Opportunities for Hong Kong banks in Greater Bay project
Brian Li Man-bun, deputy chief executive at the Bank of East Asia, says Hong Kong’s depth in its capital markets would be an advantage when it comes to funding firms in the proposed technology hub
Hong Kong banks should leverage opportunities in meeting fundraising needs in the “Greater Bay Area” as Beijing pushes forward a plan for deeper economic integration with the city, according to Brian Li Man-bun, deputy chief executive at Bank of East Asia and a member of the national committee of the Chinese People’s Political Consultative Conference, the country’s top political advisory body.
The Greater Bay Area refers to the Chinese government’s scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub.
The Greater Bay Area concept has been championed by Premier Li Keqiang and involves creating a world-class technology hub based on increased cooperation in the region.
Li, who spoke to reporters during the “two sessions”, China’s most important annual political meetings, believes Hong Kong’s depth in its capital markets would be an advantage when it comes to tapping the borrowing needs of firms operating in the proposed hub, which aims to attract entrepreneurs and start-ups.
“But there are a number of issues to be addressed,” said Li, who has proposed suggestions to the committee on the Greater Bay Area, adding that better flexibility on cross border fund flow and free movement of labour would be a prerequisite.
Tencent Holdings chief executive Pony Ma Huateng said that there were differences in taxation systems and recruitment rules between Hong Kong and the mainland that need to be reviewed and changes to these regulations would be “complicated”.
Ma, who is a deputy of the National People’s Congress, has proposed electronic identification for residents in the proposed Greater Bay Area and that residents of Hong Kong and Macau should be able to link their mainland travel permits to a mobile phone to enable mobile payments.
Li said BEA would focus on growing consumer loans via online platforms in China, which accounts for a larger proportion of the bank’s assets and revenues than it does for any other lender based outside the mainland, and losses on bad loans there forced the bank to take a conservative approach to growth in recent years.
BEA has already collaborated with WeBank, whose major shareholder is internet giant Tencent and Ctrip, one of China’s biggest travel agencies.
The size of China’s consumer finance industry was estimated to be worth 107.72 billion yuan (US$16.9 billion) in 2016, more than double the size in 2015, according to a report by Kapron Asia.
“We are at the beginning [of growing consumer loans],” said Li. “I guess there’ll setbacks and we are trying things out. But we are determined [to make it work].”
Separately, Li also said the bank, which has a joint venture with Germany’s Union Investment Group will be marketing a second mutual fund in China.