Hong Kong banker takes advantage of opportunities offered by mainland parent company

Breadth of experience is a prerequisite for any executive tasked with leading a bank through a period of significant change. Equally essential is the vision to innovate and inspire, the drive to execute plans, and the ability to get the best out of others.

Felton Lau Wai-man ticks all these boxes and, as chief executive of Chong Hing Bank (CHB), is now engaged on a series of reforms and initiatives that will draw on the full range of his talents.

In large part, the transformation now taking place stems from the acquisition of a majority stake in CHB by Yue Xiu Group, a Guangzhou-based state-owned enterprise, in February 2014.

For what was previously a family controlled bank known for its fairly conservative approach, that move has opened up new opportunities and a greater interest in considering options for expansion. Another consequence has been to afford Lau a heightened profile in the industry, with the chance to address different types of business challenges and build an organisation offering more comprehensive services, additional investment products, and a wider geographical footprint.

It is something for which he is well prepared, having spent more than 25 years with CHB since joining in 1988 as chief auditor. Prior experience with a major accountancy firm and a Dutch-headquartered international bank had provided an excellent grounding. A subsequent spell as head of CHB’s retail banking operations taught him the ins and outs of everything from compliance and back-office procedures to credit, loans and making money for the bank.

Later responsibilities as a director and deputy CEO marked a steady progression and paved the way for his appointment as chief executive in 2013.

Besides the usual imperatives of increasing profitability and meeting regulatory requirements, Lau’s current role entails a number of clearly defined objectives. One is to add to the network of branches in Guangdong at a steady pace over the next three years. A second, closely tied to that, is to expand the customer base in South China through the efforts of a larger sales team and the help of referrals from the Yue Xiu Group and its partners.

A third is to provide a platform for mainland-based entities to make strategic investments in Hong Kong and overseas. And another, with a view to achieving a sensible balance, is to work towards a rough 50/50 split of business between local and mainland clients.

“As a priority, the bank needs to maintain stability and be risk-conscious at all times. But, along with that, the board of directors has asked me to explore opportunities, expand the business, and develop the talent to sustain future growth and improve co-ordination between our Hong Kong and Mainland China operations,” says Lau, whose academic qualifications include a law degree and an MBA.

So, while the basic culture will not change, the focus will. Declining loan demand and intense competition mean prospects in Hong Kong are circumscribed. In contrast, the untapped potential of the mainland market, with enterprises ready to borrow and individuals keen to invest, presents a quite different picture.

“There, we can expand in a more ‘aggressive’ way,” Lau says. “For example, we are able to target industries and businesses, such as alternative energy and information technology, which suit our risk appetite and which need structured loans in compliance with PRC and Hong Kong regulations.”

Mindful of the mainland policy encouraging leading enterprises to “go out” and find opportunities abroad, Lau is also looking to develop more investment products and offer financing options for possible acquisitions. To this end, he has led the bank in setting up a new China business department, strengthening its compliance function, restructuring its sales team and recruiting more senior specialists.

Lau is also placing new emphasis on long-term planning, as well as on the monthly analysis of concrete achievements and results. In this respect, the key measure is “real business”, not just discussions, prospects or promises. Innovative ideas are welcomed, provided they fit in with necessary rules and frameworks.

Individuals also have greater freedom to develop business across different areas than the working environments at certain larger institutions would allow. And newcomers are made aware that they are joining an organisation that offers a very good future and which holds the unique position as being the first local Hong Kong bank to be acquired by a non-banking mainland entity.

“Essentially, we are in a people business and everyone agrees that having the right people is the most important thing for sustained growth,” says Lau, who is also a vice president of the Council of the Hong Kong Institute of Bankers (HKIB). “Therefore, training and talent development is very important for us and, more generally, for upholding Hong Kong’s success as an international financial centre.”

Exemplifying that principle, Lau has applied himself throughout his career to constant self-improvement. Early on, this included distance-learning programmes and short courses overseas to round out his professional knowledge.

Lately, it has involved playing an active part in influential industry bodies in the banking and accountancy sectors and attending events such as the “2014 Mainland Economics and Finance Elite Seminar for Hong Kong Banking Executives”, organised by HKIB. Held in October 2014 in Langfang, a city just south of Beijing, this event brought together 68 leading figures representing 38 banks and regulators to discuss policies and developments likely to have a significant impact on the financial landscape in the mainland and beyond.

By focusing on practical topics, such high-powered get-togethers help Lau to determine what CHB will need to prepare for and adapt to in the next couple of years. This has a direct bearing on everything from people and technology to premises, branch networks, evolving customer expectations – and profitability.

At one level, it can mean considering the prospects for new RMB-linked products in response to obvious investor demand and the gradual moves toward internationalisation of the currency. At another, it might relate to the need for enhanced online banking facilities, particularly in the mainland, where things look set to snowball.

“For the China market, web-based penetration is essential,” Lau says. “The infrastructure has to be user-friendly and secure, and we have to make it more ‘human’ to help people change over from the standard kinds of banking transaction.”

This push for wider use of IT is similarly important in improving internal communication and general efficiencies. For instance, CHB has developed a lot of tools for its personal banking department and it encourages employees to use WeChat groups to discuss things such as market strategies, good HKIB courses to attend, and interesting items of mainland banking news.

When reflecting on the key steps in his career to date, Lau is quick to credit the colleagues who so willingly shared their knowledge and experience.

He also highlights his good fortune in having had so many opportunities come his way. “I’ve been lucky – I’ve always been a pioneer doing something new or dealing with products which were ‘hot’ at the time,” he says.

“But when you do something new, you must also be ready to ‘give up’ your past achievements – in effect, starting everything again from scratch – and welcome whatever the next challenge brings.”