Ties That Bind - Bay Area Council Economic Institute

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Ties That Bind
seven-day banking at many branches; trilingual ethnic Chinese staff (Mandarin, Cantonese, English)
and bilingual Chinese/English brochures and ATM access; and assistance with social security
numbers, driver’s licenses and tax preparation.
In 1998 First Pacific’s Indonesian owners came under financial pressure to sell United Savings as
a result of the 1997 Asian economic crisis. Wu, by then president and CEO, led a management
buyout. United Savings’ charter was changed from that of a savings and loan to a commercial
bank, and it was taken public as United Commercial Bank.
Wu next broadened UCB’s strategy to include trade finance. Specifically, Southern California was
the leading U.S. gateway for trade with Asia, yet no Chinese-focused bank had a presence in both
California and Asia to serve trade finance customers. UCB opened a representative office in
Hong Kong in 2002, and a short time later received Hong Kong Monetary Authority approval
for a full banking license. At the end of March 2006 UCB’s Hong Kong branch had over
US$600 million in deposits and US$400 million in loan commitments. The bank has subsequently
added to its Asia trade finance and private banking coverage with representative offices
in Taipei and Shenzhen.
UCB has expanded its U.S. branch network through a combination of organic growth and acquisitions
in New York, Boston and Seattle, along with the 2002 purchase of the historic Bank of
Canton in San Francisco. Of its 56 U.S. branches, 47 are in California and 27 are in the Bay Area.
Today, UCB’s mix of commercial, real estate, construction and international trade finance is targeted
at small and mid-sized businesses, with loans in the $500,000 to $20 million range. UCB
reported $7.99 billion in assets as of March 31, 2006, and has set a growth target of $15 billion in
assets in 2010.
Other Bay Area banks are expanding their trade finance activity, with Greater China as their
principal focus. Bank of the Orient was opened in San Francisco in 1971 by Ernest Go, member
of an overseas Chinese family in the Philippines with international banking interests. Its first
downtown office bridged the adjoining neighborhoods of Chinatown and the city’s financial district,
and catered to what Go saw as an underserved market of Asian-American small and medium-sized
businesses. A Chinatown branch opened a year later. The bank’s business expanded
over the years with a strong mortgage portfolio in one of the nation’s most consistently expensive
residential real estate markets.
Bank of the Orient’s growth strategy has primarily involved community banking in Chinatowns
or Asian-American population centers in San Francisco, Oakland, Millbrae and City of Industry
in Southern California. In 2000 it opened two Honolulu branches with the acquisition of the
Bank of Honolulu.
In 1986 Bank of the Orient upgraded a representative office in Xiamen, a port city and designated
Special Economic Zone directly across from Taiwan, to full branch status. Xiamen, one of
China’s wealthiest cities in terms of per capita GDP, has attracted significant international trade,
investment and tourism in the past decade, and the Fujian provincial government has further
economic and infrastructure development plans along the entire western coast of the Taiwan