American Express Bank has launched its first mutual funds in Hong Kong, spearheading its drive to promote consumer financial products in the territory. The launch of the four funds yesterday signifies a change in strategy for the bank. It will see increasing integration with other entities in the same group, American Express Co. Apart from the bank, the group's other primary subsidiaries are American Express Travel Related Services, which features card products, and American Express Financial Advisers (AEFA), the asset management arm. The Epic funds, managed by AEFA, were first introduced to the bank's private banking clients. Hong Kong is the first Asian market to have the funds available to retail customers. With a lower minimum entry of US$2,500, inclusive of the 3 per cent front-end load, the five-branch bank hopes to tap retail customers by direct mail, telephone, fax and computer modems. Its card customer base will be the natural targeting group. At present, the bank's consumer financial services in Hong Kong provide tax loans, revolving credit and instalment loans. 'Our clients are generally affluent individuals, many drawn from our cardmember base,' John Ward, chairman and chief executive of the bank, said. The emphasis placed on consumer financial services reflects a deliberate strategy to increase the group's international revenues. About one third of the group's earnings come from AEFA. The group aims to generate half of the remaining earnings from overseas, compared with 12 per cent now. 'The opportunity is in the Pacific area and the Indian sub-continent,' Mr Ward said. But the strategy is not to build up a vast branch network. 'We are not here to build bricks and mortars. We will deal with our clients electronically,' he said. The bank has designated five areas for implementing direct banking channels - Germany, Singapore, Hong Kong, Taiwan and France. Within the bank itself, commercial and correspondence banking contributes the most income. 'But consumer financial services and private banking will take a greater leap as there is closer integration between the bank and AEFA,' Mr Ward said.