In Hong Kong, we build a global business empire

Chapter 662 Joining Forces to Divide Up Huifeng Bank
The Kang Le Building is not far from the headquarters of the Bank of East Asia.

Therefore, it wasn't long before Lin Haoran arrived at He Shanheng's office.

Upon entering the office, he was surprised to find Mr. Brown, the VP of Standard Chartered Bank, also there.

Lin Haoran originally thought that Mr. Brown had already left, but he didn't expect him to still be here.

"Mr. Lin, congratulations!" Brown smiled and extended his hand to shake hands with Lin Haoran, but no matter how Lin Haoran looked at it, he felt that there was a bit of bitterness and reluctance hidden in that smile.

Lin Haoran naturally understood the meaning behind Brown's words.

The other party was congratulating his Bank of East Asia for successfully surpassing Huafeng Bank in market share and becoming the largest bank in Hong Kong.

Standard Chartered Bank has a longer history in Hong Kong than Huafeng Bank. It was among the first foreign banks to enter Hong Kong and obtained the right to issue banknotes in Hong Kong many years ago.

However, despite Standard Chartered Bank's commendable development in Hong Kong, it has always been overshadowed by HSBC.

Standard Chartered Bank originally intended to take advantage of the situation to acquire HSBC Bank, and if successful, they believed they could use this opportunity to ascend to the throne of Hong Kong's largest bank.

However, when Brown saw the estimated data published in the Oriental Daily News, his heart sank.

He clearly realized that even if Standard Chartered Bank successfully acquired Huafeng Bank, and even if all of Hang Seng Bank's market share were attributed to Standard Chartered Bank, it would still be impossible for it to surpass Bank of East Asia.

Two months ago, Standard Chartered's market share was indeed close to 10%, but in the past two months, while the market share of Huafeng Bank and Hang Seng Bank has continued to decline, Standard Chartered's market share has also been shrinking.

These are, of course, the result of being exploited by the Bank of East Asia.

Today, Standard Chartered Bank's funds in Hong Kong amount to only about HK$150 billion, a figure even less than that of Hang Seng Bank.

With the rise of Bank of East Asia, if banks in the Hong Kong region were ranked by market size, Standard Chartered Bank would only be fourth, after Bank of East Asia, HSBC, and Hang Seng Bank.

Moreover, if Standard Chartered Bank were to acquire Huafeng Bank now, Hengsheng Bank would most likely be unable to survive.

Therefore, it is a pipe dream for Standard Chartered Bank to surpass Bank of East Asia.

In other words, even if Standard Chartered Bank successfully acquires HSBC, it will only be able to play the role of "number two".

Therefore, it is not surprising that Brown was experiencing a mix of emotions at that moment.

Of course, this "second place" position is a significant improvement compared to the former Standard Chartered Bank.

After all, Huafeng Bank's market share is not low, and coupled with Standard Chartered Bank's own share, as long as it does not make strategic mistakes, it is not difficult for Standard Chartered Bank to maintain its position as the top British bank in Hong Kong.

After greeting the other party, Lin Haoran was pulled aside by He Shanheng.

"Haoran, Mr. Brown and I have almost finished our talks. Judging from the current situation, I think the result is quite ideal. We're just waiting for you to make the final decision!" He Shanheng said with a satisfied smile.

"Oh? Uncle He, please tell me the details!" Lin Haoran said quickly, his eyes full of curiosity.

"Mr. Brown came with instructions from senior management at Standard Chartered Bank headquarters. They were worried that things might change if they waited too long, so they wanted to finalize the cooperation with us as soon as possible. He is staying here now to wait for our final decision."

Sure enough, he immediately revealed his bottom line upon arrival. They readily agreed to let us choose any two of the four conditions we had previously proposed.

After two hours of negotiations with the other party, and their feedback to headquarters, the current outcome is that Huifeng Bank will assist us in obtaining the right to issue banknotes in Hong Kong.
Alternatively, we can acquire Hengsheng Bank. After they successfully acquire Huifeng Bank, they will sell the shares of Hengsheng Bank held by Huifeng Bank to us at market price.

In addition, they are willing to share international market resources with us in South Asia, Africa, and South America.

However, they are not willing to open up and share market resources in Japan, Southeast Asia, Europe, and the Middle East.

I've thought it over carefully, and I think we can agree to their request. After all, cooperation is beneficial to both sides, and we shouldn't push them too hard.

"If they impulsively provide financial support to Huifeng Bank, then no one will benefit in the end!" He Shanheng spoke quickly and clearly, explaining the outcome of the negotiations.

Lin Haoran nodded slightly, fully aware of the current situation.

If Standard Chartered Bank attempts to acquire HSBC Bank unilaterally, Bank of East Asia is fully capable of interfering and helping HSBC Bank resolve its crisis.

After all, as long as Bank of East Asia is willing to lend money to Huifeng Bank, no matter how Standard Chartered Bank tries to sabotage it behind the scenes, Huifeng Bank can get through the current difficulties unscathed.

Similarly, if Standard Chartered Bank hadn't harbored ulterior motives and attempted to secretly acquire Huifeng Bank, but instead genuinely provided financial assistance, then even if Huifeng Bank's cash flow was strained, as long as a sum of money was injected to help it weather the storm, it would be able to gradually recover the funds that were difficult to recoup, and the crisis would naturally dissipate.

After all, Huifeng Bank still has its fundamental strengths; it's just temporarily hampered by cash flow problems.

Hong Kong is just one of Standard Chartered Bank's many markets. If they are determined to support HSBC, it would not be difficult for them to mobilize funds from other markets to provide support.

Now, both banks have set their sights on Huifeng Bank, and as a result, Huifeng Bank's fate is predictable and extremely tragic.

At this point, Huifeng Bank was like a fish on a chopping board, left to be divided up at will by Standard Chartered Bank and Bank of East Asia.

"It seems they're reluctant to give up those incredibly lucrative markets!" Lin Haoran said with a smile.

Regions like Japan, Southeast Asia, the Middle East, and Europe are either highly developed economies with vibrant commercial activity.
Either the market has huge potential and broad development prospects.

Clearly, Standard Chartered Bank had its own agenda and was unwilling to let Bank of East Asia so easily enter these markets and gain a foothold with their help.

In contrast, the economic development levels of places like Africa, South America, and South Asia are still far behind, and their market maturity and profit margins are relatively limited. This is probably why they are willing to share their resources.

"That's right, anyone with eyes can see what they're thinking. But I think, Haoran, you're doing very well in Japan now. With your help, if East Asia Bank wants to enter the Japanese market, there shouldn't be any major obstacles."

The same applies to the Southeast Asian market. Your businesses are thriving in Southeast Asia, and you have a close relationship with Guo Henan, the richest man in Southeast Asia. This is like holding the golden key to unlocking the Southeast Asian market. Without the cooperation of other banks, we can establish a firm foothold.

So even if they don't share the Japanese and Southeast Asian markets, it's not an unbearable loss for us.

As for the Middle East and European markets, we currently have markets in Japan, Southeast Asia, Africa, and South Asia waiting to be explored. With limited resources, it's more important to solidify our position in these markets first.

Even if they were willing to share more market resources, it would be difficult for us to expand comprehensively in the short term. In fact, we might end up neglecting some aspects due to a dispersion of our energy. It's better to proceed steadily and cautiously, step by step. That's why I agreed to their offer!

Lin Haoran nodded.

"So, they won't even give us financial subsidies? If they really take over Huifeng Bank, they'll reap all the benefits!" Lin Haoran said with a smirk.

"Mr. Brown has made it very clear that if they want to help us secure the right to issue currency in Hong Kong, they will have to spend a large sum of money in Britain to smooth things over, and that is no small amount."

Moreover, losing Hang Seng Bank will significantly reduce the benefits they can gain from this acquisition. In addition, acquiring a controlling stake in Hui Fung Bank will cost them at least several billion Hong Kong dollars, and possibly tens of billions.

This would strain Standard Chartered's own cash flow. If they were to withdraw a huge sum of money to compensate us, they might end up like Huifeng Bank and face a financial crisis.

When Mr. Brown and I discussed this, he laid out all these facts. Having worked in the financial industry for so many years, I can tell he wasn't lying.

"Although Standard Chartered Bank is financially strong, it does face considerable risks in spending such a large sum of money at once," He Shanheng patiently explained.

Lin Haoran sat down and began to ponder.

Lin Haoran knew he definitely couldn't take away Huifeng Bank's market share.

Neither the British conglomerate nor the Governor's Office would allow him to take it.

Therefore, even if it's not given to Standard Chartered Bank, it can only be left to Huifeng Bank itself.

He was very clear about this.

Being able to acquire Hengsheng Bank from Huifeng Bank is indeed a good result.

With the addition of extra currency issuance rights and some overseas market resource sharing cooperation, this situation is already a very attractive outcome for Bank of East Asia.

Lin Haoran knew that in the complex game of finance, one should not be too greedy and should know when to stop in order to gain a foothold in the long run.

If Standard Chartered Bank is not allowed to acquire Huafeng Bank, then Huafeng Bank will have to remain in existence, and in that case, Bank of East Asia will not benefit as much.

As for the right to issue currency, it is an even scarcer resource that money cannot buy without Standard Chartered Bank's connections in the UK.

Standard Chartered Bank's willingness to assist Bank of East Asia in securing this crucial position demonstrates its considerable sincerity. Furthermore, the inclusion of Hang Seng Bank, a highly influential bank in Hong Kong's financial sector, under Bank of East Asia's umbrella will undoubtedly further enhance Bank of East Asia's market share!
Moreover, the reputation and status of Hang Seng Bank are of great significance in the Hong Kong Chinese world, which can help Bank of East Asia attract more Chinese customers and consolidate its foundation in the Hong Kong Chinese financial market.

Moreover, this acquisition of Heng Sheng Bank will deepen He Shanheng's gratitude towards him, thereby motivating He Shanheng to work even harder to assist him in managing East Asia Bank.

It is important to know that Hengsheng Bank was founded by He Shanheng. In He Shanheng's heart, Hengsheng Bank holds an irreplaceable position, and this emotional bond is not something that can be easily severed.

If Bank of East Asia can acquire Heng Sheng Bank, it would be a continuation of He Shanheng's past efforts and would also make him feel more grateful to Lin Haoran for facilitating the deal.

After thinking for a moment, Lin Haoran slowly raised his head and said with a smile, "Since that's the case, then let's agree to their request. They've been so straightforward, we can't appear petty."

Moreover, in the long run, this cooperation will bring many benefits to the development of Bank of East Asia, and we don't need to lose sight of the bigger picture for a small gain.

After Standard Chartered Bank acquired HSBC, its strength in Hong Kong did increase significantly, but it still lags behind Bank of East Asia by a considerable margin.

Moreover, after Bank of East Asia acquires Hang Seng Bank, its strength will increase once again, and the gap between Standard Chartered Bank and Bank of East Asia will only widen.

Today, Chinese-owned conglomerates are rising vigorously, while British-owned conglomerates are gradually declining. This is an unstoppable trend of the times!
Although Standard Chartered Bank is a key representative of British conglomerates in Hong Kong in the future, it is nothing short of a pipe dream to surpass Bank of East Asia; it has absolutely no chance.

Unless British conglomerates can re-emphasize the Hong Kong market and pour huge sums of money back into Hong Kong at any cost.

However, the global economic landscape has undergone profound changes, and the Hong Kong market is no longer what it used to be. It is almost impossible for a British consortium to make such a decision.

Since the 1960s, many British-owned companies have been taking away large sums of money they earned in Hong Kong, selling companies, abandoning properties, and selling off real estate.

By the 1970s and 80s, the exodus had become even more intense, with many British-owned companies fleeing Hong Kong like startled birds.

This seemingly resolute withdrawal, on the contrary, freed up vast development space for Chinese-funded conglomerates, allowing them to rise rapidly and grow stronger.

Now that the funds have been taken out of Hong Kong, do you really expect them to bring the money back?

This is utterly delusional and has absolutely no chance of coming true.

It is evident that the decline of British-owned conglomerates was an inevitable trend of the times, a choice made entirely after weighing the pros and cons!

Therefore, Lin Haoran was not worried at all that Standard Chartered Bank, after acquiring Huifeng Bank, would once again replace Huifeng Bank and become the new hegemon of Hong Kong's financial industry.

After Lin Haoran and He Shanheng reached an agreement to accept the cooperation terms proposed by Standard Chartered Bank, the two returned to Mr. Brown.

Sitting on the sofa opposite Brown, Lin Haoran's lips curled up slightly, his gaze filled with inquiry, and he asked with a smile, "Mr. Brown, I've always had a question in my mind that I'd like to ask you about."

“Mr. Lin, please speak freely. In the future, let’s join hands in Hong Kong’s financial sector and share the market. I especially look forward to Standard Chartered Bank and Bank of East Asia developing more in-depth cooperation!” Brown laughed heartily.

The other person's eyes seemed to be full of expectation, but Lin Haoran didn't care whether it was true or not.

Lin Haoran crossed his arms, his eyes filled with curiosity, and asked, "I'm particularly interested to know, if we reach a cooperation agreement, what specific moves does Standard Chartered Bank plan to make behind-the-scenes maneuver against Huifeng Bank, plunging them into a complete crisis so that your bank can take advantage of the situation?"

"I don't need to hide this from Mr. Lin and Mr. He. Before I came here, I had a deep private conversation with Governor Merrihau."

"The Governor has made a clear promise to Standard Chartered Bank that as long as we have the strength to acquire Huafeng Bank, the Governor's Office will fully support us. The more than HK$10 billion previously promised to temporarily support Huafeng Bank will naturally be withdrawn!" Mr. Brown leaned back slightly, a hint of smugness on his face, and said slowly.

Lin Haoran nodded; this was not unexpected.

The Governor's Office's support for Hui Fung Bank was a last resort. They were afraid of the huge sum of more than 10 billion Hong Kong dollars. Hui Fung Bank was now like mud that could not be plastered on a wall, repeatedly dragging down the Governor's Office.

But given Huifeng Bank's special status as a representative of British-owned enterprises in Hong Kong, its collapse would have a huge impact on Hong Kong's financial industry.

However, if Standard Chartered Bank were willing to acquire HSBC, the situation would be completely different.

Although Standard Chartered Bank is not a Hong Kong-based company, it is a genuine British company that represents the interests of the British people, and everyone's interests are the same.

Therefore, the Governor's Office naturally preferred to support Standard Chartered Bank to take over the "hot potato" that was HSBC Bank.

In this way, the British-owned enterprises could maintain their position in Hong Kong's financial sector, while also preventing the Governor's Office from being dragged into a bottomless pit of funds by the Bank of Hong Kong. It was a win-win situation.

Brown didn't stop there, but continued to speak eloquently: "To say that Huifeng Bank would be in dire straits due to a broken capital chain would be incredibly easy. Mr. Lin, you may not know this, but just in the last two days, Mr. Schjöck of Swire Group and Mr. Roland Kadoorie of CLP Power both came to me personally to ask for my help."

They are deeply worried, fearing that Huifeng Bank will fall into a more serious crisis, and hope that Standard Chartered Bank can step in to help Huifeng Bank and provide some support so that Huifeng Bank can avoid the misfortune of a broken capital chain and thus avoid being implicated themselves.

They also stated that if Huifeng Bank can successfully weather this crisis, they are willing to transfer half of its financial business from Huifeng Bank to Standard Chartered Bank.

Therefore, now that I am facing the two Hong Kong business giants, Swire and CLP, I only need to subtly suggest that they publicly propose to Huafeng Bank that they want to transfer all financial business out of Huafeng Bank, and I think they will not refuse.

It's important to know that these two companies are very influential in Hong Kong's financial sector, and Huifeng Bank has always paid close attention to their cash flow. If they do propose to transfer funds out, Huifeng Bank will inevitably face a huge funding gap.

At that point, Mr. Lin, you can certainly imagine the fate of Huifeng Bank. Unless Huifeng Bank can raise two or three hundred billion Hong Kong dollars in a very short period of time, no one can save it and can only watch it head towards its doom!

Upon hearing this, Lin Haoran and He Shanheng exchanged a glance.

They never imagined that so much had happened behind the scenes.

Today, Swire Group and CLP Power are undoubtedly the two most important remaining partners of Huafeng Bank.

Swire Group needs no introduction. As one of the four major traditional trading houses in Hong Kong, Swire Group occupies a crucial position in Hong Kong's business landscape. Its business is extensive, covering multiple fields such as shipping, trade, and real estate. It has strong financial strength and a long-standing and deeply intertwined cooperation with Huafeng Bank.

CLP Power Hong Kong, as a giant in Hong Kong's power supply, controls the city's energy lifeline. Its stable cash flow and massive business scale make it a highly valued client that Huifeng Bank relies on.

If these two companies decide to transfer their financial business out of Huifeng Bank, it will be tantamount to cutting a knife into Huifeng Bank's already fragile cash flow.

Furthermore, with the loss of over HK$10 billion in funding from the Governor's Office, the financial difficulties facing Huifeng Bank will be as unstoppable as an avalanche.

Even if those British tycoons had the power to save Huifeng Bank, they wouldn't intervene because there would be no benefit for them!

Who would dare to take on this mess so easily?

From a business perspective, why would shrewd capitalists do something that isn't profitable?

If Standard Chartered Bank joins forces with Bank of East Asia to deal with HSBC, then HSBC will be on its last legs!
Even if external forces want to come to the rescue, they will have to weigh the options carefully. Which sucker would have enough strength and be willing to take such a huge risk to save a crumbling British bank?
Lin Haoran narrowed his eyes slightly, pondered for a moment, and then said, "Mr. Brown's plan is brilliant. Using the business transfer of these two giants to deliver a fatal blow to Huifeng Bank will indeed put them in a desperate situation."

However, could there be any unforeseen circumstances? After all, these two companies have been cooperating with Huifeng Bank for many years; wouldn't this sudden decision cause some unnecessary trouble?

He Shanheng also looked at Brown, wanting to see how he would respond.

Before Lin Haoran arrived, Brown and He Shanheng discussed more about the interests between the two parties, so he naturally didn't ask about these things.

Mr. Brown smiled confidently and said slowly, "Mr. Lin, you've thought this through very well, but you don't need to worry at all."

Swire Group and CLP Power are both extremely shrewd businessmen. They know perfectly well that Huifeng Bank is now terminally ill and on its last legs.

If even Standard Chartered Bank is determined to deal with HSBC, then who else can save it?
Continuing to align themselves with Huifeng Bank is tantamount to carrying a ticking time bomb, only bringing them greater risks.

However, once Standard Chartered Bank successfully acquires Huafeng Bank, and Huafeng Bank becomes even stronger after the merger with Standard Chartered Bank, their funds in Huafeng Bank will naturally be safe and secure, and the risks will disappear.

With such obvious benefits right in front of them, there's no reason for them not to choose to cooperate with us.

As for the variables you're worried about, we can completely avoid them in advance as long as we plan properly and operate skillfully.

I have reached a preliminary cooperation agreement with them. Now, as long as we give them a little push, they will follow our plan.

Moreover, I think that Huifeng Bank's other major clients must be feeling very anxious and uneasy right now. If Standard Chartered Bank takes the initiative to contact them, it wouldn't be surprising if they became 'traitors' to protect themselves during Huifeng Bank's most difficult time.

After all, who would dare risk offending Standard Chartered Bank and Bank of East Asia by continuing to support Huifeng Bank, a bank we've jointly targeted and which is already terminally ill?

“Mr. Brown, I’ve made up my mind. Bank of East Asia agrees to cooperate with Standard Chartered Bank!”

At this moment, Lin Haoran stopped asking for more details and instead smiled and spoke decisively.

(End of this chapter)