Hang Seng Bank to invest HK$1b in mainland market
By Zhang Jin and Lillian Liu (China Daily)Updated: 2006-12-13 08:58
HONG KONG: Hang Seng Bank plans to increase its outlets on the Chinese mainland to 30 by the end of next year and to more than 50 by 2010, joining an expansion spree by overseas lenders, a senior executive said.
"We plan to invest more than HK$1 billion (US$128 million) to expand our mainland network and service capacities by the end of 2008," Chief Executive Raymond Or said in a statement yesterday.
The Hong Kong banking giant has also submitted its application to incorporate on the mainland, and if this goes smoothly, "we will set up a mainland subsidiary bank headquartered in Shanghai in the first half of 2007."
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Hang Seng Bank currently has 15 branches, sub-branches and representative offices on the mainland, fewer than rivals such as HSBC and Bank of East Asia.
The bank has so far invested more than 3.8 billion yuan (US$487 million) in the mainland. In September, the bank had a board meeting in Shanghai, the first time it held such an important gathering on the mainland.
Like most overseas lenders, Hang Seng Bank will focus on the high-end market.
That is also why the branches to be opened will mainly be located in the Pearl River Delta and Yangtze River Delta, two major economic engines and the mainland's most affluent areas, Or said.
New outlets will also be opened in major cities such as Shanghai, Beijing, Guangzhou and Shenzhen.
"We just cannot compete with local banks (such as the Industrial and Commercial Bank of China) in the mass market," he told reporters.
In Shanghai, for example, Shanghai Commercial Bank has around 200 branches, while Hang Seng Bank has just six.
"We would like to mostly and cautiously lend to and deal with foreign
enterprises and wealthy domestic clients that we are familiar with," said Or.
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