The Rise and Decline of Family-owned Banks in Hong Kong

In interviews with The People’s Daily, Prof. Kevin Au and Simon Lee comment on the rise and decline of family-owned banks in Hong Kong.

Family-owned banks in Hong Kong have a long history, ranging from 50 years to as many as more than a century, and have been operated by family owners for many generations. The rise and decline of family-owned banks in Hong Kong is a reflection of the city’s economic changes. Since Hong Kong’s colonial days, family-owned banks have contributed vastly to the city’s economic development.

In an interview with The People’s Daily《人民日報》, Kevin Au, Associate Professor of Department of Management and Director of Centre for Family Business at The Chinese University of Hong Kong (CUHK) Business School, points out that the banking sector plays a pivotal role in Hong Kong’s financial success. However, foreign banks were not friendly to local Chinese enterprises and tended to maintain business with only foreign enterprises in the past. As such, banks owned by Chinese families played an important role in filling the gap by providing services to local Chinese enterprises. This role was particularly crucial to the trading and manufacturing sectors.

Simon Lee, Senior Lecturer of School of Accountancy and Co-director of Integrated BBA Programme at CUHK Business School, echoes in an interview with The People’s Daily that the special business environment in Hong Kong fostered the emergence of family-owned banks in Hong Kong. He adds that these banks ran their business based on relationships (人情) with their family business clients established over time with the many generations of owners.

Prof. Au says that the most distinct advantage of family-owned banks is that their owners are relatively more cautious in making business decisions because they have the mentality of sustaining their business. Their founders can also share their management experience with their successors to ensure a good reputation and stable customer base.

However, Lee indicates that family-owned banks in Hong Kong are facing fierce market competitions from their foreign counterparts. Large banking groups provide more diversified banking services and investment products compared with those small and medium-sized family-owned banks in Hong Kong… Read More (PDF)

The People’s Daily article has been widely picked up by more than 36 Mainland Chinese media outlets, including Xinhuanet, NetEase, Sina, China News Service, iFeng.com, Economic Daily, Sichuan Newsnet, Xinmin.cn, Dayoo.com, Cnfol.com, Nanjing Daily, etc.

This article is available in Chinese only. Please click the image below to view the article in the print edition of The People’s Daily.

Source: The People’s Daily
Date published: 13 October, 2014

Photo: Bloomberg News