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ICBC (Macau) Established by Merging Its Banking Institutions
 
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On July 30, 2009, the Opening Ceremony of the Industrial and Commercial Bank of China (Macau) Limited (referred to as ICBC (Macau) hereinafter) was held in Macau. The official establishment of ICBC (Macau) marks a new historic stage for the development of ICBC in Macau. Those who attended the ceremony include Edmund Ho Hau-wah, Chief Executive of Macau SAR, Gao Yan, vice director of the Liaison Office of the Central People's Government in Macao, and Jiang Jianqing, president of ICBC.

Building the flagship in Macau's financial world

ICBC (Macau) is established from the merger of two previous banking institutions in Macau, namely the ICBC Macau Branch and Seng Heng Bank. The newborn ICBC (Macau) holds the full banking license issued by the Monetary Authority of Macau, and holds 14 branches, 3 sub-companies and over 500 employees. With its total assets of approximately 50 billion MOP, ICBC (Macau) ranks the largest of all locally registered banks and the second largest of all the 27 banks in Macau, becoming the leading competitor in Macau's financial market. As for the incorporation, ICBC has transferred all its Macau Branch's assets, liabilities and rights and obligations of all business to Seng Heng Bank, changed its name into ICBC (Macau), and holds 89.331% of the new bank's shares. With the merger completed, ICBC has not only realized its brand integration and advantage complement in co-ordination in Macau, but has also broadened its market space and fields of business in this region, thus increased its power of influence and competitiveness.

According to inside sources of this industry, the successful incorporation of ICBC's institutions in Macau is resulted from its continuous implementation of international development strategy, which, furthermore, demonstrates the strategic significance of its previous purchase of Seng Heng Bank and elevates the strategic value of buying a local bank. As ICBC (Macau) moves from establishment to function, the new flagship institution abroad of ICBC is bound to exhibit excellent competitive power.

Jiang Jianqing, president of ICBC, remarks that ICBC will fully support the development of ICBC (Macau). And next, relying on ICBC's advantages in network, brand, finance and technology and its own geological effect in Macau, ICBC (Macau) will try to become the financial bridge that connects Macau with the mainland, Hong Kong and the world, and thus better plays its part in serving all customers.

Designing carefully for long-term development

ICBC (Macau) stands as another successful case of overseas development of domestic enterprises. Judging the entire process, ICBC arranged its institutions in Macau in a very clear way. It firstly broke the ground by founding new branches, and then purchased the local ones at a proper time, and finally enhanced its value and competitive power by merging. Stationing its parts through new establishments and purchases and subsequently integrating its cultures, management and business with great efforts, ICBC has developed its small branch into the second largest commercial bank in Macau within only 6 years, and has realized the leading role in the region's financial market.

In May, 2003, ICBC successfully set up its branch in Macau, and entered officially into the market. Over the 6 years, ICBC has, on the one hand, seized the opportunity of the healthy and rapid development of Macau's economy, and expanded its business with great endeavor. As a result, the former Macau Branch has grown at percentages of two digits for 5 consecutive years, with its growth rates of total assets, deposits, loans, non-interest income and compound annual growth of return reaching 82%, 101%, 99%, 80% and 121% respectively. In the first half of this year, Macau Branch has gained a net profit of 3,560,000 USD, and services like the bank card clearing and international settlement have taken the lead. On the other hand, seen as an opportune move, ICBC successfully acquired Seng Heng Bank, the second largest bank in Macau, in Jan, 2008, realizing a big leap of its business development. After joining ICBC, Seng Heng Bank has maintained a good momentum for development; even in the globally unstable year of 2008, it endured the impact of the financial crisis and made a satisfactory achievement of 214 million MOP of profit after tax. In the first half of 2009, Seng Heng Bank has made 225 MOP of profit after tax, increasing 31,620,000 MOP or 16% compared with the same period last year. And now ICBC Macau Branch and Seng Heng Bank have merged, which improves the arrangement of ICBC's institutions in Macau and also serves as the solid basis for long-term development in the market.

Rooted in Macau and integrating into local society

In the eyes of local Macau people, ICBC (Macau) seems, not a bit, like a foreign bank, because this bank is indeed very "local"—registered in Macau and with only 30 or so among the total 500 employees from the mainland. Take the financial services provided by ICBC (Macau) as another instance, which ranges from savings and deposit, personal check, payroll payment, agent mass utilities collection, agent social security collection, credit card, to services of tertiary education loan, auto loan, housing mortgage loan, and to services of securities, funds, insurance and wealth management, that is, from the ordinary services that every citizen needs, to services for personal development and properties, and to the services of citizens' investment and financing.

The successful rooting of ICBC in Macau is, on one hand, indebted to Mr. Stanley Ho Hung-sun and Mr. Patrick Huen Wing-ming, who were the main shareholders of Seng Heng Bank have contributed greatly to the purchase and the merger; and on the other, the clear strategy of localization has also paid off. As an old employee working with Seng Heng for 18 years, the vice president Zheng Yonghui has witnessed one year of efforts that ICBC tried to integrate into the local society. He vividly recalls the day that Seng Heng has just been handed over to ICBC, "Everyone was worried in the beginning that things might get incompatible when the new main shareholder came. However, after the managerial team of ICBC settled, we found that they were every respectful to us, and often asked for our opinions. Then everybody felt relieved and assured. " Even more to Zheng's surprise, against the background of the global financial crisis, ICBC made its promise of no active layoff and sincerely wished employees to stay on their posts. Over one year, the separation rate of Seng Heng's employees is lower than previous years, and local employees keep increasing. More importantly, ICBC pays special attention to prompting the function of local employees, tries to build a working environment of mutual help and improvement, and encourages employees to expand the local business. Zheng Yonghui says to the correspondent, "This has moved us very much. Our worry in the beginning has now turned into confidence in ICBC, and we have more vigor and passion for work now. "

It is with the hard work of the local employees that ICBC soon moves on the right track, relying on the support of the government of Macau, SAR and other shareholders of Seng Heng Bank. There was no loss of regular customers; moreover, some important local customers have been attracted, which indicates a full integration of ICBC into Macau society. In the process of the merger of ICBC Macau Branch and Seng Heng Bank, China Banking Regulatory Commission and the Monetary Authority of Macau have offered enormous support. And also, the previous shareholders and employees of Seng Heng have contributed greatly, in that the employees took only one week to complete the changing of the identification signs of all banking outlets so that ICBC (Macau) can open for business on July, 11.

Increasing the value through integration

In the overseas development of commercial banks, integration is utterly important, and the crucial point of the entire strategy. ICBC has successfully solved the problem of integration after the purchase, by way of highly effective integration of cultures, management of business, information technology systems and other aspects, and has led Seng Heng Bank quickly into the globally-oriented development system of the bank.

Following the purchase of Seng Heng Bank, ICBC referred to successful experiences of previous purchases and mergers, and immediately selected professional talents who had global visions from domestic and overseas institutions, and assigned them into the board and management in order to plan and impel the integration after the purchase. They have accordingly applied their advanced techniques and experience to the management of Seng Heng Bank, and significantly enhanced the level. For instance, with rich experience in the management of housing mortgage loans, ICBC helped Seng Heng Bank establish the system of the monthly meeting for risk analysis, in order to make deep analysis of the trend in Macau's real estate market. The analysis selected some representative symbolic real estate properties of different areas and prices, and conducted follow-up quantitative research on them. The analysis can help adjust the amount limits and approval limits of mortgage loans of properties, which effectively controls risk and guarantees service efficiency.

Besides the transmitting of management experience, ICBC's improvement and integration of Seng Heng Bank's information technology system are revolutionary. The overseas core business platform FOVA, of advanced world standards and developed by ICBC independently, has been put into production in Seng Heng. This has made Seng Heng realize the automation and modernization of all its business processing, and as well propels all its business and management to integrate into the overall system of the ICBC Group. The brand new system platform has also improved the service capacity of Seng Heng Bank, and provided technical support for its advantages in customer relationship management, risk management, RMB clearing, trade settlement and other services. And these advantages will be made all the more prominent after the purchase. For example, the "E-Age Card" and "Elite Club Card" have incorporated the functions of the "JETCO Card" of Seng Heng Bank and the "Unionpay Card" of ICBC, that is, the card-holders can withdraw on JETCO ATMs in Macau and can also consume through Unionpay POS terminals in the mainland, Hong Kong and Macau. This service gives great convenience to those who often travel between the mainland and Macau, and has been warmly welcomed.

Cooperating in expanding business and increasing in vigor

This series of successful integrations soon produces cooperative effect, which elevates the competitive power of Seng Heng Bank and largely expands its market space and business fields. As a bank of 37 years' history and an excellent local brand, Seng Heng Bank, after joining the ICBC family for one year, passed its running-in period stably and is now more dynamic than ever.

Corresponding with the development trend of economic diversity of Macau, Seng Heng Bank, after the purchase, relies on ICBC's brand and resource advantage over the globe and expands its business in the mainland, Hong Kong, Southeast Asia and other surrounding areas, besides deepening its local business. With the support of ICBC, Seng Heng Bank makes full use of ICBC's domestic and overseas branches, and has made advantageous co-operations in trade financing, syndicated loan, investment banking, personal foreign currency pre-settlement, credit card acquiring business, Unionpay clearing, cash management and so on. In 2008, through the cooperation with ICBC Shenzhen Branch in the marketing of the Overseas Chinese Town (OCT) Group, Shenzhen, Seng Heng Bank successfully financed 425 million HKD for OCT, Hong Kong, and it was the first transaction of Overseas Loan under Domestic Guarantee business between Seng Heng and mainland banks. Subsequently, Seng Heng Bank continues expands its co-operation with mainland branches, providing financial support for sub-companies of mainland flagship enterprises in Hong Kong and Macau, and has gained mainland customers of good quality. In the first season of this year, Seng Heng Bank has established close business relationship with 10 commercial banks in Hong Kong, participated actively in the syndicated loan of Cheung Kong (Holdings) Limited, Sun Hung Kai Properties Limited, China Resources Gas (Holdings) Limited, Beijing Enterprises Holdings Limited, and Shanghai Industrial Investment (Holding) Co., Ltd, with loans amounting to 1450 million HKD, and took part in the international syndicated loan of two Australian companies—Woolworth and Woodsite, in the cooperation with ICBC Sydney Branch. The loans of Woolworth from Seng Heng and ICBC Sydney Branch amounted to 70 million USD, the largest amount of loans in the syndicated loan. In the meantime, Seng Heng also pays special attention to the business and services of Macau and Portuguese-speaking countries.

The linkage with the mother bank and other institutions of ICBC allows Seng Heng Bank to further its expansion of good customers and the range of its business market, which also helps it to be known and acknowledged by more customers. And this builds a solid basis for the long-term development of Seng Heng Bank.

Jiang Jianqing, president of ICBC, remarks at the ceremony that ICBC (Macau) will make full use of the successful integration. According to the developing strategy of "Based on Macau, Reaching the mainland, Expanding to the surroundings and Extending to Portuguese-speaking countries", ICBC (Macau) will speed up its development of business, deepen its linkage with domestic and overseas branches, enhance its business performance, and continue to improve the service network, and elevate the brand image and market status. At the same time, ICBC (Macau) will be more rooted in Macau, continue to improve the services for infrastructures, key projects, social welfare and the local residents, according to the planning of the SAR government, and will facilitate the economic restructuring and structural adjustment of Macau, in order to make due contributions to support the economic development and social prosperity of Macau SAR.


(2009-08-03)
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