Very Calculated Risks

In hilly Hong Kong, prestige is often a function of height: the socially elect live on "the Peak." and down below, in the central business district, a company's importance is apt to be judged by how tall its headquarters building is. Latest entrant in Hong Kong's corporate prestige race is the Hang Seng (Eternal Growth) Bank, which last week opened a 22-story building that is even taller than the Peking-controlled Bank of China--which was deliberately built a few feet higher than the British-run Hong Kong & Shanghai Bank. Resplendent with Venetian mosaics and bulletproof glass counters, the new Hang Seng building is an aluminum-and-glass monument to the ability of Chinese businessmen to ride out shifting political tides. In 30 tumultuous years. Hang Seng has grown from a modest gold changer with capital of $21,000 to Hong Kong's biggest Chinese-owned bank, with assets of $63 million.*

All That Glitters. Now a major factor in the financing of Hong Kong's foreign trade. Hang Seng each year handles exchange transactions involving $200 million in U.S. currency. At the same time, many of its clients are Southeast Asian businessmen who are free to do business with Red China. (Since Hang Seng deals with the U.S., it cannot itself, under U.S. Treasury regulations, have dollar dealings with Peking.) Through a maze of companies as intricate as an ancient Chinese ivory carving. Hang Seng's chiefs move quickly in and out of speculations in everything from autos and duck feathers to rice and real estate. Smiles one Hang Seng executive: "Our ventures are calculated, very calculated risks."

Hang Seng inherited this credo from its founder, the late B. Y. ("Big") Lin, who used a shrewd sense of timing and a quiet cadre of agents to "influence" the gyrating gold markets in Canton and Shanghai during the 19305. Lin cashed in when refugees from the Japanese invasion of China flocked to Hong Kong to change their Chinese folding money for gold. When the Japanese occupied Hong Kong. Hang Seng deftly resettled in unoccupied Macao; it moved back to Hong Kong right after the war. then profited from another rush for gold as the Communists swept down into central China from their northern redoubt. But when the Reds finally took over the entire mainland, the gold market lost much of its luster and Hang Seng looked elsewhere.

Mutual Aid. The bank's new direction was set by current Chairman S. H. (for Sieng Heng) Ho, 62. Spotting the success Western banks were having by talking about "your friendly banker." Ho began to woo the small savers who had been overlooked by the older banks in Hong Kong. Like Tammany ward heelers in the 1870s, Hang Seng men greeted incoming refugees, helped to straighten out their visa and legal problems and to find them homes. Today, Hang Seng sometimes seems to be one big Chinese mutual aid society devoted to sending mourners to its clients' funerals and helping clients' children choose the proper Western university from a Hang Seng-published catalogue. But it also offers more solid inducements. Hang Seng stays open at least an hour later than other Hong Kong banks and pays its 110,000 depositors higher interest than its rivals offer.

Compared with British banks. Hang Seng also charges higher rates on its loans (1% per month to prime borrowers). But few complain about its charges because Hang Seng backs many struggling entrepreneurs--reportedly including Hong Kong's bookies--who find it difficult to get credit elsewhere. Hang Seng figures that it will prosper so long as Hong Kong does. Fingering an abacus behind his 8-ft.-long teak desk. Chairman Ho says: "Hong Kong's future is good for at least ten years, possibly 20." After that. Hang Seng will doubtless be the first to find another green pasture.

* Which still leaves it substantially smaller than the Hong Kong & Shanghai Bank and the British-run Chartered Bank of London.

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