Big bank battle is on the cards
The city's five largest lenders are fighting to keep their customers as outsiders take them on in areas like credit cards and mortgages
Hong Kong's retail banking market has become a ferocious battlefield between the local Big Five, who enjoy a long history and a strong customer base, and relative newcomers, including those from the mainland.
Credit card and mortgage services are already the two main areas these rival banks compete in, but industry watchers warn that profits will not come easily. Retail banking faces high costs for every effort from branch expansion to marketing and advertising in Hong Kong, one of the world's most expensive cities.
Hong Kong's Big Five are HSBC, Standard Chartered, Bank of China (Hong Kong), Hang Seng Bank and Bank of East Asia (BEA). Both HSBC and Standard Chartered have their headquarters in London, but each has a long history in Hong Kong, making some of their customers feel like they are more like local banks.
In comparison, relative newcomers have rapidly expanded in the city in recent years by promoting their banking business aggressively, such as credit card and mortgage promotion. They include Singapore's DBS, the American bank Citi and Australia's ANZ. Some mainland banks, including China Construction Bank, one of the Big Four state lenders, have also shown their ambitions in the credit card business in Hong Kong, targeting a fast-growing number of mainlanders working and studying in Hong Kong.
Miranda Kwok, the chief executive and president of China Construction Bank (Asia) in Hong Kong, said her bank aimed at a long-term improvement in market share, rather than short-term revenue growth. With China Construction Bank as the parent company, the Hong Kong subsidiary could offer more competitive rates on deposits and loans.
"We are keen to build our customer base and penetration," Kwok said, adding that the Chinese connection also made the bank more capable in yuan business.