Hang Seng Bank has no plans to scale back activities in Hong Kong, even after returning a big chunk of excess capital to shareholders, according to vice-chairman and chief executive Vincent Cheng Hoi-chuen. Mr Cheng said the bank still had enough capital to support expansion after distributing $7.83 billion in special dividends. The bank said on Monday shareholders would receive $4.10 in a special interim dividend for every share held. The pay-out will reduce the bank's capital-adequacy ratio - the level of capital to back its assets - to 18.8 per cent from 22.7 per cent and hence its capacity to write new loans. The move was interpreted by investors as an indication the bank was pessimistic about Hong Kong's future. But Mr Cheng denied this. 'When we need only $18.8 to do business, we shouldn't ask shareholders to pay $22.7,' he said. 'Our 'managing for value' strategy means we need to use the smallest amount of capital to achieve the highest possible level of return.' The bank had earlier defined this as doubling shareholders' value in five years. 'At times when the economy is still testing its bottom, banks are preserving their capital positions to prepare for any downside,' Mr Cheng said. 'Our move to distribute the excess capital should, on the contrary, indicate our confidence that the economy will pick up,' he said.