Chong Hing Bank, a Hong Kong family-owned small lender, says it is not up for sale, hoping to deflate growing speculation the bank will be the next takeover target after Wing Lung Bank. Frederick Chan Hoi-kit, the bank's general manager for operations division, said the lender still had a niche as a community bank and expected to meet the goal of at least 10 per cent return on equity by next year. It is widely believed that Industrial and Commercial Bank of China, the largest in the country, will win in its bid for the 53 per cent stake in Wing Lung Bank that has been put up for sale. Chong Hing Bank's 'top management told us that they haven't considered putting the bank up for sale', Mr Chan said. He believed small lenders like Chong Hing still had room for growth as big lenders might not be keen to provide certain services as returns were not appealing. The bank is positioning itself as a community lender and has opened 13 branches in past two years mainly in mass housing estates. It plans to open at least three more banches this year, bringing its network to 50 outlets. Mr Chan said the bank had started to benefit from the widened customer base and cross-selling. He added the bank also offered the market's best pricing to maintain its competitiveness. The bank's securities business grew in the first quarter despite the volatile stock market. Mr Chan said the bank had aggressively made provisions-structured investment vehicles and was unlikely to do more unless the capital market worsened. Hit by the subprime mortgage crisis in the United States, Chong Hing Bank unveiled HK$369.63 million of provisions for structured investment vehicles in March, representing 65 per cent of its total SIVs investment of HK$568.21 million. Mr Chan said Hong Kong's low interest rate environment and low loan demand were the reasons that prompted the bank a few years ago to seek higher returns from such investments. The bank had no need to rely on investment income to boost its earnings this year, as the widening credit spread and a decline in lending capability at some foreign banks had created more opportunities in the corporate loan business, he said. Mr Chan expected the bank to also benefit from its expanded retail operations, including its mortgage, personal loans and credit card businesses. The community bank hopes its retail and corporate lending will respectively account for 30 per cent and 70 per cent of total lending by 2010, from 25 per cent and 75 per cent last year. He said the bank was confident of achieving its target of a double-digit return for shareholders next year from 8.05 per cent last year.