Banking & Finance

Mainland banks establish Hong Kong lobby group for greater say in banking and financial policy

PUBLISHED : Monday, 27 June, 2016, 11:24pm
UPDATED : Monday, 27 June, 2016, 11:24pm

Thirty-two mainland banks with a presence in Hong Kong have banded together to form the Chinese Banking Association of Hong Kong, an industry group that will spearhead banking policies and seek to create opportunities related to China’s 13th five-year plan and One Belt One Road objectives.

The move is an effort by mainland banks to assert themselves into an effective lobby group to steer Hong Kong banking and financial policy developments.

The new body won the backing of the Hong Kong and Macao Affairs Office of the State Council and the Hong Kong government whose officials turned out in force to support the association’s inauguration.

Chief Executive Leung Chun-ying expressed his support towards the Chinese banks.

“In recent years, there have been more mainland banks coming to Hong Kong to develop their businesses. They have helped expand the scale of Hong Kong’s banking industry and also consolidate and raise Hong Kong’s position as an international financial centre,” Leung said.

“Hong Kong has its key advantage in the One Country, Two System policy. Against other global hubs, we have our mainland advantage. Against mainland hubs, we have our advantage in Two Systems.”

Leung said he hoped the mainland banks would help bring in more businesses to spur Hong Kong’s lead as a global yuan trading hub and as a destination for mainland corporates to set up corporate treasury centres, following the Legislative Council’s targeted tax cuts last month.

Among the membership are 20 full-fledged branches of mainland banks, and a handful of joint-stock banks which operate in Hong Kong as restricted license banks or deposit-taking institutions, and seven representative offices who previously would not qualify for a seat on the table in the consultative workgroups at the Hong Kong Association of Banks, according to Ronick Chan Chun-ying, board secretary at BOCHK and vice chairman of the new association.

The association will help amend the under-representation of mainland banks in local banking bodies and extend influence commensurate with their ascendency in local league table standings given rapid balance sheet expansion in recent years.

Chan said the Chinese banks will be fixed fee-paying members, however he declined to release figures on the annual budget or staff resources in the body. The funds will go to support the body’s policy research, industry knowledge sharing, corporate social responsibilities and industry risk management objectives.

The association also plans to recruit European and US banks as honourary members to participate in the association’s business development-focused activities, Chan said.

HSBC Asia-Pacific Chief Executive Peter Wong, Bank of East Asia Chairman David Li, and Standard Chartered Greater China and North Asia Regional Chief Benjamin Hung are among representatives of non-mainland banks participation in the body. The association has also recruited financial services representatives of the Legislative Council for its advisory panel.