Wed, Aug 16, 2006 - Page 12 News List

HSBC says it is set to beat Citigroup

By Amber Chung  /  STAFF REPORTER

HSBC Holdings Plc, the world's largest bank by assets, is expected to overtake Citigroup Inc to become the largest foreign lender in Taiwan's corporate banking sector, the bank said yesterday.

HSBC said it will double revenue by the end of next year.

"We could achieve our target by doubling our revenue of commercial banking business in August or September next year compared with 2004, before next year ends," Kenneth Cheng (鄭克家), head of HSBC's commercial banking for the Greater China area (Taiwan), told a press conference yesterday.

The company's goal is built upon expectations for a robust second half of this year, after booming business since last year, Cheng said.

First-half revenue of HSBC's commercial banking business in Taiwan grew 33 percent from a year ago, beating targets by 8 percentage points, according to HSBC. The London-based bank declined to give figures.

The Taiwan unit generated NT$400 million (US$12.2 million) of profits in the meantime, up 134 percent year-on-year, according to the bank.

"We expect to outrival Citibank next year, becoming the largest foreign lender by revenue in commercial banking in Taiwan's market," said John Lee (李建業), the head of the small and medium enterprises (SME) team with HSBC's commercial banking unit in Taiwan.

Heavyweight client lineups include Lite-On Group (光寶集團), chipset maker VIA Technologies Inc (威盛電子) and smart phone manufacturer High Tech Computer Corp (宏達電), according to the bank.

As a large number of Taiwanese companies have been expanding overseas, HSBC's deep roots and big networks in Hong Kong and China equip them with a strong competitive edge, Cheng said.

HSBC is the largest foreign lender in China, with 13 branches across the country and the No.1 bank in Hong Kong, where it flourishes with more than 50 percent of the market share, according to the bank.

Hong Kong and China have become Taiwan's largest investment destinations, with cumulative inflows exceeding US$50 billion in the past 15 years, according to data from the Investment Commission.

"The business [of serving overseas Taiwanese companies] is so booming that we can hardly catch up," Cheng said.

HSBC has established Taiwan desks in branches in Hong Kong and China and needs to add more than two dozen employees to serve Taiwanese business clients in those two markets, he said.

Similarly, Taiwanese banks are refocusing on corporate banking after experiencing a storm of bad consumer debts since the middle of last year, which has aggravated a price war and narrowed lenders' margins.

Yet, shrinking margins did not seem to bother HSBC, as Cheng said that, besides traditional and competitive lending business, the bank is offering value-added services such as money management and trading to boost income.

Meanwhile, Fubon Financial Holding Co (富邦金控) said earlier this week that it would continue to beef up its corporate banking business and has seen decent growth in corporate lending.

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