China Merchants Bank's acquisition of Wing Lung Bank to realise its strategic goals of enhancing its competitiveness in the domestic market and gaining an international presence could bear fruit in three years, according to Wing Lung's new chief executive, Zhu Qi. Merchants Bank, the sixth-largest lender on the mainland, completed recently its acquisition of the controlling stake in Wing Lung, a 75-year-old family-run lender in Hong Kong, and is in the process of buying the rest of the bank. Analysts have expressed concern that the return on the acquisition would be modest owing to the high price: at 3.1 times Wing Lung's book value at the end of the first quarter. But Mr Zhu said: 'The synergy does not only rely on Wing Lung's earnings. There are invisible benefits.' He said the acquisition could enhance Merchants Bank's competitiveness by providing a greater customer base and widening product coverage, and allow the mainland lender to use Hong Kong as a gateway to expand internationally. Mr Zhu said Merchants Bank had appointed Boston Consulting Group to study how both lenders could integrate successfully and create synergies by co-operating in the Hong Kong and mainland markets. When asked whether Wing Lung would expand further through acquisition, he said the main focus for the Hong Kong lender would be organic growth under a new business model by leveraging on co-operation with Merchants Bank. 'We don't rule [expansion] out if opportunities arise in the future,' Mr Zhu said. He expected Wing Lung's earnings to improve greatly in three years. He said the bank's business was mainly in Hong Kong, but it could provide more services to its customers by leveraging on the strength of its parent on the mainland. He said Wing Lung would expand its wealth management business further, such as by serving high-net-worth mainland clients referred by its parent. Mr Zhu acknowledged that the wealth management business in Hong Kong would change significantly following the losses suffered by investors from complex investment instruments such as 'accumulators' or 'minibonds'. He said Wing Lung could find its niche by providing simple products to customers. Mr Zhu worked for Industrial and Commercial Bank of China, the largest lender on the mainland, for 22 years until July. Before joining Merchants Bank, he was chief executive of ICBC (Asia), ICBC's Hong Kong-listed arm. He has been working in the city for more than 14 years. He said he joined Merchants Bank to take up a new challenge. 'My goal is to put the 75-year-old local lender with a vigorous mainland bank and turn it into one of the most competitive banks in Hong Kong,' he said. When he worked for ICBC (Asia), the bank grew more than 300 per cent in assets and profit from 2001 to 2007. 'I hope it can happen in Wing Lung too,' he said.