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2021 | Book

Introduction Read chapter Read first chapter

Seng Heng Bank

History and Acquisition by Industrial and Commercial Bank of China

Authors: Patrick W.M. Huen, Jean Jinghan Chen, Ming-Hua Liu

Publisher: Springer Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book examines the success story of Seng Heng Bank (SHB), the successful acquisition of SHB by Industrial and Commercial Bank of China (ICBC), and the continuing sound management and performance of ICBC (Macau). It shows how a loss-making small bank grew into one of the best banks in Macao and highlights the achievement, awards, and recognition of SHB. The authors detail the SHB acquisition process by ICBC, the biggest bank in the world in terms of total assets. They identify the main contributing factors for the success of SHB and draw conclusions and implications for bank managers in the region and beyond. This book will be of interest to finance professionals and business scholars.

Table of Contents

Frontmatter
Chapter 1. Introduction
Abstract
Chapter 1 is the introduction of the book. It briefly describes the history of Macao, Seng Heng Bank, and ICBC. It analyzes the importance of banking in the context of Macao and outlines the structure of the book.
Patrick W. M. Huen, Jean Jinghan Chen, Ming-Hua Liu
Chapter 2. Macao’s Economy and Banking Industry
Abstract
Chapter 2 describes the economic environment in Macao, the gaming and tourism industry of Macao as well as the structure of the banking industry in Macao. The economy is dominated by gaming and the banks in Macao mainly engage in commercial banking. With no capital markets in Macao, the financial system is dominated by banks.
Patrick W. M. Huen, Jean Jinghan Chen, Ming-Hua Liu
Chapter 3. Seng Heng Bank (1972–2007)
Abstract
Chapter 3 describes the origin of Seng Heng Bank, its business model, expansion strategy, and its corporate governance. We examine its past financial performance and consider its strengths, weaknesses, opportunities and threats prior to the acquisition by ICBC. SHB grew from a loss-making bank into one of the best banks in Macau, performing very well in bad times as well as good. It had received many awards and achieved an impressive rate of return to shareholders of over 21% per year over the 20-year period.
Patrick W. M. Huen, Jean Jinghan Chen, Ming-Hua Liu
Chapter 4. ICBC
Abstract
Chapter 4 provides a brief history of ICBC and examines its business model, expansion strategy, corporate governance, and its financial performance. ICBC is the largest bank in the world in terms of total assets, with operations in about 50 countries. It is listed in both Hong Kong and Shanghai stock exchanges and has been winner of numerous awards.
Patrick W. M. Huen, Jean Jinghan Chen, Ming-Hua Liu
Chapter 5. Acquisition of Seng Heng Bank by ICBC
Abstract
Chapter 5 examines what made the acquisition of SHB by ICBC possible and how the deal was made. We also analyse the post-acquisition financial performance of ICBC (Macau). In 2007, ICBC made an offer to buy a stake of approximately 80% of SHB at a price equivalent to more than three times SHB’s net asset value (NAV) which was very high by industry standard. The acquisition was a success as ICBC (Macau) has performed very well since the acquisition.
Patrick W. M. Huen, Jean Jinghan Chen, Ming-Hua Liu
Chapter 6. Conclusions
Abstract
Chapter 6 examines the acquisition in the context of the developments in the Macao banking industry since the acquisition and identifies the main factors behind the enduring success of SHB and the lessons we can learn from it. Successful factors include a favourable external economic environment in Macao, strong corporate governance and business ethics, sound risk management, international expansion strategy, adoption of state-of-art of computer system, and emphasis on staff development and training.
Patrick W. M. Huen, Jean Jinghan Chen, Ming-Hua Liu
Backmatter
Metadata
Title
Seng Heng Bank
Authors
Patrick W.M. Huen
Jean Jinghan Chen
Ming-Hua Liu
Copyright Year
2021
Publisher
Springer Singapore
Electronic ISBN
978-981-16-0398-3
Print ISBN
978-981-16-0397-6
DOI
https://doi.org/10.1007/978-981-16-0398-3