Bank Of East Asia
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The Bank of East Asia Limited, often abbreviated to BEA, is a Hong Kong banking and financial services company, headquartered in
Central Central is an adjective usually referring to being in the center of some place or (mathematical) object. Central may also refer to: Directions and generalised locations * Central Africa, a region in the centre of Africa continent, also known as ...
, Hong Kong. It is currently the largest independent local Hong Kong bank, and one of two remaining family-run Hong Kong banks, with the other being
Dah Sing Bank Dah Sing Banking Group Limited (DSBG) is a Hong Kong-based banking and financial company, headquartered in Wan Chai. It has been listed on the Hong Kong Stock Exchange since 2004. It has three main banking subsidiaries (Dah Sing Bank, Banco C ...
. It continues to be run by 3rd and 4th generation of the
Li family Li, li, or LI may refer to: Businesses and organizations * Landscape Institute, a British professional body for landscape architects * Leadership Institute, a non-profit organization located in Arlington, Virginia, US, that teaches "political te ...
. It was incorporated as a publicly-listed bank in
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
on 14 November 1918, and officially opened for business on 4 January 1919, by a group of local Hong Kong Chinese businessmen who "not only understood modern banking, but the needs of modern Chinese business." Essentially, it aimed to serve local Hong Kong citizens and businesses who were currently underserved by the large British banks and small, unorganized, and often unincorporated local Hong Kong moneylenders. By the 1930s, BEA was considered the most influential local Hong Kong bank in the city.


History


Origins, and until 2008

BEA was co-founded in
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
on 14 November 1918 and officially opened for business on 4 January 1919. The idea of a local Hong Kong bank to blend East and West, essentially by embracing the style of a Chinese, family-run bank but also adopting modern accounting and banking methods, came from Kan Tong-po (簡東浦). Kan had the necessary banking background, but needed the financial support of the Li brothers (
Li Koon-chun Li, li, or LI may refer to: Businesses and organizations * Landscape Institute, a British professional body for landscape architects * Leadership Institute, a non-profit organization located in Arlington, Virginia, US, that teaches "political te ...
(李冠春) and
Li Tse-fong Li Tse-fong (21 September 1891 – 5 September 1953) 李子方 was a Hong Kong entrepreneur and politician. He was a founder of the Bank of East Asia and member of the Legislative Council of Hong Kong. Education and business career Born in Ho ...
(李子方)) and the sociopolitical support of Sir
Shouson Chow Sir Shouson Chow (; 1861–1959), KBE, LLD, JP, also known as Chow Cheong-Ling (), was a Hong Kong businessman. He had been a Qing dynasty official and prominent in the Government of Hong Kong. Family Chow is said to have been born in Wong ...
(周長齡), who would become co-founders, along with several other prominent local Hong Kong Chinese businessmen, including Fung Ping Shan (馮平山). While Kan later sold his stake in the bank in the run-up to Hong Kong's
handover In cellular telecommunications, handover, or handoff, is the process of transferring an ongoing call or data session from one channel connected to the core network to another channel. In satellite communications it is the process of transfe ...
, the
Li family Li, li, or LI may refer to: Businesses and organizations * Landscape Institute, a British professional body for landscape architects * Leadership Institute, a non-profit organization located in Arlington, Virginia, US, that teaches "political te ...
influence in the bank continues to run deep today, with Sir
David Li Sir David Li Kwok-po (; born 13 March 1939, London, England) is a Hong Kong banker and politician. He is the Executive Chairman of the Bank of East Asia and Pro-Chancellor of the University of Hong Kong. He was a member of the Legislative ...
(3rd generation) being Chairman, and his sons Adrian Li and Brian Li (4th generation) being co-CEO's. BEA expanded rapidly internationally after opening. In 1920, just 1 year after the bank's official opening, BEA opened its first branches outside of Hong Kong, in Shanghai and Ho Chi Minh City. In 1952, BEA opened its Singapore branch, located in Raffles Place at 60 Robinson Road. BEA would later enter the North American market in 1991 (though operations would later be sold to
Industrial and Commercial Bank of China Industrial and Commercial Bank of China Limited (ICBC; ) is a Chinese multinational bank. Founded as a limited company on 1 January 1984, ICBC is a state-owned commercial bank. With capital provided by the Ministry of Finance of China, the ...
in January 2010), and mainland China in 1992. The late 1930s to 1940s were tough on the bank, as the
Second Sino-Japanese War The Second Sino-Japanese War (1937–1945) or War of Resistance (Chinese term) was a military conflict that was primarily waged between the Republic of China and the Empire of Japan. The war made up the Chinese theater of the wider Pacific Th ...
and later
Japanese occupation of Hong Kong The Imperial Japanese occupation of Hong Kong began when the Governor of Hong Kong, Mark Aitchison Young, Sir Mark Young, surrendered the British Crown colony of British Hong Kong, Hong Kong to the Empire of Japan on 25 December 1941. The surr ...
resulted in heavy losses, with many of BEA's assets seized. Even after the war, the
Chinese Civil War The Chinese Civil War was fought between the Kuomintang-led government of the Republic of China and forces of the Chinese Communist Party, continuing intermittently since 1 August 1927 until 7 December 1949 with a Communist victory on m ...
and later United Nations embargo on China negatively impacted Hong Kong's economy, and as a result, BEA. In 1965, Hong Kong experienced a city-wide banking crisis which saw other local Hong Kong banks suffer
bank run A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...
s and hostile takeovers, such as
Hang Seng Bank Hang Seng Bank Limited () is a Hong Kong-based banking and financial services company with headquarters in Central, Hong Kong. It is one of Hong Kong's leading public companies in terms of market capitalisation and is part of the HSBC Group, ...
. BEA, however, was undisturbed, but became much more conservative thereafter. In 1984, after the
Sino-British Joint Declaration The Sino-British Joint Declaration is a treaty between the governments of the United Kingdom and China signed in 1984 setting the conditions in which Hong Kong was transferred to Chinese control and for the governance of the territory after ...
, BEA refused to follow the lead of many leading firms at the time to move their headquarters overseas, and instead decided to double-down and reaffirm their "Hong Kong roots". Traditionally more focused on internal growth rather than external acquisitions, in 1995, BEA made its first acquisition when it acquired United Chinese Bank (), with the merger being completed in 2001. BEA also acquired
First Pacific Bank First Pacific Bank Limited was a bank based in Hong Kong. It was a wholly owned subsidiary of the investment holding company FPB Bank Holding Company Limited (FPB Bank Holdco). Its headquarters were in the First Pacific Bank Centre in Wan Cha ...
in 2000, and that merger was completed in 2002.


2008 to 2018

On 24 September 2008, BEA experienced a serious test in the form of the worst bank run in its history. BEA had to issue a statement to counter "malicious rumours" about its stability, as queues of customers seeking to withdraw funds formed outside some of its Hong Kong branches. It condemned the rumour mongers, declaring that it had sufficient funds to meet customers' requests, and noting that its
capital adequacy ratio Capital Adequacy Ratio (CAR) is also known as ''Capital to Risk (Weighted) Assets Ratio'' (CRAR), is the ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and co ...
was above the industry average, at 14.6 percent. A statement by
Joseph Yam Joseph Yam Chi-kwong, GBM, GBS, CBE, JP (任志剛; born 1948, Hong Kong) is a Hong Kong statistician, economist and civil servant. He was the first Chief Executive of the Hong Kong Monetary Authority, Hong Kong's ''de facto'' central bank, ...
, the then chief executive of the
Hong Kong Monetary Authority The Hong Kong Monetary Authority (HKMA) is Hong Kong's central bank, central banking institution. It is a government authority founded on 1 April 1993 when the Office of the Exchange Fund and the Office of the Commissioner of Banking merged. Th ...
, dismissed the rumour and strongly supported the bank, adding that funds would be made available to the bank if required but that no request had been made. Earlier in the week, the bank had been forced to restate its previous half-year's earnings downwards by nearly 12 percent after it was revealed that one of its staff had conducted unauthorised trades and then buried the losses. In October 2015, BEA entered into agreement with Sinopac Securities to sell BEA Wealth Management Services (Taiwan) Limited and Tung Shing Holdings Company Limited. BEA chairman and CEO David Li said that the disposals would allow BEA to rationalise its securities business in Greater China region. There was no disclosure of the transaction amount involved in this sales. As the banking sector and BEA continued to face challenges, BEA launched a 3-year cost-cutting plan in the beginning of 2016 to save HKD 700 million by 2018, by reducing dividend payouts, controlling costs, and trimming assets. The saving target was about 8% of its cost base in 2015. It was expected that 40% of savings coming from business alignment, 25% from restructuring middle to back offices, and remaining via branch automation and streamlining. By June 2016, BEA already slashed 180 jobs and closed down 22 securities brokerages outlets. Other key assets sold during this period of cost cutting included its holdings in Tricor, a professional services firm to private equity firm Permira for HKD 6.47 billion (profit of HKD 3.1 billion), and various consumer finance assets to China moneylender QL Finance for HKD 1.08 billion. On 29 June 2018, after 34 years of being a constituent of the
Hang Seng Index The Hang Seng Index (HSI) is a freefloat-adjusted market- capitalization-weighted stock-market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator ...
, BEA was cut during the quarterly review of Hang Seng Index composition, effective 10 September 2018. The index said that the Bank of East Asia did not meet the turnover and market capitalisation minimums. In late 2018, BEA began to venture into
investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
by setting up a debt capital markets team based in Hong Kong.


Since 2019

BEA began 2019 by celebrating its
centennial {{other uses, Centennial (disambiguation), Centenary (disambiguation) A centennial, or centenary in British English, is a 100th anniversary or otherwise relates to a century, a period of 100 years. Notable events Notable centennial events at a ...
on 2 January 2019, with a reception at the
Hong Kong Convention and Exhibition Centre The Hong Kong Convention and Exhibition Centre (HKCEC) is one of the two major convention and exhibition venues in Hong Kong, along with AsiaWorld–Expo. It is located in Wan Chai North, Hong Kong Island. Built along the Victoria Harbou ...
attended by various business and political leaders from Hong Kong. On 1 July 2019, David Li stepped down as CEO after 38 years (but still retaining his Chairmanship), and was replaced by his sons Adrian and Brian Li as co-CEO's. BEA faced a difficult 2019, with loan writedowns in China and unprecedented scale of
protests in Hong Kong A protest (also called a demonstration, remonstration or remonstrance) is a public expression of objection, disapproval or dissent towards an idea or action, typically a political one. Protests can be thought of as acts of coopera ...
affecting business.


Business segmentation

BEA trades through the following segments: *Corporate banking *Personal banking *Wealth management *Insurance and retirement benefits *Treasury markets *China *International divisions


Headquarters

From 1918 to 1920, the bank was headquartered in 2
Des Voeux Road Central Des is a masculine given name, mostly a short form (hypocorism) of Desmond. People named Des include: People * Des Buckingham, English football manager * Des Corcoran, (1928–2004), Australian politician * Des Dillon (disambiguation), severa ...
, in Central, Hong Kong. In 1920, the bank moved its headquarters to the 29-storey Bank of East Asia Building (東亞銀行大廈) located at 10
Des Voeux Road Central Des is a masculine given name, mostly a short form (hypocorism) of Desmond. People named Des include: People * Des Buckingham, English football manager * Des Corcoran, (1928–2004), Australian politician * Des Dillon (disambiguation), severa ...
, standing between New Henry House and The Landmark. The Bank of East Asia Building has had multiple rebuilds over the years: * First generation (1920 to 1933) * Second generation (1935 to 1980) * Third generation (1982 to present)


Mainland China operations

Bank of East Asia began its mainland China business in 1992, and in 2007, was among the 4 foreign banks approved by China Banking Regulatory Commission (CBRC) to establish a locally incorporated bank, the Bank of East Asia (China) Ltd (BEA China). On 20 May 2008, BEA became a foreign bank that issued yuan-denominated debit cards in mainland China, taking advantage of the recent removal of a key restriction on foreign banks' retail business in the country. The bank issued the debit cards jointly with
China UnionPay UnionPay (), also known as China UnionPay () or by its abbreviation, CUP or UPI internationally, is a Chinese state-owned financial services corporation headquartered in Shanghai, China. It provides bank card services and a major card scheme ...
, the country's only bankcard network operator. The company claimed that the launch of debit cards would help attract retail banking customers by giving them greater convenience in accessing their deposits. In addition, it offers direct
Alipay Alipay () is a third-party mobile and online payment platform, established in Hangzhou, China in February 2004 by Alibaba Group and its founder Jack Ma. In 2015, Alipay moved its headquarters to Pudong, Shanghai, although its parent company An ...
payment support and issues credit cards (RMB-denominated UnionPay credit cards in 2008, and more recently Visa-branded US dollar-denominated cards in April 2011). BEA currently operate one of the most extensive networks in mainland China for a foreign bank.


Overseas operations

BEA operates overseas in several locations serving expatriate Hong Kong residents. BEA operates overseas branches in the following countries and markets: *Macau *Malaysia *Singapore *Taiwan *United States *United Kingdom Former overseas branches: *
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
(1991–2010): Retains 20% stake; sold 70% to
Industrial and Commercial Bank of China Industrial and Commercial Bank of China Limited (ICBC; ) is a Chinese multinational bank. Founded as a limited company on 1 January 1984, ICBC is a state-owned commercial bank. With capital provided by the Ministry of Finance of China, the ...
in 2010 and all branches were renamed ICBC Canada in July 2010; a further 10% was sold to ICBC in 2011.


Major shareholders

Major shareholders in BEA as of the 2019 annual report:


Leadership


Current Leadership

* ''Executive Chairman:''
Sir David Li Sir David Li Kwok-po (; born 13 March 1939, London, England) is a Hong Kong banker and politician. He is the Executive Chairman of the Bank of East Asia and Pro-Chancellor of the University of Hong Kong. He was a member of the Legislative C ...
(since April 1997) *''Chief Executive:'' Adrian Li and Brian Li (since July 2019)


List of former chairmen

# Pong Wai-ting (1919–1925); co-founder # Sir Shouson Chow (1925–1959); co-founder #Kan Tong-po (1959–1963); co-founder # Sir Kan Yuet-keung (1964–1984); son of Kan Tung-po #
Li Fook-wo Li Fook-wo, CBE, BS, MCS, Hon. LLD, Hon. DSSc, FCIB, FHKIB, JP (26 September 1916 – 4 July 2014) was a Hong Kong politician and banker. He was the Chief Manager of the Bank of East Asia, his family business, and also unofficial membe ...
(1984–1997); son of co-founder
Li Tse-fong Li Tse-fong (21 September 1891 – 5 September 1953) 李子方 was a Hong Kong entrepreneur and politician. He was a founder of the Bank of East Asia and member of the Legislative Council of Hong Kong. Education and business career Born in Ho ...


List of former chief executive officers

''The position of Chief Executive Officer was known as Chief Manager prior to 1986 '' # Kan Tong-po (1919–1963); co-founder # Sir Kenneth Fung (1963–1970); co-founder #Kan Yuet-hing (1970–1972); son of Kan Tung-po #
Li Fook-wo Li Fook-wo, CBE, BS, MCS, Hon. LLD, Hon. DSSc, FCIB, FHKIB, JP (26 September 1916 – 4 July 2014) was a Hong Kong politician and banker. He was the Chief Manager of the Bank of East Asia, his family business, and also unofficial membe ...
(1972–1977); son of co-founder
Li Tse-fong Li Tse-fong (21 September 1891 – 5 September 1953) 李子方 was a Hong Kong entrepreneur and politician. He was a founder of the Bank of East Asia and member of the Legislative Council of Hong Kong. Education and business career Born in Ho ...
#Michael Kan Yuet-loong (1977–1981); son of Kan Tung-po #
Sir David Li Sir David Li Kwok-po (; born 13 March 1939, London, England) is a Hong Kong banker and politician. He is the Executive Chairman of the Bank of East Asia and Pro-Chancellor of the University of Hong Kong. He was a member of the Legislative C ...
(1981–2019); grandson of co-founder Li Koon-chun


Disputes and incidents


Elliott Management

Hedge fund activist investor Elliott Management filed a lawsuit against BEA in July 2016 in Hong Kong court over a share placement transaction. Elliott Management, which held 7% of listed shares of BEA, had included majority of the bank's directors, its CEO and chairman in the lawsuit. The transaction in question was on BEA's issuance of new shares to Japan's Sumitomo Mitsui Banking Corp (SMBC) in 2015. Elliott cited "allegations of unfairly prejudicial conduct" and "alleged serious corporate governance failings". Elliott hoped to secure a declaration from the court that these placements were passed by BEA for "an improper purpose" and looked for an order requiring BEA to lift the contractual restrictions that would prevent SMBC and Caixa, another strategic investor on BEA, from reducing their stakes on BEA. In response, BEA applied to have Elliott's petition against them struck out. This case was heard by Mr Justice Jonathan Harris from 17 to 19 July 2017.What is Bank of East Asia and Elliott’s dispute about?, SCMP 2017-07-18 Retrieved 2018-05-01
/ref>


2019–20 Hong Kong protests

During the 2019–20 Hong Kong protests, several BEA outlets were accidentally targeted as protestors vandalized mainland-linked business. Protestors later spray-painted "Sorry" at the vandalized branches, after they realized BEA is locally run and owned.


References


External links

*
The Bank of East Asia website
{{Authority control Banks of Hong Kong Former companies in the Hang Seng Index Companies listed on the Hong Kong Stock Exchange Banks established in 1918 Hong Kong brands La Caixa