Rising rents see banks reluctant to offer safe deposit boxes

People looking to securely store their favourite family heirloom or marriage certificate are finding it increasingly hard to rent safe deposit boxes in the city as the rising cost of real estate makes banks reluctant to expand the service.

A banker, who declined to be named, said banks did not want to install more safe deposit boxes as it was not a profitable business.

"The rent in Hong Kong is so high that bank branch areas are very valuable," the banker said. "Deposit boxes take up a lot of space, so this is a type of business that is considered a customer service rather than an important income source."

That leaves more people without a place to store their valuables such as jewellery, share certificates and legal papers.

"My mother has told me not to give up my safe deposit box as I may not be able to rent it again," said Philip Tsai, a partner of accounting firm Deloitte, who has a safe deposit box in a Citi Ka Wah bank branch in Sheung Wan.

Tsai pays an annual rent of HK$600 for the box.

"I like my deposit safe box as it is close to my office in the business district," he said.

"Many friends also have warned me not to give it up as I would unlikely be able to get another one."

Tsai said some people had been waiting for years for a box and could expect to wait much longer as few people were willing to give up their boxes and many new bank branches did not have safe deposit box services.

One financial services sector worker said she wanted to find a safety deposit box in Hong Kong but could not find any banks with available units.

"My family in the US can easily rent a safe deposit box. But in Hong Kong, I found it very difficult to find any banks that can rent me a box, which is frustrating," she said.

The Hong Kong Monetary Authority does not have official statistics on the number of safe deposit boxes in the city.

"The HKMA always encourages banks to consider the public need for banking services while operating on commercial principles," the de facto central bank's spokeswoman said.

The South China Morning Post surveyed a number of banks and found renting a safe deposit box in popular locations such as Central, Causeway Bay or Tsim Sha Tsui is almost impossible. But banks in the New Territories had units available.

In terms of size, shoebox sizes are least popular, while larger ones that can hold documents are most in demand.

Simon Lau, a general manager and head of personal banking at the Bank of East Asia, said the bank had seen increasing demand for safety deposit boxes during the past few years.

The bank started offering a safe deposit box service to customers in 1935, when its head office building was officially opened. The bank now has about 140,000 safe deposit boxes in 50 of its 158 branches. Rental varies, from as low as HK$250 to as high as HK$12,500 a year, depending on the size and location of the box.

"Owing to their location, some branches receive more requests for safe deposit box service than others. In the event that there aren't any boxes available, customers are placed on a waiting list," Lau said.

"Alternatively, if a safe deposit box is available at another branch, the customer may choose to rent it."

Customers usually like to rent a box close to their home or office so Central, Sheung Wan, Causeway Bay and Tsim Sha Tsui are in high demand, while banks in the New Territories usually have vacancies.

Standard Chartered has been providing a safe deposit box service for more than 50 years and has more than 23,000 boxes.

The utilisation rate is about 70 per cent.

The annual rent varies from HK$350 to HK$5,000, depending on the size of the box.

Bank of Communications has 23 branches with 42,000 boxes.

Citibank has 3,000 safe deposit boxes in three branches in Central and Tsim Sha Tsui. The occupancy is about 80 per cent. Again, the bank found that there is more demand for the large size and extra-size safe deposit boxes than for smaller ones.

Hang Seng Bank has about 30 branches offering safe deposit box services. Annual rent ranges from HK$440 to HK$12,000, subject to the location and size of the boxes.