

The cuts would be the first major workforce reductions this

year at top Chinese investment banks, and would rank among

Chinese banks' biggest layoffs since the end of the COVID

pandemic, as the country's economic slowdown, rising Sino-U.S.

tensions and sluggish capital markets have dampened dealmaking.

JPMorgan Chase & Co ( JPM ) , meanwhile, laid off at least

six bankers in Hong Kong this week, the latest Wall Street bank

to reduce its workforce there, another two sources with

knowledge of the matter said.

All of the sources declined to be named as they were not

authorised to speak to the media.

CICC and JPMorgan ( JPM ) declined to comment on the job cuts. Citic

Securities' offshore platform CLSA did not immediately respond

to Reuters query.

Chinese banks were previously backed by a strong pipeline of

domestic listings and smaller deals but now face collapsing deal

volume as onshore listings stall with uncertainty in the

recovery of offshore markets of Hong Kong.

SHRINKING VALUATIONS

Wall Street and European banks moved throught 2023 to trim

their investment banking workforces in the Asia Pacific region,

with Chinese companies bucking the trend, resorting to job

relocation and pay cuts instead of direct layoffs.

Early in 2024, Bank of America, Morgan Stanley and HSBC cut

dozens of investment banking jobs in Asia Pacific.

The cuts were made as total proceeds raised via initial

public offerings (IPOs) on mainland China plunged nearly 90% to

$2.6 billion for the first four months of the year, the lowest

since 2013, according to LSEG data.

The top offshore listing destinations for Chinese companies

- Hong Kong and the United States - are facing slower dealmaking

and shrinking valuations.

Hong Kong's stock exchange saw 12 IPOs raise HK$4.7 billion

($600.3 million) in the first quarter, a drop of 30%

year-on-year and the worst since 2009, according to data from

Deloitte.

After a $5 trillion fall, Chinese equities are witnessing

some green shoots, with Hong Kong's benchmark Hang Seng Index

(.HIS) up 20% from its most recent low in January and gaining

momentum.

But uncertainty about the recovery is still casting a shadow

over once highly-paid investment bankers, with a majority of the

dealmakers based in Hong Kong.

Bankers and recruiters have said they anticipated staff cuts

that began in late 2023 on the Chinese mainland and Hong Kong,

key regional investment banking hubs for Western banks, would

accelerate this year.

(Reporting by Selena Li, Kane Wu and Julie Zhu; Editing by

Louise Heavens and Emelia Sithole-Matarise)