Hong Kong BEA Chairman: Increase In Banking Charges Inevitable
March 29, 2001 1:19 AM
HONG KONG -(Dow Jones)- Hong Kong banks will have no choice but to introduce service charges in light of the upcoming interest rate deregulation, said Bank of East Asia (H.BEA) Chairman David Li.
Speaking after the bank's annual general meeting, Li said local banks will face an increasingly competitive business environment after they lose the power to set interest rates as a cartel on Jul.1.
"I think all banks will be chasing after deposits...all banks are looking at ways to enlarge their deposit base and customer base," he said, adding banks that have not implemented new charges will have to "decide whether they can afford not to charge, and how long they will be able to hold off."
Rival bank Standard Chartered Bank (O.SCB) had earlier this year introduced charges on customers whose balance falls below the bank's minimum requirement.
However, Li said the Bank of East Asia doesn't have immediate plans to impose new charges.
"We will look at HSBC, Bank of China, and other banks...before we reach a decision," he said.
Li also said he is looking at ways to integrate the newly acquired First Pacific Bank and United Chinese Bank into the Bank of East Asia in the most effective manner.
Separately, Li said he has "100% confidence" in Pacific Century CyberWorks Ltd. (PCW), which posted a net loss of HK$6.91 billion late Wednesday.
The bank was the major lender in the bridge loan PCCW took to finance its acquisition of Cable & Wireless HKT Telephone Ltd.
"The company has gotten rid of all possible poor investments, and should have a good foundation to rebuild itself," he said.
He declined to say whether the bank is willing to make new loans to fund any future acquisition plans PCCW may have, saying it would depend on the terms the company offers.
-By Marco Wan, Dow Jones Newswires; 852-2802-7002; marco.wan@dowjones.com
-0- 29/03/01 06-05G
(This story was originally published by Dow Jones Newswires)
Copyright (c) 2001 Dow Jones & Company, Inc.
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