But as the bank marks its 90th anniversary today, he is hopeful that this year would deliver growth.

'I think as far as my banking career is concerned, [2008] was the worst year ever,' Mr Li said. 'I think it has been a very bad year for us; I hope the worst is behind us.'

The bank was forced to issue its first-ever profit warning in its 90-year history last October after writing off a substantial amount of collateralised debt obligations (CDOs), a direct result of the financial crisis.

On September 18, the bank discovered an act of fraud by a trader that led it to revise down its first-half profit to HK$785 million from HK$894 million.

The chain of events heightened market speculation over the adequacy of the bank's internal controls and worse than expected operational risks that eventually triggered a run on the bank on September 24. Customers were calmed by assurances from the Hong Kong Monetary Authority.

While financial stocks across the globe tumbled, BEA has since been out of the public eye, but Mr Li warned that the first half of this year was expected to be difficult, with improvement likely only in the second half.

'I hope we have positive growth in 2009 and onwards,' he said, hopeful that the bank's return on equity would return to double digits in one to two years' time. The return on equity fell to 5.4 per cent in the first half of last year, dragged down by massive write-downs of troubled securities, compared with 13.8 per cent a year earlier.

Mr Li stressed that the bank's mainland operations would be its 'major driver', even though the world's fourth-largest economy is facing its slowest growth in three decades. 'When you look at growth in China, it is faster than any other developed or developing countries.'

During the next three years, for which the bank's board of directors have requested that he stay on to lead the bank despite a retirement plan in the pipeline, Mr Li - who will turn 70 this year - said he would focus on ensuring a smooth succession.

'I have given a lot of thought over the holiday to how we should position ourselves; how we should restructure the bank for better growth during this difficult, challenging period,' he said. 'Subject to the board's approval, I will be rolling out a new plan in the first few months of the year.'

Mr Li joined BEA in 1969. He became its chief executive in 1981 and was made chairman in 1997.

He said the bank would promote younger people to positions of authority and responsibility and groom internal talent to become the next generation of managers.

However, he declined to disclose whether his two sons, Adrian Li Man-kiu and Brian Li Man-bun, the bank's heads of corporate banking and wealth management, respectively, were among the candidates.

Despite a series of setbacks for BEA last year and the uncertain economic climate, Mr Li stressed his continued optimism.

In October last year, he said the written-off CDOs represented less than 1 per cent of the bank's total assets.

Analysts believe BEA may have already seen the worst.

China Construction Bank International analyst Bonnie Lai said BEA's disposal of its CDO portfolio would remove a key overhang that depressed the stock's value last year, allowing for a clean-up of the bank's balance sheet.

'While bad loans may be on the rise, the impact to the bottom line won't be as harmful as the toxic securities,' she said.

Other analysts said BEA's strong growth on the mainland was important to its future expansion. While the lender is smaller than international rivals such as HSBC Holdings, it has moved quickly to make inroads.

BEA was one of the first overseas banks to incorporate on the mainland, in 2007, and the first to issue yuan-denominated credit cards on the mainland. It has 71 mainland branches.

In contrast, HSBC has 79 branches on the mainland, while Standard Chartered has 50.

BEA's mainland pre-tax profit accounted for 26.6 per cent of the total at the end of June lsat year - excluding CDO, equity and structured investment vehicle losses.

Bank of China International analyst William Wong said BEA made the right move by expanding on the mainland to boost its long-term growth, but there was a risk as the mainland economy headed towards a slowdown.

'With mainland gross domestic product slowing, as widely expected, and following a few rounds of interest rate cuts, we expect near-term profit growth for BEA China to moderate, in line with other mainland banks,' Mr Wong said.

He attributed the bank's rapid mainland expansion to the cordial relationship Mr Li and his family have with the mainland authorities.

The relationship dates back to late 1985, when Mr Li, as a Hong Kong banking representative, helped the Hong Kong government lobby State Council-backed China International Trust and Investment Corp (Citic) to take over troubled Ka Wah Bank.

According to the book The Li Dynasty: Hong Kong Aristocrats written by local commentator Frank Ching, Mr Li and then-secretary for monetary affairs David Nendick went to Beijing in early January 1986. Mr Li helped draft the original letter of intent while Mr Nendick negotiated with then Citic chairman Rong Yiren and other officials.

Beyond its mainland expansion, BEA has also acquired assets that have helped bolster its overall expansion.

In 2000, it acquired FPB Bank Holding, which ran First Pacific Bank, for HK$4.36 billion. The purchase followed its HK$1.2 billion takeover of United Chinese Bank in 1995 and Blue Cross (Asia-Pacific) Insurance in 1991.

'Continuing to build upon its name recognition and expansion of network coverage should play well for the bank's future growth,' Mr Wong said.

The bank, with almost HK$400 billion in assets, has an international network of more than 230 outlets and employs more than 10,900 people. Its business covers commercial banking, asset management, private banking, insurance and corporate and investor services.

BEA was founded by Mr Li's grandfather Li Koon-chun, his brother Li Tse-fong, Kan Tong-po and six other businessmen in November 1918, four years after the first world war, with a staff of 20 and initial capital of HK$2 million. Operations commenced on January 4, 1919.

The bank grew as Hong Kong emerged as an international financial centre. Along the way, it has witnessed the second world war, bank runs in the 1960s, social unrest in 1967, the stock market crashes of 1973, 1987 and 1998, the Sars outbreak and the current global financial crisis.

As much as the bank stresses optimism for its prospects as it celebrates its 90th anniversary, the sting of 2008 will not easily heal, least of all because its stock fell to a six-year low of HK$13.38 on the day of its profit warning.

For the whole of last year, the stock dropped more than 69 per cent to close at HK$16.20 on December 31. At their peak in June 2007, the shares traded at HK$58.15 each.