HongkongBank, the largest network in the region

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)