HSBC, BOCHK and Hang Seng Bank still dominate banking in Hong Kong

Mainland banks are scrambling for market share in Hong Kong, but accounting firm KPMG says it will continue to be dominated by the Big Three - HSBC, Bank of China (Hong Kong) and Hang Seng Bank.

Even though six of the top 10 subsidiaries of mainland banks in the city have seen double-digit growth rates, they are still losing market share in terms of deposits and assets to the larger players because of the rapid growth in those markets, the results of a KPMG survey published yesterday said.

That market dominance was unlikely to change even if Chong Hing and Wing Hang, which have been in talks about possible takeovers, were acquired by big mainland or regional banks, the firm said.

There are rumours that one of the mainland's Big Four banks, Agricultural Bank of China, could be a potential buyer as it looks to expand in the city, along with China Minsheng Banking Corp and Australia's ANZ.

"Chinese banks always have the ambition to go international. Hong Kong is always a great place for them," said Paul McSheaffrey, a partner at KPMG's China financial services, adding that regional banks were also keen to establish a footprint in the city. "Demand [for mergers and acquisitions] is always there."