‘Honkers and Shankers’ banking new business

Press, 15 September 1986, Page 18

‘Honkers and Shankers’ banking new business

By

GRAHAM EARNSHAW,

of Reuter, in Shanghai

The bronze British lions which guarded the entrance to the Hongkong and Shanghai Bank’s office in Shanghai have gone and the building is occupied by the Shanghai Communist Party committee. But the major Asian bank still has the right to include Shanghai in its name — it has retained an office in China’s largest city inspite of the Communist takeover in 1949 and the political storms which have swept over Shanghai since. The office now takes up only two floors of a nondescript building in a Shanghai back street which was once the German consulate. It is a far cry from the granite and marble opulence of the old headquarters on the city’s riverfront thoroughfare, which used to be the most potent symbol of British power in China. When they marched into the city, the communists threw out nearly all of the hundreds of foreign firms there, but four banks were allowed to stay — the Hongkong and Shanghai Bank, the Chartered (now the Standard Chartered) Bank, the Bank of East Asia and the Over-sea-Chinese Bank. The communists forced the banks to scale down their operations drastically, and for 30 years

until 1979, the expatriate managers were virtually held hostage, forbidden from leaving the city until a replacement arrived. The communists apparently feared that the banks would try to close down the operations when its representative was out of the country. ' > In the old China, the “Honkers and Shankers” was probably the biggest and best-known financial institution in the country. “We still get enquiries about business transacted before 1949, former depositors or their relatives wanting to tie up their affairs,” the bank’s present Shanghai manager, Christopher Page told Reuters. Among the loose ends to be tied up are the contents of many safe deposit boxes, left behind by people who fled Shanghai before the communists arrived, never to return. The unclaimed items include antiques, mostly valuable porcelain. “I don’t know what will happen to them,” said Mr Page. ’’They can’t be exported and we can’t sell them because they were left in the safe custody of the bank.” He said the antiques, including some priceless historical treasures, could ‘not even be loaned to a Shanghai museum for display. ~

“We couldn’t lend them out — whoever deposited the antiques still has the right to them,” he said. The bank occupied its original plush premises until 1956, although its 300-odd employees had virtually nothing to do. Then all the bank’s assets in China were taken over by the authorities “in payment of pre-liberation deposits.” The bronze lions outside the bank, replicas of the stern British beasts which still sit outside the bank’s office in Hong Kong, were removed. The bank does not know where they are, but according to one report they re-appeared for a day several years ago when a State film company was making a movie about old Shanghai.

After 30 years of marking time, the Shanghai branches of foreign banks are now making profits again thanks to the opendoor policy .of China’s present leader Deng Xiaoping.

The growth rate, if not the volume of business, provides an echo of the days when Shanghai was a haven for capitalist buccaneers — Mr Page said turnover in his branch increased 600 per cent between December, 1984, and July this year.