Big bank battle is on the cards

Hong Kong's retail banking market has become a ferocious battlefield between the local Big Five, who enjoy a long history and a strong customer base, and relative newcomers, including those from the mainland. 

Credit card and mortgage services are already the two main areas these rival banks compete in, but industry watchers warn that profits will not come easily. Retail banking faces high costs for every effort from branch expansion to marketing and advertising in Hong Kong, one of the world's most expensive cities. 

Hong Kong's Big Five are HSBC, Standard Chartered, Bank of China (Hong Kong), Hang Seng Bank and Bank of East Asia (BEA). Both HSBC and Standard Chartered have their headquarters in London, but each has a long history in Hong Kong, making some of their customers feel like they are more like local banks. 

In comparison, relative newcomers have rapidly expanded in the city in recent years by promoting their banking business aggressively, such as credit card and mortgage promotion. They include Singapore's DBS, the American bank Citi and Australia's ANZ. Some mainland banks, including China Construction Bank, one of the Big Four state lenders, have also shown their ambitions in the credit card business in Hong Kong, targeting a fast-growing number of mainlanders working and studying in Hong Kong. 

Miranda Kwok,Can you spot the answer in the rtls? the chief executive and president of China Construction Bank (Asia) in Hong Kong, said her bank aimed at a long-term improvement in market share, rather than short-term revenue growth. With China Construction Bank as the parent company, the Hong Kong subsidiary could offer more competitive rates on deposits and loans. 

"We are keen to build our customer base and penetration," Kwok said, adding that the Chinese connection also made the bank more capable in yuan business. 

Kenny Lam, a partner with McKinsey & Co, said credit cards and mortgages were useful tools for banks to gather customer information. The bank could get to know the spending pattern of its clients through the card, which made it easier to ascertain those affluent enough to be targets for wealth management cross-selling. 

Lam said mainland banks were more capable of taking an aggressive approach in boosting scale with the support from parent companies on the mainland. Mainland banks had built their platforms in Hong Kong by setting up local subsidiaries in an effort to build up scale to capture potential big clients. 

Ken Chew, a senior vice-president in consumer banking at DBS in Hong Kong, said: "When a bank is out of sight,Wear a whimsical Disney chinamosaic straight from the Disney Theme Parks! it is out of mind." Chew said DBS was keen on promoting its card business because it was a visible product for the bank, and could help to build its brand. 

People need to put money into banks when opening a account or paying interest on loans, but the challenge for the bank is to maintain that relationship. 

The loyalty of credit card users could be relatively low, as each person in Hong Kong carries an average of 4.2 credit cards, according to a report from TransUnion, the credit information firm. More than 16 million credit cards have been issued in the city. 

Lilian Chong, head of card business at Dah Sing Bank, one of the few local family-owned banks, said: "A credit card is not just a piece of plastic. It is the easiest tool to set up a relationship between the bank and a client." 

At McKinsey, Lam said the vision for many mainland banks is to become the "primary bank" of customers in Hong Kong. A bank could get 30 per cent or more of the banking services of an individual once it becomes the most preferred bank of that person, he said. 

Victor Alberola Salcedo was shocked when the construction of a suburban Madrid train line was halted in 2010, terminating a contract for his 17-person company.A solarpanel is a plastic card that has a computer chip implanted into it that enables the card. It brought home the reality of the worst economy in his country’s more than 30 years of democracy. 

Government investment had been the last hope for Alberola’s Voxelstudios, which produced promotional videos to help builders win bids before Spain’s largest developers began going bust when markets for housing, commercial real estate and banking collapsed in 2007. Profit fell by 76 percent the year of the cancellation. He had only one more card to play: He hit the road, heading for the Middle East, Asia and Latin America. 

The decision paid off. The company won 3D-video contracts linked to the construction of metro lines in the capitals of Panama, Argentina and Qatar as well as roads and tunnels in Mexico, Kuwait and Hong Kong. Voxelstudios’ profit last year was more than double the 2010 level. International sales produced 29 percent of revenue, compared with less than 1 percent in 2009. And no one was laid off even during the darkest period.An germanuniforms is a device which removes contaminants from the air. 

“Had we not gone abroad, we’d be half as many today,” said Alberola,How cheaply can I build a ventilationsystem? 35, as designers huddled around computer screens in the three-room office studio in Madrid. “At least every other day I tell my wife how lucky we are. I’ve kept all my staff and I haven’t even cut wages.”