Chapter 354: Make plans early
Hang Lung Bank was run by depositors in 1982 and was placed under the administration of the Hong Kong government in 1983. The subsequent impact was relatively large in the financial history of Hong Kong.

Later, when many mainland economists studied the process before and after the establishment of Hong Kong's financial center, the Hang Lung incident must have been mentioned repeatedly.

Is there something wrong with Hang Lung Bank itself? Of course there is!

At least its management was absolutely negligent in risk control.

But this is not unique to Hang Lung Bank. Many banks in Hong Kong, including British and foreign banks, have engaged in illegal lending.

When the global economy is improving and Hong Kong, as a financial center, also benefits from it, the local stock market, property market and land market will naturally prosper.

At this time, everyone was actively borrowing money, and Hang Lung Bank was foolish enough to tighten its credit.

Therefore, the biggest reason why Hang Lung Bank was eventually taken over by the Hong Kong government and sold to Singapore capital was the influence of macroeconomic factors.

Under the dual impact of the global economic crisis and the US dollar interest rate hike, Hong Kong's exports decreased, private investment and external hot money decreased, leading to weakness in the three major investment markets.

The most typical example is the housing market!

Foreign exports have been hit, Hong Kong citizens' income has decreased, consumption desire has declined, the desire to buy houses has decreased, the housing market has cooled, housing prices have fallen, and citizens' desire to buy houses has decreased again. Real estate companies' capital chain has broken, lending banks or financial companies have bad debts, and banks have insufficient reserves. Finally, they are unable to cope with depositor runs.

Hang Lung Bank lent a loan of HK$8 million to Didi Finance with very little collateral. Didi Finance was dragged into bankruptcy after the Iron Lady's fall caused the collapse of the Hong Kong property market. The HK$8 million directly became the bank's bad debt, which directly led to Hang Lung's insolvency and being taken over by the Hong Kong government.

Of course, it is only the beginning of September, but it is an indisputable fact that Hang Lung Bank’s illegal borrowing has led to insufficient reserves.

Therefore, the bold actions of Hang Lung’s management gave Fang Hexuan, the giant crocodile, an excellent opportunity.

Moreover, even if he did not take action at this time, Hang Lung would not be able to overcome bankruptcy. Rather than being controlled by British banks or sold to Singaporean capital, it would be better for it to be taken over by himself.

The reason why Hong Kong deserves the title of financial center is mainly due to the support of banks from three countries, namely British banks HSBC, Standard Chartered and Barclays, American banks Bank of America, Citigroup, Wells Fargo and American Express, and Chinese banks Bank of China and Communications.

It’s not that banks in other countries have no contribution, but Hong Kong is most influenced by banks from the UK, the US and the Mainland.

As for the local Hong Kong-funded banks, they are basically insignificant.

Even the once most famous Hang Seng Bank was acquired by HSBC long ago.

Later, only the Bank of East Asia became more famous in Hong Kong, and the others were mostly family banks, just small businesses!

According to later financial data, by the end of 1988, there were 27 Hong Kong-funded banks registered in Hong Kong, of which 20 were partially owned or controlled by foreign capital, 2 were taken over by the Hong Kong government, and another 3 had their licenses revoked in 1989. By 1993, there were only 9 Hong Kong-funded banks left, and most of them were partially owned by foreign capital.

From this we can see that even if Fang Hexuan did not take action, the final fate of Hang Lung and other Hong Kong-funded banks would not be much better.

In this case, he doesn't bother to care about the criticism from the outside world. Even if it hurts his reputation, he will never hesitate when it comes to taking action!

Even though he has a good relationship with HSBC, Citibank and Bank of America now, in a few years, it will definitely be these foreign banks with which he once cooperated who will stab him in the back.

Since the outcome is already determined, Fang Hexuan must of course prepare for the future and build his own financial system.

Moreover, having your own bank is necessary in many ways.

First, Alphabet will definitely be a giant multinational diversified group company in the future, and the capital flow involved may be hundreds of billions or even trillions of dollars. Having its own bank can save a lot of financial fees. Second, since Alphabet is committed to developing high-tech, it will definitely compete with American high-tech companies in the future. It is almost inevitable that it will be targeted or even suppressed by the United States. Having its own financial payment system can reduce many risks of leaks.

Of course, it doesn’t mean that everything will be fine if you have your own bank, but if you don’t have it, it will be more troublesome.

In the past two years, although Fang Hexuan was rich, he was not in a hurry to establish a bank, nor did he want to immediately destroy his relationship with HSBC.

But with the fall of the Iron Lady at the end of this month, the Hong Kong stock market, housing market and land market will collapse, which will cause liquidity crises in many local banks. This is a rare opportunity for Fang Hexuan and he cannot miss it.

Acquiring Hang Lung Bank shares in the secondary market is no longer about the quantity, but about gaining the right to have a say on the board of directors.

As for depositing 20 billion Hong Kong dollars into this bank, Fang Hexuan was not worried about throwing away the dog with a meat bun.

He had not deposited the money for long. If the management of Hang Lung really spent all the money, then he could do whatever he wanted with the bank.

Apart from anything else, Hang Lung has more than 20 branches in Hong Kong and can simply use the surname Fang in the future.

In addition, the financial companies that Hang Lung borrowed from, such as Dali Financial, can also be directly controlled by him, and ultimately, they are real estate companies.

Since these companies are unable to repay their debts, they can use the real estate or land they have to pay off the debts.

To put it bluntly, with the 20 billion, Fang Hexuan can not only acquire a bank, but also indirectly control a large number of cheap high-quality assets. No matter how you look at it, he will not lose out!

The result was pretty much what he expected!
When Fang Hexuan asked his men to take the deposit slips to various branches of Hang Lung to withdraw money, the management of the bank became very uneasy.

On the one hand, they hurriedly transported cash from the head office to various branches for emergency response, and on the other hand, they sent people to visit the Global Building.

Four people came from Hang Lung, led by General Manager and Director Zhuang Rongkun. Fang Hexuan received them in his office.

Zhuang Rongkun put down his unfinished coffee and said anxiously:

"Mr. Fang, I'm here on behalf of the board of directors. I hope you can give me some time. Everyone at Hang Lung will be very grateful!"

Fang Hexuan looked at the other person with a smile, but cursed in his heart.

"Damn it, PUA is coming to me!"

He already regarded this guy as an idiot and didn't want to waste any more time talking to him.

"Haha, if I remember correctly, 20 billion Hong Kong dollars was deposited into your bank on the last day of last month. It's only been a few days and you're out of money?"

Zhuang Rongkun paused when he heard this, and felt inexplicably bitter in his heart.

"Mr. Fang, please believe in the strength of Hang Lung. We will definitely be able to return the funds in full."

Fang Hexuan was too lazy to pretend, he sneered and said unhappily:
"If you were really capable, you wouldn't beg me, right?"

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(End of this chapter)