David Li Kwok-po will step down as chief executive of Bank of East Asia on July 1, the latest in a wave of a generation of local tycoons to retire.
Li, who turned 80 in March, will remain the executive chairman of the century-old bank. His sons Adrian David Li Man-kiu and Brian David Li Man-bun will take over as co-chief executives, the bank said in a stock exchange filing on Thursday.
“I have worked half a century, and am now 80 years old,” the elder Li said in a telephone interview with the South China Morning Post, after the bank’s announcement. “The future strategy of the bank will be in the hands of the younger generation.”
Like his fellow Hong Kong tycoons Li Ka-shing of CK Hutchison and Lee Shau-kee of Henderson Land, Li is stepping back to facilitate the smooth continuation of his banking empire, which spans more than 200 branches globally and representative offices with 10,000 staff members.
Other tycoons also in the succession process include “King of Gambling” Stanley Ho Hung-sun, Kerry Properties’ Robert Kuok, Shui On Land’s Vincent Lo Hong-shui, as well as Dickson Concepts’ Dickson Poon.
Li is also stepping back at a time of tremendous change in banking, and in Hong Kong’s role with regard to mainland China.
The city’s monetary authority has handed out eight virtual banking licences since March to catch up with China and Japan in letting technology disrupt traditional banking with its bricks-and-mortar branches. More licences are likely to follow.
“I believe they will continue to develop [and grow] the China business, and invest more in digital banking,” Li said of his two sons. “They are not new to the bank. One has worked here for 18 years, while the other has worked here for 16 years. They are ready to succeed as chief executives. I am confident they can lead the bank to growth, and develop it to become bigger and better.”
Li, the third-generation scion of the family that founded Hong Kong’s first Chinese-owned bank, traces his roots to Jiangmen city in Guangdong province, now a city within the “Greater Bay Area” cluster. He received his early education in Britain, studying economics and law at the University of Cambridge. He has been Bank of East Asia’s chief executive since 1981.
Knighted in 1991 by the queen of England before Hong Kong returned to Chinese rule, Li has had an active political life. He was a member of the city’s colonial-era Legislative Council since 1985, continuing as a representative of the financial industry in the postcolonial period until 2012.
He was spared an interview by Hong Kong’s Independent Commission Against Corruption (ICAC) during the corruption buster’s 44-month bribery investigation of Hong Kong’s former chief executive, Donald Tsang. Li was never implicated in the case.
Adrian, 45, the elder of David Li’s two sons, said he would work with his younger brother, 44-year-old Brian, to invest more in technology and the Greater Bay Area in future. The brothers have been deputy chief executives at the bank since 2009.
“Brian and I will work together, closely. I will focus on the Hong Kong business while Brian will focus on China and international business. We will jointly oversee risk management, legal, finance and strategic planning matters,” Adrian told the Post in a telephone interview.
Adrian said he would follow in the footsteps of his father, whom he described as a “dedicated and visionary” man who had contributed 50 years to the bank and led it by example.
“In the near term, we will spend at least HK$1 billion [US$127.4 million] per year on IT and digital banking solutions, including fintech and mobile, to reduce operating costs and enhance customer experience,” Adrian said.
The Greater Bay Area will be a focus region for expansion. “We have 33 branches in Guangdong, four in Macau and 70 in Hong Kong. We have a strong network to serve private, corporate and retail customers in the region,” Adrian said.
Brian said in a written statement to the Post: “We will continue to invest in digitalising our operations, further BEA China’s branch optimisation, ongoing retail transformation and expand our client base to better position the bank in the long term.”
Michael Wu, senior equity analyst at Morningstar Investment Management Asia, said David Li’s retirement will not have a big impact on the bank.
“Both Adrian and Brian have been operating the bank for some time, and we do not expect any changes to the strategy of the bank,” Wu said.
Bank of East Asia was cut from the Hang Seng Index last year after a 34-year stay with the benchmark.
Shares in the lender, which was incorporated in Hong Kong in 1918, have fallen 25 per cent over the past year, while the gauge has dropped about 10 per cent. None of the 11 analysts tracked by Bloomberg who follow Bank of East Asia have buy ratings on the stock. Six recommend investors sell and the rest rate it as a hold, giving the bank a consensus rating of 1.91 out of 5, the lowest among the Bloomberg Asia-Pacific Banks Index’s 63 members.
In an interview last year when the bank marked the centenary of its founding , Li said he would remain active in managing the lender until he turned 82, at least.
More from South China Morning Post:
- Bank of East Asia profit up 3 per cent in 2018, misses analysts’ forecasts
- Lee Shau-kee, Hong Kong’s second-richest man, says he is mulling retirement to hand the reins of Henderson Land to his two sons
- Billionaire Li Ka-shing retires, hands corporate empire's reins to elder son Victor