HongkongBank, the largest network in the region

A tourist to Jakarta curiously observed: "I have never seen so many banks in one city." This observation leads one to ponder on the factors which tip the scales on the choice of a particular bank. Primarily, the choice rests on stability and customer service -- a friendly smile, coupled with efficiency.

HongkongBank's emphasis on customer service and serving a country according to its needs has largely contributed to its success in Indonesia.

HongkongBank is best recognized by its symbols - two imposing lions Stephen and Stitt, named after its Shanghai office managers during the period 1920 to 1924. It is also represented by a distinctive hexagon abstract device, consisting of four isosceles triangles of equal size and dimension.

To those not familiar with HongkongBank's long and established heritage, it may appear as a bank of Chinese origin. However, it was founded in 1865, in Hong Kong and Shanghai, to serve the needs of merchants of the China coast and finance the growing trade between China, Europe and the United States.

Philip Holberton, Chief Executive Officer of HongkongBank Indonesia, remarked that, though the name may suggest otherwise, it has a history and heritage based on sound Scottish banking principles.

At the time, there was a general feeling among the local business leaders that their interests would be better served by a bank operated locally. However, a colonial bank, requiring limited liability, could incorporate either under a Royal charter, conforming to Colonial Banking Regulations, or under British banking legislation, with its head office in Britain.

This would have defeated the purpose, and on representations, the Treasury agreed to incorporation under a special Hong Kong ordinance, complying with the Colonial Banking Regulations, which resulted in the formation of the present Hong Kong and Shanghai Banking Corporation (HSBC) in 1866.

One of the distinctive features of the group, Holberton said, was its slogan "Fast decisions. Worldwide." Each unit in the group maintains a close relationship with its customers and is capable of making fast decisions on financing requirements.

The HSBC Group, one of the world's largest financial services organizations, has over 3,000 offices in 67 countries and assets of more than 201 billion. Other principal members of HSBC include: Midland Bank plc, Hang Seng Bank Limited, Marine Midland Bank, HongkongBank of Canada, HongkongBank Malaysia Berhad, The British Bank of the Middle East, HongkongBank of Australia Limited, Wardley Group, James Capel Group, Samuel Montagu & Co. Limited, HSBC Asset Management Group, Trinkaus & Burkhardt, HSBC Securities, Inc., Equator Bank Limited, HSBC Insurance Holdings Limited and Forward Trust Group Limited.

Holberton emphasized that the group's formula for success was adopting the right strategy to satisfy the aspirations of its customers.

HongkongBank is a wholly owned subsidiary of HSBC Holdings plc, the holding company of the HSBC Group, which has its headquarters in London. Today, HongkongBank and its subsidiary companies serve an international customer base and provide a wide range of retail banking, commercial banking, and related financial services through 535 offices in 19 Asian countries, and 40 offices in 9 other countries in the world. It employs more than 32,000 people and its consolidated assets are in the range of HK$ 1.079 billion.

HongkongBank services include retail banking, corporate banking, trade services, treasury, securities custody and private banking and trustee services. Its main subsidiaries are Carlingford Gibbs Holdings Limited, Hang Seng Bank Limited, HongkongBank of Australia Limited, Wardley Holdings Limited, Wayfoong Finance Limited and Wayfoong Mortgage And Finance (Singapore) Limited.

HongkongBank - Indonesia

In 1884, HongkongBank opened its first branch in Jakarta, largely as a result of a crisis in the sugar trade. Prior to this, the bank was represented in Indonesia for almost 20 years through various trading companies, who were appointed as agents.

As Surabaya gained importance as a center for sugar trade, the Surabaya branch was established in 1896, while an agency was maintained in Semarang as early as 1878. Apart from the sugar trade, the bank was involved in homeward remittances by Chinese settlers to their families in China, and financing the requirements of Anglo-Dutch plantations.

HongkongBank in Indonesia is able to draw on the considerable expertise and capability within the broad spectrum of financial services offered by the group. It provides its clients in Indonesia with accurate trade and credit information, to enable facilitate contact with reliable exporters and importers in overseas countries.

It also offers complete services in international trade, ranging from straightforward current account and normal banking facilities, to more complex requirements of mercantile trade and capital investment to Indonesian corporate and individual customers. In addition, a full dealing service in foreign exchange is available to Indonesian companies and institutions in all major international currencies. Through its international network, Speedlink (the bank's own communications satellite network connecting all major offices), and SWIFT (the Society for Worldwide Interbank Financial Telecommunications), the latest prices and trends are promptly obtained.

Holberton said that the focus here is three fold, namely "corporate driven, trade finance and consumer finance." However, he added, that "with the economic growth emerging in the upper levels, there is a need to complement our existing package by expanding the scope of retail banking." To maintain a "balance in business is healthy," he said.

Expansion of HongkongBank's activities would "largely depend on deregulation in the financial services market," Holberton said. He feels the banking climate in Indonesia compares favorably with other developing countries like the Philippines and Thailand. He also said that though expansion would largely depend on bank capital and related foreign policy, immediate plans are underway to open branches in two areas of Ujung Pandang and Denpasar. Other branch offices in Jakarta may also be a possibility.

With its increased activities, there would be an automatic impact on human resources and availability of job opportunities. The bank focuses its attention on business and management training as it is convinced that "communities can only progress and prosper if the people within them have the necessary knowledge and skills."

Statistically, HongkongBank had a 40.94 percent increase in assets in 1994 as compared to 1993, while the profits showed a 70.44 percent increase during the same period. This places HongkongBank in a favorable position vis-a-vis other foreign banks in Indonesia.

HongkongBank and the Environment

HongkongBank recognizes that sound business management must take into account the effects of its businesses on the environment. The bank supports practical measures and policies which will help to protect and improve the environment.

Its policy incorporates environmental considerations into the credit and risk assessment of its customers and expects its borrowers to comply with environmental requirements. It encourages an awareness of environmental factors in its customers and supports projects demonstrating a feasibility of maintaining a balance between economic growth and environmental protection. It has supported Operation Wallacea, a Rp 700 billion project in South East Sulawesi, consisting of a bird survey in Buton island and a survey of coral reefs around the Tukang Besi islands.

(Sheila Natesan)