In the early 2000s, Hong Kong experienced a harsh economic downturn triggered by the Asian financial crisis of 1997 and the dotcom bubble burst. With Hong Kong’s economy struggling, John Kam, an employee at The Bank of East Asia (BEA) there, saw an opportunity and requested a transfer to mainland China. 

He first moved to the bank’s branch in Xian in Shaanxi province – which sharply contrasted with Hong Kong. ‘In Xian, a lot of places in the town centre had no street lights at night,’ he remembers. ‘The place was full of dust and sand, and was really polluted because of coal burning for heating.’

Today, Kam is general manager and zone manager of BEA China’s Shenzhen branch, taking charge of scores of branches in the Pearl River Delta. He directly manages the businesses of 14 sub-branches, including in Huizhou, Dongguan and Shantou, and the coaching of almost 500 staff. 

As well as meeting clients with his staff, Kam provides financing solutions to various types of enterprises and takes charge of myriad business matters. These include business planning, operation management, team building and distribution of resources among branches, as well as communicating with regulators. As zone manager, Kam also has to oversee three other regions – Guangxi, Zhuhai and Jiangxi – providing assistance to their business operations. 

Armed with unique insights into China’s economic development and abundant knowledge of domestic and overseas finance markets, he has achieved much during his 15 years at BEA China, from turning the Xian branch into the largest foreign bank in western and central China to helping grow the number of branches in the region. ‘When I first came to China, BEA had just seven branches across the border. Now, we have more than 120,’ he says. In 2010, Kam was honoured for his outstanding contribution by Shaanxi’s provincial government. 

In his role, he faces regular challenges. The issue of most concern to him currently is tackling rising bad debts, caused by the economic slowdown in China. ‘Bad debts started to appear in Pearl River Delta last year, and it has worsened this year,’ he says. Some of these come from property development clients, which lost rental income due to closures of factories and wholesale enterprises. ‘The rise of e-commerce, affecting the business of wholesalers and retailers, is another trigger,’ he adds. 

The recession in the wholesale and retail sectors has also rubbed salt in the wound of the manufacturing industry, already struggling with high tax, reduced exports, rising wages and fierce competition from neighbouring countries.  

To tackle the problem, Kam is focusing on exploring new business opportunities, including tapping into the services industry, which has come to dominate China’s economy during the industrial slowdown. ‘We will increase our business proportion in services and high-tech sectors,’ he says.

Kam is also targeting the emerging industries of environmental technology and public utilities, as well as exploring ways to open up the internet finance market, which is gathering momentum in China. ‘You can do a lot with the internet, including online lending, wealth management and WeChat payment,’ he says, adding that his bank has recently become the first foreign bank to join the latter. 

Early beginnings

Kam’s interest in accounting began as a teenager. ‘At that time, it was very common for people to learn typing and book-keeping, so I learned a bit about book-keeping then,’ he recalls. In 1996, after majoring in economics as part of his Bachelor’s degree in social science at the Chinese University of Hong Kong, he joined an asset management company where he prepared economic analysis for fund managers. In 1997, he joined BEA as a senior officer in its China division, then based in Hong Kong, where his role was to develop a general ledger system for use in China. He was then promoted to marketing manager in 2000. »

A turning point came in 2001 when he was transferred to China to help establish a branch in Xian – the first foreign bank in north-western China. Kam first worked as head of accounting, setting up accounting systems, later taking charge of other areas including the cash department and front office. In 2005, he was appointed deputy general manager and was tasked with handling the marketing function. 

A career milestone came in 2006 when he was promoted to general manager of the Xian branch. It was then that he started to witness the business boom in China. ‘In 2008 and 2009, business opportunities were all over the place,’ he says. ‘People had a strong desire to invest, and there was so much business, so much money.’ 

In 2011, he also became zone manager of western China, taking charge of all branches in Chongqing, Chengdu and Wulumuqi. Over the years, he has grown the Xian branch’s level of deposit from less than RMB1bn in 2006 to RMB8bn in 2012. It is now the biggest foreign bank in central and western China. In 2012, he was appointed general manager of the Shenzhen branch and zone manager of BEA China, taking charge of Shenzhen, Guangxi, Zhuhai and Jiangxi, the position he holds today. 

Banking reform

Kam has witnessed a number of changes in the banking sector. One is the banking reform that has led to the relaxation of control of foreign banks by the mainland government. In the early 2000s, foreign banks were subject to many restrictions; they could only conduct foreign currency business and were banned from serving mainland Chinese clients. ‘Since 2007, banks have been allowed to provide corporate banking services; this meant we could serve mainland Chinese clients,’ Kam explains. 

Aiming to boost the role of markets in a state-run banking industry, the Chinese government also cancelled the limits on the duration of loans, as well as the caps for interest rates for loans and deposits. Recently, China has also scrapped a two-decade-old rule that limited bank loans to 75% of their deposits. This applies to all types of banks. The liberation, Kam says, is a good thing as it will increase competition and prevent mainland banks from earning excessive profits. ‘Now the market is basically free,’ he says, adding that, like other foreign banks, BEA China can provide a versatile range of banking and financial services to local residents and businesses, including wealth management, mortgages, insurance and funds. 

Kam, however, is now faced with growing competition from local banks, especially new ones. ‘These new banks are extremely competitive and are really flexible,’ Kam says, adding that the strong competition has limited the market share of foreign banks at 2%; he points out that many new banks are able to react quickly to regulatory changes, enabling them to retain their competitive edge. 

To ensure that his bank stays competitive, Kam says that his strategy is to find niche markets, such as crossborder services. Now he is directing his bank to shift to guarantee overseas fundraising. 

‘We have our strong banking network in Hong Kong, something the new Chinese banks don’t have. We act as guarantor for mainland companies to raise funds from Hong Kong,’ he says, adding that the bank will issue letters of credit for the enterprises to borrow money from an overseas bank for mergers and investments abroad.

Kam has also designed a highly popular working capital loan for jewellery franchises established in Shenzhen in recent years, including Luk Fook and Chow Tai Fook from Hong Kong. ‘The franchise company likes our concept as we can provide financing to their franchisees,’ he says. ‘We do not require collateral as their jewellery is highly liquidable,’ he says, adding that he has provided loans to almost 30 franchisees so far.

Prudent management style

Kam adopts a prudent management style in running his branches, ensuring that they do not rely solely on financial statements in approving loans for small to medium enterprises. ‘We will use the company’s other records to check their trustworthiness,’ Kam says. 

To protect their customers, the bank has also adopted a stringent process to approve products sold in its branches. Kam has adopted a proactive approach through monitoring and education. ‘We strengthened our monitoring of staff, and also increased education for both employees and customers,’ he says. 

Kam says that ACCA has been a vital part of his training and progression in the profession. Encouraged by his university professor, he started studying with ACCA in 1997. He passed all 14 papers with high marks and gained his Qualification in 2002.

‘The paper on corporate and business law has helped me a lot as we often come across legal issues working in a bank,’ says. ‘The auditing paper has helped me a lot, such as teaching me what is dual control and segregation of duties, and how to inspect financial statements,’ he says, adding that the knowledge of options pricing also helps him.

ACCA, he says, trains people to become well-rounded professionals. ‘ACCA gave me a very solid foundation for my career,’ he says. Since obtaining the ACCA Qualification, Kam has continued with other studies, obtaining an MBA from the UK’s University of Manchester in 2010. 

Asked about the secret to his success, Kam, a father of two, says that he does everything with his heart, and has built team spirit by motivating his staff and treating them with great respect. His other success factor is his dedication to helping clients, especially during the tough times.

‘If we don’t approve loans to enterprises because we are scared of risks or we demand needy clients to repay the loan, we are forcing them to the death road,’ he says. ‘I feel satisfied that I could help out some enterprises during my career, help them develop, and help China’s economic development.’

Sherry Lee, journalist