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SCMP Reporter

HAVING joined up with a powerful China partner, First Pacific Bank took its first steps into the mainland market by opening a representative office in Shenzhen yesterday.

  Ambitious to build up an extensive network in the coastal cities, the medium-sized Hong Kong bank will begin by concentrating on trade finance, and then mortgage loans.

  It has found the China market much more accessible since teaming up with two state-owned firms of the Ministry of Foreign Trade and Economic Co-operation, which took a 33.75 per cent stake in the bank in May last year.

  The two state firms are China Trust and Investment Corp for Foreign Economic Relations and Trade and the China National Metals and Minerals Import and Export Corp.

  ''There are completely legitimate ways to enter the China market which can greatly expedite the long application process,'' said James Ng, managing director of First Pacific Bank.

  Shenzhen, as a natural extension of banking services in Hong Kong, has attracted 24 foreign financial institutions.

  Among them, 21 are bank branches, one joint-venture bank, one insurance company and one joint-venture financial investment company.

   There are about 18 representative offices throughout the city.

  The range of activities in which the institutions are engaged has also been steadily on the rise.

   According to the People's Bank of China in Shenzhen, total assets held by foreign institutions reached US$3.5 billion, total deposits amounted to $1.2 billion, and total loans were $2.3 billion.

  In Hong Kong, First Pacific Bank's residential mortgages and property-related loans made up 54 per cent of its loan portfolio last year, above the 40 per cent recommended by the Monetary Authority.

  ''That is why we have placed more efforts into tax loans, personal loans and more trade finance,'' Mr Ng said.

  Consistent with other mortgage lenders, the bank has curbed mortgages, especially for luxury flats, and focused on small and medium-sized units.

  ''We will keep to the 15 per cent property-related loan growth as suggested by the Monetary Authority,'' Mr Ng said.

  The Hong Kong Monetary Authority recently cautioned banks over their property lending, requesting they cap its growth in line with the territory's nominal gross domestic product growth.



First Pacific Bank enters market with office in Shenzhen