83 Des Voeux Road, Central
Company Perspectives:
Our corporate tagline--'Hang Seng Bank. Exceed. Excel.'--highlights the high standards we have set ourselves to exceed your expectations and excel in our operations. We shall continue to grow with you and with Hong Kong in the years ahead, helping you realize your financial aspirations and scaling new heights as the 'ever-growing bank.'
Hang Seng Bank Ltd. is Hong Kong's second-largest bank, behind the Hong Kong and Shanghai Banking Corporation, which, like Hang Seng, is majority controlled by the United Kingdom's HSBC. Hang Seng operates throughout Hong Kong, with more than 155 branches, including locations in Mass Transit Railway stations and a strong network of automated teller machines. Hang Seng provides the full range of commercial banking services for the both the retail and corporate sectors, as well as credit and debit card services, insurance policies, home mortgages and automobile loans, and investment services. With the slowing down of Hong Kong's economy following its return to Chinese control, Hang Seng has joined its compatriots in seeking new expansion opportunities on the mainland. Since the mid-1990s, the group has opened a number of branches in Chinese cities, including in Shenzhen, Shanghai, Fuzhou, Najing, and Guangzhou. The company also operates representative offices in Beijing, Xiamen, and Taiwan. In 2003, the group began negotiations to acquire an equity stake in Minsheng Bank, the largest privately held bank in mainland China. Although initial negotiations failed to reach an agreement, a future alliance between the two banks has not been ruled out. HSBC controls just over 62 percent of Hang Seng, which trades on the Hong Kong Stock Exchange and is a member of its Hang Seng Index--created by the bank in the late 1960s. The group posted an operating profit of HK$10.68 billion ($3.65 billion) in 2002.
Exchange Shop Origins in the 1930s
If Hang Seng emerged as one of Hong Kong's most powerful banks in the late 20th century, its origins could not have been more humble. Founded in 1933, Hang Seng started out as a money changing booth in Hong Kong's Wing Lok Street, in the city's Sheung Wan district. The company, Hang Seng Ngan Ho, was profitable from the start, posting earnings of more than HK$10,000 its first year.
Hang Seng proved true to its name, which means "ever-growing" in Chinese, and soon developed a wider range of banking services, especially after the Chinese Revolution and Hong Kong's separation from the Communist-controlled mainland. By 1952, the company reincorporated, taking on the status of a private limited company (plc), and launching its commercial banking operation. Hong Kong, which became a major destination for China's wealthy expatriates, emerged as one of the Asian region's primary banking centers and banks such as Hang Seng grew quickly servicing the city-state's fast growing economy. By the late 1950s, the bank had come under the control of some of the island's most prominent businessmen.
Hang Seng went public in 1960, although not yet on the Hong Kong Stock Exchange, and ranked among the largest Chinese banks in Hong Kong. In 1965, it caught the attention of the large Hong Kong and Shanghai Banking Corporation. Later known as HSBC, that group had been founded in 1865 by Thomas Sutherland, from Scotland, who launched a banking partnership in order to finance trade between the United Kingdom and Shanghai. Through the first half of the 20th century, HSBC created a banking empire that extended throughout much of mainland China, Southeast Asia, and the Middle East, with offices in London as well. Following the Communist takeover of China, HSBC was forced from the mainland and refocused its operations on its U.K. and Hong Kong branches.
When Hang Seng bank suffered a run on its deposits in 1965, HSBC came to the rescue, buying up a 51 percent share in Hang Seng, the equivalent of £200 million at the time. HSBC later raised its stake in the company to more than 62 percent. By the beginning of the new century, HSBC's initial investment in the bank had been multiplied by more than 50.
Hang Seng introduced seven-year home mortgages in 1967; by the end of the decade, the bank confirmed its status as a major Hong Kong bank with the launch of the Hang Seng Index, which became the Hong Kong Stock Exchange's primary market indicator, tracking the shares of the colony's top 33 firms--including Hang Seng itself, which joined the Hong Kong Stock Exchange in 1972. The bank's initial public offering valued Hang Seng at HK$2.8 billion.
Hang Seng earned a reputation as a cautious lender, helping it build a solid foundation for itself through the 1980s. The bank also expanded strongly in the consumer retail market, particularly after it was granted the franchise for Hong Kong's Mass Transit Railway system. The company began opening new branches in the city's train stations. By the end of the 1980s, the company boasted some 150 branches in Hong Kong alone.
Mainland Aspirations for the New Century
The 1984 agreement reached between the British and Chinese governments, restoring China's control over Hong Kong, led Hang Seng to make a first, if tentative, approach to establishing operations on the mainland. In 1985, the bank opened its first representative office outside of Hong Kong in the newly created Shenzhen free trade zone. It was not until 1995, however, that Hang Seng opened its first official branch office in mainland China, extending the group's operations into Guangzhou. Two years later, after Hong Kong was reunited with the mainland, Hang Seng opened its second mainland branch, this time in Shanghai.
While Hong Kong was renewing its relationship with the Chinese mainland in the late 1990s, Hang Seng's relationship with HSBC was also strengthened. This was particularly true after the appointment of two officials from Hongkong & Shanghai Banking Corporation, the main HSBC arm in Hong Kong, to corresponding positions with Hang Seng. In 1997, Hongkong Bank's chief executive, David Eldon, was appointed chairman of Hang Seng. The following year, after Hang Seng CEO Alexander Au left the bank to take up a similar position at Standard Chartered, a major HSBC rival in the Asian region, the company named Vincent Cheng, executive director at Hongkong Bank, as the new Hang Seng CEO.
The move raised questions as to Hang Seng's future status amid a difficult economic climate, brought on by the financial crisis that swept through most of Asia in the late 1990s. At the
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