HONG KONG: Bank of East Asia (BEA), which has the most extensive network among overseas lenders on the mainland, aims to get up to 40 percent of full-year earnings from the region, hoping its corporate banking business will be back on the growth track in the second half of the year.

BEA, which has 71 outlets on the mainland, said operating profit fell to HK$731 million from HK$842 million in the area, as non-interest income declined 35 percent to HK$184 million in the first half.

The Hong Kong-based bank took a "conservative approach" to lending on the mainland, even as local rivals doled out record amounts of advances to preserve asset quality, Chairman David Li said at a press conference yesterday.

His son Brian Li, the bank's deputy chief executive officer (CEO), said BEA is "confident" that it will post a "slight" increase in second-half profit on the mainland.

"We are optimistic about loan growth on the mainland in the second half," Brian Li said. "Both quality and quantity are looking good." Bank of East Asia aims to get 35 percent to 40 percent of full-year earnings from the mainland, he said.

During the first half of 2009, BEA China Ltd, the bank's mainland operation, added a total of four new sub-branches, in Xi'an, Beijing, Guangzhou and Shanghai, and one 24-hour self-service banking centre, in Shanghai.

BEA China also continued its aggressive campaign to extend service coverage through the installation of new automatic teller machines (ATM). BEA China's ATM network stood at 288 as of 30th June, up from 250 at the end of 2008, the bank said.

BEA China was selected in June by China UnionPay, the country's largest bank-card network, to issue a commemorative credit card to mark the 60th anniversary of the People's Republic of China.

BEA, the first foreign lender to issue debit cards on the mainland, last month raised 4 billion yuan ($586 million) in Hong Kong selling bonds denominated in the currency for the first time. The bank is "still studying" a mainland stock listing, Brian Li said, adding that one option would be to spin off its mainland business.

The bank agreed to acquire the Taiwan wealth management business of AIG Group, the US insurance giant striving to raise capital to pay off government bailouts.

With the completion of the acquisition, BEA has just re-launched the business under the new name BEA Wealth Management Services (Taiwan) Limited. It will provide a wide range of wealth management services, including securities brokerage, wealth management, insurance brokerage and securities investment consultancy service for high net worth clients, the bank said in a statement.

(HK Edition 08/26/2009 page4)