In Hong Kong, we build a global business empire

Although Hong Kong's mobile phone business has not yet been officially commercialized and is still under construction and testing, as the owner of the Hong Kong Telephone Company, he has naturally already utilized the resources.

Therefore, the heads of major groups and companies under Lin Haoran, such as Ma Shimin of Hong Kong Land Group, Chen Shoulin of Hong Kong Electric Group, Burton of Wan Qing Group, Cui Zilong of Oriental Press Company, etc., all have a mobile phone in their hands.

It only took Lin Haoran a dozen minutes to contact several of his important subordinates.

Although it is the evening rest time, everyone will give the boss face and it is impossible for them to refuse to come.

About half an hour later, everyone arrived at the headquarters building of Bank of East Asia and came to a conference room.

"Everyone, excuse me for coming here. There is a very important matter that requires your advice. Please put your heads together and I hope you can give me a solution to this problem!" Lin Haoran said directly after everyone had taken their seats.

Suddenly, everyone concentrated and waited for the boss's question.

"Mr. Dashan, please tell everyone about the problem." Lin Haoran looked at Dashan and said.

"Okay, boss, it's like this..." Dashan stood up and told the Bank of East Asia in detail about the current problems it was facing.

As the construction of Bank of East Asia's new branches has not yet been completed and the number of outlets is limited, how to use existing resources to speed up the absorption of cash from potential depositors has become a difficult problem that Bank of East Asia is facing today.

After hearing this, everyone suddenly became quiet and began to think.

The conference room fell into a brief silence, with only the low hum of the air conditioner as the sound.

The question raised by Dashan is actually not complicated, that is, how to maximize the absorption of the surging tide of deposits under the limitation of insufficient outlets?

Ma Shimin was the first to break the silence. He tapped the table with his fingers and said, "Boss, branch building is hard work and cannot be rushed, but the core of attracting deposits is 'convenience' and 'trust'.

The biggest problem currently faced by Bank of East Asia and its customers is that Bank of East Asia is too busy and customers have to queue for a long time.

So my suggestion is to start a 'mobile banking service'. We can urgently modify a batch of large buses, equip them with basic security, money counting equipment and communication systems, and form a 'mobile banking fleet'.

These fleets will be deployed to densely populated areas but far from existing outlets, such as the entrances of large housing estates, industrial areas, and even near busy markets, so that customers can handle deposit business at their doorsteps or on their way to work!
This will not only greatly alleviate the pressure on existing outlets, but also cover areas that our outlets have not yet reached, and proactively deliver services to potential customers.”

Cui Zilong's eyes lit up, and he immediately added: "I think Mr. Ma's idea is very good. The key to mobile banking lies in efficiency and coverage, but it should be noted that safety is also an issue that needs to be paid attention to. We can dispatch the elite security forces of Huanyu Security Company to provide armed escort and protection throughout the process to ensure the safety of cash and sales staff and prevent some desperate criminals from targeting these mobile banks."

Lin Haoran also nodded. Mobile banking is indeed a solution. At present, the headquarters of Bank of East Asia has recruited a number of bank clerks for use in the newly built branches. These clerks were previously clerks in other banks, especially Huifeng Bank, so they are very skilled in their business.

However, just when everyone thought this method was good, Hong Kong Electric Group President Chen Shoulin put forward a different opinion.

"Boss, everyone, in my opinion, although the method proposed by Mr. Ma seems feasible, I don't think it is the best way!"

"Oh? Mr. Chen, tell me, do you have any better idea?" Lin Haoran looked at the sixty-year-old head of the Hong Kong Electric Group in front of him and smiled curiously.

Others also set their sights on Chen Shoulin.

"'Mobile banking' is indeed a very innovative measure that can quickly alleviate the problems of insufficient number of branches and long queues at counters.

However, as Mr. Cui worried, there are major security risks. As far as I know, a serious robbery occurred at the North Point Branch of Wing On Bank on the 4th of last month.

In broad daylight, two armed gangsters openly controlled the escort team that was carrying out a cash escort mission outside the North Point branch of Wing On Bank and successfully stole more than one million Hong Kong dollars in cash.

Although the robbers were brought to justice in the end, this incident is enough to illustrate that the exposure of large amounts of cash can easily make criminals take risks.

Moreover, compared with regular bank branches, mobile banks face greater temptations. After all, regular branches are equipped with complete protective facilities such as bulletproof glass, while mobile banks obviously have more weak links in security protection.

So I think that there are great risks in using mobile banking. Even if there are elite security personnel from Huanyu Security Company to escort you throughout the process, it is difficult to ensure that there will be no mistakes. "Chen Shoulin said slowly.

After these words were spoken, everyone present nodded.

Indeed, this so-called mobile bank is definitely very risky, and it is outside. Even if there are people protecting it, it cannot stop the desires of those criminals.

"In addition, judging from the current financial market situation, the Bank of East Asia's strategy of raising deposit interest rates is bound to have a significant impact on the entire Hong Kong financial industry.

This strategy is very likely to cause many small and medium-sized banks to fall into the predicament of broken capital chain and even face the crisis of bankruptcy.

In this case, why doesn't Bank of East Asia seize this excellent opportunity to acquire some banks at a lower cost that were originally in good operating condition and had excellent qualifications but were in trouble due to deposit interest pressure?
In this way, Bank of East Asia can not only expand its business halls at the fastest speed, but also attract a group of experienced and professional financial industry talents, while also effectively solving the business expansion problems it currently faces, which can be said to kill two birds with one stone. "

Chen Shoulin expressed his thoughts in one breath.

Mergers and acquisitions of some high-quality banks?

Lin Haoran couldn't help but fall into deep thought.

Acquiring a company is something he is very familiar with.

In the past two years, he has lost count of how many companies he has acquired.

But if you think about it carefully, this is indeed a good idea. If Bank of East Asia wants to add branches now, it will definitely be difficult to do so in a short period of time.

If we don't speed up the absorption of those deposits at this time, the Governor's Office might stop it one day.

There are more than HK$1.1 billion in cash deposits in one day, and this is due to insufficient branches. Once the number of branches increases, how much cash can be absorbed?

Time waits for me!
Thinking of this, Lin Haoran had already made a decision in his heart.

At this moment, Dashan, the interim president of Bank of East Asia, also said, “Boss, I think Mr. Chen’s idea is very feasible.

We currently have six branches whose locations have been determined and are under construction. It will take at least twenty days for these six branches to be put into use.

But if we acquire other banks, we will be able to own multiple branches in the shortest time.

With the increasing business volume and market share of Bank of East Asia, I think even if we have 50 to 60 branches or even more, it will be enough. A wide coverage of branches will be a very good improvement to our reputation and strength in Hong Kong.

In addition, those bank owners who are facing a capital chain breakdown will definitely choose to sell to us if we want to acquire them in order to avoid being heavily in debt. And given the current financial industry situation, we can definitely lower the price. This is a great opportunity for us."

Lin Haoran nodded slightly. At first, he had not really considered the acquisition. But now, after Chen Shoulin's reminder, he felt that acquiring other banks would be a shortcut to quickly expand the territory of Bank of East Asia and enhance its strength.

Although the mobile banking solution proposed by Ma Shimin is innovative, it is limited by the current backward level of technology. The performance of computers equipped in bank branches is still insufficient. If mobile banking is put into practice, it can only rely entirely on manual operations. In this way, the probability of errors will inevitably increase greatly.

Once large sums of money flow is involved, even the slightest mistake may trigger a crisis of customer trust, leading to a large number of customer disputes, which is not worth the cost.

In comparison, acquiring banks that originally had good qualifications but are in trouble due to broken capital chains is undoubtedly a safer and more effective approach.

A broken capital chain does not mean that the bank itself is worthless or poorly managed.

On the contrary, some banks have a solid foundation and excellent qualifications, and were originally operating quite well.

They absorb large amounts of funds and lend them out to earn returns.

It is only in the short term that the rate of capital inflow has slowed down due to the increase in deposit interest rates, which has led to a tight capital chain.

If Bank of East Asia can acquire such banks, it will not only be able to quickly make up for its own shortcomings in branch layout, but also absorb the other party's original high-quality customer resources and mature business system.

In this way, the two sides will complement each other's strengths and achieve a synergistic effect where one plus one is greater than two.

"In this case, the merger plan is finalized. Mr. Cui, please immediately arrange personnel to conduct a comprehensive investigation of the list of banks in Hong Kong that have been hit by the bank run and are facing the risk of a broken capital chain. Focus on finding out their operating conditions, asset quality, potential acquisition prices and other information, and make sure everything is complete.

This report must be submitted to the Bank of East Asia as soon as possible. Time is pressing, the sooner the better. However, acquisitions are not blindly seeking more and faster. Quality must be strictly controlled. Banks with poor asset quality and many hidden dangers must not be considered even if the acquisition price is attractive! "Lin Haoran looked at Cui Zilong and said in a firm tone.

After that, he turned his gaze to Dashan and said, "Mr. Dashan, please keep an eye on the news from President Cui. Once a suitable target emerges, Bank of East Asia must take immediate action. You will personally take the lead in forming an M&A negotiation team and quickly carry out the M&A negotiations. You must move forward as quickly as possible!"

It doesn't cost much to acquire these small and medium-sized banks.

Although Bank of East Asia's market share is increasing, it cannot rely solely on corporate finance business; personal business is also an indispensable and important sector.

The acquisition of these high-quality small and medium-sized banks facing difficulties will undoubtedly quickly fill the gaps in Bank of East Asia's personal financial services.

Personal financial services include not only deposit services, but also a series of rich and diverse businesses such as loans, financial management, credit cards, insurance agency, etc.

These businesses play a vital role in expanding the customer base, enhancing customer stickiness and improving the overall profitability of the bank.

Although these small and medium-sized banks may not be large in scale, many of them have been deeply rooted in the local market for a long time, accumulated a large amount of personal customer resources, and formed a mature personal financial service model.

As long as Bank of East Asia can successfully complete the merger and acquisition and do a good job of integration, it can transform these advantageous resources into Bank of East Asia's own development momentum.

In the office of the chairman of the board of directors of Huifeng Bank, his subordinates were reporting the newly calculated data to Shen Bi: "Mr. Boss, today, the 36 branches of Huifeng Bank have lost a total of 5.65 million Hong Kong dollars. Hengsheng Bank has also lost a total of 0.78 million Hong Kong dollars in deposits. The two banks have lost a total of 6.34 million Hong Kong dollars in deposits!"

Shen Bi listened to his subordinates' report, and a gloomy look appeared on his face. He naturally understood that all the lost funds had flowed into the Bank of East Asia.

This means that the market share of their Huifeng Bank and Hengsheng Bank has further decreased, while the market share of Bank of East Asia has further increased.

Originally, they intended to distance themselves from Bank of East Asia by acquiring small and medium-sized banks.

Who would have thought that Bank of East Asia would do the exact opposite and launch a war for deposits with its high deposit interest rate strategy, which not only stabilized its own position but also took a big bite out of the mouths of the two giants.

Shen Bi's fingers tapped unconsciously on the desk, his eyes revealing deep worry and unwillingness.

Huifeng Bank and Hengsheng Bank are indeed large and powerful companies, and they can afford today's losses.

But this is not a matter of one or two days. They can accept the loss of one day, but what about five days, ten days or even longer?

Is he going to watch his market share continue to decrease?
The more Shen Bi thought about it, the more upset he felt. He stood up and paced back and forth in the office, trying to sort out his thoughts and find a solution.

It is actually not difficult to stop the capital outflow from Huifeng Bank. All you need to do is raise the interest rate to the level of Bank of East Asia.

But can Huifeng Bank do this? Absolutely not!

Although the scale of deposits of Huifeng Bank was extremely large last year, reaching as high as HK$1312 billion, nearly half of the funds were time deposits.

In fact, even without taking into account the funds spent on assisting Haifeng Bank, the profit of Haifeng Bank for the whole year last year was less than HK$1 billion.

At that time, the interest rate for a one-year fixed deposit of Huifeng Bank was only 1%, and the interest rate for a five-year fixed deposit was only 2.5%. But once Huifeng Bank raised the interest rate for a five-year fixed deposit to 5%, it would mean paying more than 2.8 or even 5 billion Hong Kong dollars in interest every year, which could result in a loss of tens of billions of Hong Kong dollars in five years!
In other words, Huifeng Bank is doing business at a loss.

Even if Shen Bi wants to do this, the shareholders will not agree.

Increasing it to 3.8% is acceptable, but 5%?

Shen Bi naturally understood this truth. Although raising interest rates could temporarily curb capital outflow and even attract more market share, the more it attracted, the greater the loss would be!

This is tantamount to drinking poison to quench thirst and will drag Huifeng Bank into an abyss from which there is no escape.

Situations like what happened at Huifeng Bank are happening in the chairman's offices of major banks across Hong Kong.

Almost all major banks have lost a lot of cash deposits to varying degrees.

They also want to stop customers from making deposits, but if customers insist on withdrawing cash, they can do nothing about it.

Just like Hengsheng Bank more than a decade ago, it was such a high-quality bank, but due to a bank run, its capital chain was broken, and Huifeng Bank took advantage of the situation and directly controlled the fate of this bank, which was originally the largest Chinese bank.

Today, the storm of high deposit interest rates brought about by the Bank of East Asia has once again plunged Hong Kong's banking industry into a similar crisis vortex, but this time, the Bank of East Asia has become the "catfish" that stirs up the storm.

If the situation continues to develop in this way, many banks are likely to follow the same path as Hengsheng Bank.

Therefore, an atmosphere of panic is already spreading in Hong Kong's financial sector.

On the first day alone, many banks were severely damaged. If this continues for a long time, the consequences will be unimaginable!
At this moment, many bank bosses are full of hatred towards Huifeng Bank.

In their view, if Huifeng Bank had not attempted to reap the benefits of small and medium-sized banks and taken the lead in raising deposit interest rates, triggering this financial storm, they would not have been stuck in such a passive and difficult quagmire today.

Huifeng Bank thus became the "culprit" in everyone's mind and was criticized by thousands of people.

Next, the bank runs in major banks in Hong Kong continued to ferment and showed an increasingly orderly trend.

Many depositors who originally had no plans to make fixed deposits have joined the ranks of cash withdrawals because they are worried that the small and medium-sized banks where they have deposited their money will go bankrupt due to a break in the capital chain.

As a result, the impact on small and medium-sized banks began to become fully apparent on the second day.

The next afternoon, Lin Haoran received a call from Cui Zilong, saying that he had found a very good bank - Daoheng Bank.

This bank has a long history in Hong Kong, with its history dating back to 1921.

Daoheng Bank's predecessor, Daoheng Silver House, was founded in 1921. Initially, it mainly engaged in foreign exchange and money exchange business, and established good business relationships with customers. In the early days, it mainly operated financial business in the Mainland.

In 1948, Dao Heng Bank entered a transition period and turned to focus on Hong Kong's growing customer base, making Hong Kong the focus of its development.

According to information, the bank was acquired by British bank Crindlays Bank in 1970 with a 50% stake, and gradually became its wholly-owned subsidiary.

However, because Dao Heng Bank's business volume in Hong Kong did not meet the expectations of the British bank Crindlays Bank, and the future situation in Hong Kong was unclear, Crindlays Bank had already intended to sell Dao Heng Bank.

However, until now, no suitable buyer has been found.

Currently, this bank has a total of 12 branches in Hong Kong. Last year, the size of its deposit assets was around HK$8 million. This is a huge gap compared to the former Bank of East Asia, but it still has a certain size in the Hong Kong financial circle.

Its business covers multiple fields including personal savings, corporate loans, foreign exchange transactions, etc., and it has a relatively stable customer base.

However, due to the double impact of the bank run and Bank of East Asia's high deposit interest rate strategy, Daoheng Bank is facing the dilemma of extremely tight capital chain.

According to their investigation, Dao Heng Bank lost nearly HK$12 million in funds yesterday alone. Since it has branches, their customers can withdraw cash faster.

Of course, not all of the lost HK$200 million flowed into Bank of East Asia. After all, Bank of East Asia now has a limited number of branches, and many people who want to deposit money cannot do so.

The 200 million Hong Kong dollars is definitely a huge loss for Dao Heng Bank.

This is because, although Dao Heng Bank's deposit assets previously amounted to HK$8 million, much of the funds were used for investment and lending, and Dao Heng Bank's own deposits were less than HK$4 million.

Having lost 200 million Hong Kong dollars on the first day, if Daoheng Bank lost another 200 million Hong Kong dollars on the second day just like the day before, then on the third day, it would be afraid that its capital chain would be completely broken.

Once the capital chain is broken, the bank will not be able to operate normally, the customer run will only become more intense, and the collapse of Daoheng Bank is only a matter of time.

As a result, Daoheng Bank became the best target of Bank of East Asia, and Cui Zilong sent people to keep a close eye on Daoheng Bank.

After all, once Dao Heng Bank, which has 12 branches, is acquired, the number of branches of Bank of East Asia will jump directly from 20 to 32, the coverage of outlets will be greatly expanded, the layout in the Hong Kong financial market will be more complete, and the competitiveness will be significantly enhanced.

Although several branches overlap with those of Bank of East Asia, these overlapping outlets can be optimized and integrated later, and their functional positioning can be re-planned according to the business needs and customer flow of different regions to maximize the utilization of resources.

So, the impact is not big.

In fact, even if Bank of East Asia did not target Dao Heng Bank, this bank with a long history in Hong Kong would be acquired by Guoco Group, a subsidiary of Malaysia's Hong Leong Group, next year, in 1982.

In addition, Daoheng Bank is now facing a sudden bank run, which has made it even more shaky.

As expected, the queues at all major branches of Daoheng Bank on that day were even longer than the day before.

By noon, many branches were running low on cash and posted notices suspending cash withdrawal services.

This news was like a bombshell, which caused a stir among Daoheng Bank's customer base and panic spread quickly.

The depositors who had originally held out a glimmer of hope were now completely panicked and flocked to other branches, trying to withdraw their deposits.

The atmosphere inside Daoheng Bank's headquarters was so depressing that it made one feel breathless.

General Manager Wang Yangyan supported his head with both hands, his eyes full of fatigue and helplessness. He knew that Daoheng Bank had reached a critical moment of life and death.

If a solution is not found soon, bank failure will be inevitable.

He has already called the parent company, the British bank Crindlays Bank. Now only they can save Daoheng Bank.

However, they just said that they would hold a meeting to discuss the matter, and then there was no further news.

"What should we do now? Although our head office still has tens of millions of Hong Kong dollars in cash reserves, distributing them to the branches will not be of much use at all. According to the current rate of bank runs, these tens of millions of Hong Kong dollars will be withdrawn in less than half a day, and the situation will be completely out of control!" A senior executive said anxiously.

“What can I do? Our bank is now in a state of despair. We can only hope that the parent company can come up with a solution as soon as possible, or that there is a new buyer willing to take over our bank. Otherwise, there is really no way to save the situation.” The general manager sighed, his face full of bitterness.

As the general manager of Daoheng Bank, he naturally knew that the parent company Crindlays Bank had been seeking to sell Daoheng Bank in the past two years.

But he knew very well that even Daoheng Bank before the bank run could not be sold, let alone the Daoheng Bank that was now on the verge of bankruptcy.

Just when people inside Daoheng Bank were in panic and worried, Bank of East Asia had already quietly taken action.

That night, after finding out the details of Daoheng Bank, Dashan quickly formed a professional M&A team, whose members included elites from various fields such as finance, law, and accounting.

Afterwards, he personally visited Daoheng Bank's general manager Wang Yangyan and stated the Bank of East Asia's acquisition intention directly. (End of this chapter)