There were only a handful of mergers and acquisitions in the local banking industry last year, but they gave strong clues about what is likely to happen in future.
The most significant development occurred before Christmas when Dah Sing Bank announced its purchase for 694 million yuan of a 17 per cent stake in Chongqing Commercial Bank, one of the mainland city banks. Dah Sing became the first of Hong Kong's medium-sized banks to venture into China - and it will not be the last.
'More banks will negotiate with mainland lenders [on equity investment],' said Peter Wong Tung-shun, the outgoing chairman of the Hong Kong Association of Banks.
Ryan Tsang Yee-king, a credit analyst at Standard & Poor's Ratings Services, said the fact Hong Kong was a mature banking market and that lenders had to look for new income streams meant the 'go to China' story would continue.
However, there is still a 'go to Hong Kong' story.
Last year, China Construction Bank, one of the big four state-controlled banks, made its first acquisition abroad, buying Hong Kong-based Bank of America (Asia) for HK$9.71 billion. Mr Wong said he expected more such moves as mainland banks prepared to extend their reach beyond China.
