HONG KONG: Bank of East Asia Ltd (BEA), the largest family-run bank listed in Hong Kong, has embarked on a cost-cutting effort that is to see the lender close all of its securities unit’s branches and shed about 180 jobs.
The bank will shut East Asia Securities Co’s 22 retail outlets in Hong Kong by July 8, BEA said yesterday in an e-mailed statement.
Following a review of its businesses, the lender plans to seek to streamline its operations through various means including automation, it said.
The resulting job cuts account for 3.8 percent of the bank’s employees in Hong Kong, the company said.
Electronic and telephone trading facilitates more than 90 percent of the securities unit’s transactions and the business will continue to provide services through those channels, BEA said.
Maintaining retail outlets to provide trading services has become very costly and there is a duplication of resources in securities business operations between the brokerage and the bank, it said.
The firm’s streamlining effort is poised to reduce its cost-to-income ratio, which rose to 57 percent last year from 54 percent a year earlier. The bank introduced a headcount freeze in February as it reported a 17 percent decline in last year’s profit amid higher bad loans in China.
Billionaire Paul Singer’s Elliott Management Corp has in recent months called on Bank of East Asia to consider selling itself to deliver “proper value” to shareholders, a demand that the Hong Kong bank has rejected.
The New York-based firm has accused BEA chairman and former politician David Li and his board of mismanagement and improperly representing shareholder interests.
