Friday, February 18, 2005

how to measure the size of the banks?

Yesterday, Amy was busying shopping with a Chinese friend, who has come to Hong Kong for the second time. Just when Amy was proud of the business knowledge she had learned in the new place, the friend asked: "How many banks in Hong Kong".

That's a pretty hard question to Amy, though her major interest in the business class is "banking". Amy is a hard-working girl, so she went back to search. She checked the statistics from the government, saying that the number of the licensed bank at the end of 2003 is 133, the restricted licensed bank(the former so-called "licensed deposit-taking company" is 41, and the deposit taking company(the former so-called "registered deposit-taking company" is 39.

But Amy could only find a list of 80 banks in Hong Kong with their contacting numbers. Then the question came to the mind: How about their ranking list?

HSBC is the largest bank incorporated in Hong Kong, officially said its website.

Hang Seng bank and Bank of China(Hong Kong) are competing for the second place, while the first announced that "it is the second-largest listed bank in Hong Kong in terms of market capitalisation". BOC(Hong Kong) is comparatively low profile, saying it is a leading commercial banking group in Hong Kong in terms of assets and customer deposits. A former report from People's daily confirmed that BOC(Hong Kong) is the second largest bank in Hong Kong in terms of assets.

It is hard to say who is in the fourth place. Standard Chartered Bank(HK) said that it was one of the three note-issuing banks besides HSBC and BOC, but is reluctant to tell its rank. While the unlinkable South China Morning Post reported that Bank of East Asia is the fourth largest, the modest bank said that it is only the largest independent local bank in Hong Kong.

So it seems that we can't simply rank the local banks without "in terms of".

In the reporting season, the Bank of East Asia is the first to report the annual result, with earnings growth of 26.1 per cent for last year, which was seen as the good sign of the coming results from the Hong Kong banks. Standard Chartered has unveiled the higher-than-expected result this Wednesday, which helped boosting the banking shares. At the same day, index heavyweight HSBC Holdings plc, due to report its full-year results eleven days later, rose 0.38 percent to retest a seven-week high of HK$133.50 first reached on Wednesday, contributing the blue-chip index closed at 14,017.23 points after hitting an intra-day high of 14,043.94, its highest level since January 4.

The Hang Seng bank will release the result the same day with its parent HSBC, while BOC(HK)'s report date couldn't be found on its website.

While Hong Kong market is celebrating for the bullish bank share, Standard Chartered suffered with a 1.2 percent fall in the UK market yesterday, as analysts said its shares looked overvalued.

8 comments:

無塵工作室 said...

Amy:

mmm...if you want to find out more about individual banks' information such as market cap etc, you can try websites that gives you stock quotes, sometimes they have report on such things; alternatively, you can goto www.HKEX.com (Hong Kong Exchanges and Clearing Limited) to look at information or annual reports released by the companies themselves, but it will sure be hardwork indeed working out the details.

To my best knowledge, I haven't yet seen any 'official' list that ranks the banks in Hong Kong yet; Financial Times in UK compiled a list of the 1000 top banks in the world, but I'm not sure how many Hong Kong banks will fit into that though.

What 'ranking & names' banks choose to give themselves can be misleading (if not deceiving) sometimes, but one possible indicator is to look at the number of retail banks that are on the high street now, but this isn't very good, as there are also investment banks with no retail branches, and some are private banks and therefore hard to get hold of.

:)

無塵工作室 said...

Also, thank you for reminding me it's that time of the year (end of year report) again, I have been puzzled lately by the defiance of global trends that the HSI had shown in the last few days.^^

Amy or koala said...

HSI has been really bullish since the beginning of the new year. Most of the annual reports show that HK economy is back to normal, but it may be unbiased because the time they based on, that is last year, is quite special because of SARS.

Victor said...

Hi Amy,

To find more banks' info, you can visit the HKMA (http://www.info.gov.hk/hkma/eng/statistics/msb/index.htm), the de-facto central bank in HK

Following Citigroup, HSBC (HKEX:5) is the second largest banking group in the world (in terms of market cap); of course it is the biggest bank in the world.

For your information, it weighs around a third of the Hang Seng Index. Hang Seng Bank (11) and BOC (HK) (2388) accounts for around 5% and 4% of the HSI respectively. The Bank of East Asia (23), however, has little impact on the movement of the HSI, representing less than 1% of the index.

On top of these four constituents, there are also some listed banks in HK, including Wing Lung Bank (96), Wing Hang Bank (302), Dah Sing Bank (2356; its parent: 440), Liu Chong Hing Bank (1111), IBA (636, soon-to-be renamed), StanChart (2888), CIFH (183), and ICBC (Asia) (349).

For more information, you can visit HKEX's website. (http://www.hkex.com.hk/invest/index.asp?id=company/profilemenu_page_e.asp)

BTW, I think the HSI is less representative for the local economy, as HSBC, China Mobile (941), and Hutchison (13) -- three leading members represents nearly half of the index -- are not purely local companies. Additionally, the index always is a lagging indicator of the economy -- say by 6 to 9 months. As such, improving economy, which mostly benefits the retail sector, does not necessarily translate into a better economy and hence the index. Just my 2 cents.

Amy or koala said...

Thanks, Victor, your "2 cents" is a great help. It's a shame that I missed the HKMA website at the first time. For the HSI, I agree that it is less representive for the local economy. Instead, it may represent much more of the HK and mainland economy. But I can't quite understand the stockmarket is a lagging indicator. Forgive me my little knowledge about the economic theory. But from the daily trade, it seems that investors and trader always betting the economy on the stockmarket. For instance, the foreign investors were betting a recover Japanese economy via placing large orders for big name firms, which help boost the Nikkei shares average these days. The conclusion should be the stockmarket is a leading incicator of the economy, isn't it?

Victor said...

Hi Amy,

oh yes, you are right, I made a mistake here. The stock market should be a leading indicator of a economy.

Amy or koala said...

But you know much more than me, Victor. Thanks for your sharing. Could you share me more, directly on the blog or via email, that why your blog is null?:)

Victor said...

Nice meeting you. Sorry, I don't have time to set up a blog yet.

My email is victoruh@gmail.com, you can contact me if you like.