Asia's 49th-largest commercial lender in assets is also the region's third most profitable financial institution. Normally you have a trade-off between a safe balance sheet with low returns, and one loaded with a lot of risky assets but producing higher profits. Hang Seng is making available will go to borrowers in China and Hong Kong firms doing business there. The bank opened its first branch in Guangzhou last December and has applied to upgrade its Shanghai representative office to full-service status.
Smaller banks generate new products at a faster rate than larger players.
And everyone is getting ready for China's resumption of governance over Hong Kong on July 1 next year. It's a key sector that must be well managed right through the handover. All the banks are aware of that. Some consider Hang Seng as laboring under something of a handicap. Rumors have repeatedly circulated that HSBC would sell Hang Seng to the Bank of China, supposedly to curry favor with Beijing.