Bank of East Asia
Encyclopedia
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
and the third largest bank in Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
. Its chairman and chief executive is Sir David Li. Its head office is in Central
Central, Hong Kong
Central is the central business district of Hong Kong. It is located in Central and Western District, on the north shore of Hong Kong Island, across Victoria Harbour from Tsim Sha Tsui, the southernmost point of Kowloon Peninsula...
.
It was founded in Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
in 1918 and has since grown to a HK$68.4 billion (US$8.5 billion) market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
as at February 27 2011, with consolidated assets of US$50.85 billion (as at 30 June 2008). It is listed on the Hong Kong Stock Exchange
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
as BEA. The Bank of East Asia has 91 retail branches in Hong Kong, as well as 60 in mainland China and around 30 in the United States, Canada and Britain. Worldwide, the bank employs more than 10,800 people.
In 1995, BEA acquired United Chinese Bank, which was fully merged with the bank in 2001. In 2000 it acquired First Pacific Bank
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...
.
Mainland operations
On 20 May 2008, Bank of East Asia became the first foreign bank to issue 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 will issue the debit cards jointly with China UnionPayChina UnionPay
China UnionPay , also known as UnionPay or by its abbreviation, CUP, is the only domestic bank card organization in the People's Republic of China . Founded in March 2002, China UnionPay is an association for China's banking card industry, operating under the approval of the People's Bank of China...
, 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 is the only foreign bank in mainland China to offer direct Alipay payment support and the only foreign bank in mainland China to independently issue credit cards (RMB-denominated UnionPay credit cards in 2008, and more recently Visa-branded US dollar-denominated cards in April 2011).
Overseas operations
BEA operates overseas in several locations serving expatriate Hong Kong residents. A 70% stake in Bank of East Asia CanadaBank of East Asia Canada
Industrial and Commercial Bank of China , formerly The Bank of East Asia , was founded in 1991; it was the Canadian unit of The Bank of East Asia Group or BEA in Hong Kong. The bank operates 5 branches in Canada and offers retail banking products catering to expatriate Hong Kong Chinese in Canada...
was sold to Industrial and Commercial Bank of China
Industrial and Commercial Bank of China
Industrial and Commercial Bank of China Ltd. is the largest bank in the world by profit and market capitalization. It is one China's 'Big Four' state-owned commercial banks .It was founded as a limited company on January 1, 1984...
in early 2010 and all branches were renamed ICBC Canada in July. BEA USA remains the only wholly owned unit of BEA in North America. However, a preliminary agreement has been reached with ICBC to sell a majority stake in this operation as well.
Rumours of capital inadequacy
On 24 September 2008, Bank of East Asia issued 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 ratioCapital adequacy ratio
Capital adequacy ratio , also called Capital to Risk Assets Ratio , is a ratio of a bank's capital to its risk...
was above the industry average, at 14.6 percent. A statement by Joseph Yam
Joseph Yam
The Honourable Joseph Yam Chi-kwong, GBM, GBS, CBE, JP is a Hong Kong statistician, economist and civil servant. Yam was the Chief Executive of the Hong Kong Monetary Authority from April 1993 to 1 October 2009.-Biography:...
, chief executive of the Hong Kong Monetary Authority
Hong Kong Monetary Authority
The Hong Kong Monetary Authority or HKMA is Hong Kong's central banking institution . It is a government authority founded on 1 April 1993 via the consolidation of "Office of the Exchange Fund" and the "Office of the Commissioner of Banking"...
, 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.