Changes in Asian banking industry

Abstract

Changes in banking industry can be observed from different perspectives, one of which is the phenomenon of mergers and acquisitions (M&As). M&A is a highly abstract and compact concept, especially in the case of banking industry. When it comes to the Asian banking industry, currently impacts of China's WTO entry on its banking industry has become a very hot topic. In our study, we take two acquisitions that came through in Hong Kong to kick off the research. The study of two acquisitions involves looking at the two largest commercial banks, from Singapore and China, operating in Hong Kong, and leads to the comparative study on banking industry in the two freest economies and the largest emerging economy in the world, namely, Hong Kong, Singapore and China. We are looking for motives and causes for the acquisitions, under the context of the current trend of the world banking industry, and given the sharp differences in size, the structure and regulations of our three target economies. This decides the nature of our studies as being comparative study. We have found, due to different reasons, that Singapore banks and Chinese banks all feel pressure and are looking for something that cannot be found in their home market. Chinese banks are looking for professionally international banking practice, international network, talented people and capital source. Singapore banks are seeking bigger size in terms of scale and scope, better profitability and promising future markets. Hong Kong, as one of major international financial centers, has offered what they are really looking for. Indeed, this kind of `demanding and supplying' relationship has evolved over time and will bring out further changes and lead to the rise of big players in the industry.