Banks are expanding again after nearly seven years of cost cutting, which included the closure of hundreds of branches, following the Asian financial crisis. The severe reduction of staff and branch numbers since 1997 - partly a response to the economic downturn and partly a result of efforts by some banks to redirect their focus away from the retail market - has seen Hong Kong moving slowly away from being one of the most over-banked cities in the world. Still, the present ratio of one branch for every 3,000 or so citizens is one of the highest globally. However, since the start of this year, bank executives have been announcing plans to expand their branch presence and many of these plans are beginning to materialise. One of the most aggressive players is Citibank, which has opened three Citigold wealth management centres and three branches for its lending arm, CitiFinancial. A spokeswoman said the bank planned to open two more wealth management centres and a further seven CitiFinancial branches by the end of this year. Hang Seng Bank, one of the two lenders with licences to operate inside MTR stations, last month added loan centres in four stations - Tsim Sha Tsui, Causeway Bay, Jordan and Kowloon Tong. Some lenders have laid out longer-term plans. An ICBC (Asia) spokesman earlier said the bank, which last year acquired the Hong Kong operation of Fortis Bank, would raise the number of its branches from 42 to 70 within the next five to 10 years, on its way to becoming the city's fifth-largest bank from sixth. With the number of large property transactions involving banks on the rise recently, their expansion plans could also have a significant impact on the commercial property market. A newspaper yesterday reported that Standard Chartered Bank, which completed its Hong Kong incorporation earlier this year, had spent more than $198.8 million on buying four ground-level properties during the past two months. The report also quoted sources as saying that the bank had set aside $2 billion for buying new properties. A spokeswoman for the banking group declined to comment on the report. The Bank of East Asia has also spent $26 million on a property in Shau Kei Wan. Liu Chong Hing Bank executive director Felton Lau Wai-man said Standard Chartered's move was a sign of the bank's confidence in the property market. 'It is quite normal for domestically owned banks such us ourselves to own the properties where the branches are,' he said. 'But for an international bank like Standard Chartered, it is a bit unusual.' Liu Chong Hing was also set to open a branch this month, Mr Lau added.
