Ho Hong Bank

The Ho Hong Bank (1917–1932) was a Malayan bank, established to provide banking services that, until 1912, were solely delivered by European banks.^[1] The bank was founded in 1917 and in 1932 merged with two other banks in Singapore to form the Oversea-Chinese Banking Corporation .

Ho Hong's roots: The Chinese Commercial Bank

The founders of Ho Hong Bank were Lim Peng Siang, Dr. Lim Boon Keng and Seow Poh Leng, all of whom were, before that time, founding members and officers of the earlier Chinese Commercial Bank.

On 17 August 1912, a largely attended meeting of Hokkiens, shareholders of the then proposed Chinese Commercial Bank Ltd., was held at the Chinese Chamber of Commerce in Hill Street, presided over by Lee Choon Guan. The assembled elected its first directors: Lim Peng-Siang, Lee Choon-Guan, Tan Kah-Kee, Dr. S. C. Yin, Yeo Cheng-Hai, Seet Tiong-Wah, Seow Eng-Tin, Chia Yew-Siang, Tan Sian-Cheng, the Hon. Tan Jiak-Kim (CMG), Liao Chia-Hong, and Tan Chay-Yan. The meeting decided to register the company with a nominal (authorised) capital of $4 million. At that time the issued capital of $2 million had been over-subscribed. The temporary premises of the bank was at No. 61 Kling Street and Seow Poh-Leng was pro. tem. Secretary.^[2] The bank commenced business at temporary premises at No. 31 Market Street on 2 December 1912, with Lim CHoon-Guan as Chairman, Lim Peng-Siang as both Deputy Chairman and Managing Director, Seow Eng-Tin as Manager and Seow Poh-Leng continuing as pro. tem. Secretary. By this time the Board of Directors comprised, besides Choon-Guan, Peng-Siang, and Eng-Tin, Tan Jiak-Kim, Liao Chia-Heng, Tan Chay-Yan, Yeo Cheng-Hai, Dr. Lim Boon Keng, Teo Soon-Sian, Dr. S. C. Yin, Tau Siau-Cheng, Seow Eng-Tin, and Cheoh Cheng-Kee.^[3]

The first year of the bank (2 December 1912 – 15 October 1913) had, despite the commercial depression and many other difficulties, produced a profit of $84,742.03, $30,000 of which was moved to general reserve, $10,000 to reserve for bad and doubtful debts and $44,742.08 carried forward. At that time the value of the bank's property had appreciated and the bank was considering opening a branch at Penang.^[4]

In November 1913, following continual withdrawals for about a week amounting to up to $700,000, a notice was posted on the door of the Kwong Yik Banking Company's premises at Kling Street informing the public that there had been a run on the bank and the bank was unable to meet its liabilities at that time. The Chinese Commercial Bank's position, at the time, was considered to have been on sound footing.^[5][6][7]

To allay public fears, the Chinese Commercial Bank, in the form of a letter dated 16 December 1913 from Secretary Seow Poh-Leng to the Editor of the Straits Times, wrote, "I notice a short paragraph in your issue of last Saturday to the effect that there has been a feeling of uneasiness in regard to the Chinese banks generally in Singapore and tat in consequence many Chinese merchants have transferred their business from Chinese banks to European banks. I beg to state that these statements are not applicable to the Chinese Commercial Bank." Poh-Leng went on to note that the Chinese Commercial Bank had, far from experiencing any loss of business, had improved its turnover - the turnover of business between 20 November 1913 when the uneasiness began and 13 December, exceeded the turnover of the same number of days previously, by 25% and correspondingly customers also increased by more than 26%.^[8]

In March 1914, Secretary Seow Poh Leng reported that a general meeting of shareholders of the Chinese Commercial Bank, Limited had been held on 10 March 1914 at 64 Kling Street to elect new Directors. Shareholders present were Chairman Lee Choon Guan, Lim Peng Siang (by proxy), Cheo Cheng Kee, Tan Sian Cheng, Tan Siau Chin, Seow Eng Tin, Khoo Yang Tin, Lim Nee Soon, Khoo Kok Wah, Oei Teck Seng (by proxy), Gaw Khek Kean, Yap Tai Pow, Ching Chwee Phuan, Lau Teng Leng, Lim Boon Kuay, Chua Twa Suah, Tan Kah Seang, Tan Yan Kheam, Syn Boon Keong, Yap Toon Jin, Chew Lian Poh, Lam Cheok Lock, Cheo Lay Tee, Tan Tian Chye, Chia Yew Siang Tan Chian, Tan Cheng Siang, Lee Cheng Cheow, Lew Hong Sek, Lee Jim Lee, Tan Teng Cheong, Yeo Hock Hoe, Soh Siang Phuan, Lim Teck Seong (by proxy), Lee Chan Chong (by proxy), Khoo Cheng Oh, Yap Cheng Swee and Seow Poh Leng, representing in all 8,180 shares. A poll was conducted and the 12 members with the highest votes were elected Directors - Lim Peng Siang (7,420), Lee Choon Guan (6,640), Lim Nee Soon (6,520), Lim Boon Keng (6,340), Seow Eng Tin (5,580), Tan Sian Cheng (5,340), Yeo Cheng Hai (5,160), Tan CHay Yan (4,640), Tan Jiak Kim (4,470), Tan Kah Kee (4,420), Gaw Khek Khean (4,390) and Lew Hong Sek (4,240).^[9][10] Lim Choon Guan was made Chairman, Dr. Lim Boon Keng made Vice Chairman and Lim Peng Siang was made Managing Director, with Yeoh Cheng Hai as Acting Managing Director in his absence, Seow Eng Tin as Manager and Seow Poh Leng as Secretary and Assistant Manager.^[11]

in August 1914 there was a run on the Chinese Commercial Bank when $260,000 was drawn over the counter on Tuesday 4 August 1914. Dr. Lim Boon Keng arranged an interview with Sir Arthur Henderson Young (1854–1938), Governor of the Straits Settlements. Before the interview, Seow Poh Leng was called on to produce a balance sheet within 48 hours, which he did, after which he fell from sheer exhaustion. A notice, ordered by Sir Arthur, was published in the Staits Times of 7 August where the bank informed the public, "Owing to a run on the Chinese Commercial Bank, Limited, the directors have had to request the assistance of Government, and the latter has promised to help pending an examination into the accounts of the bank." By order of the Colonial Secretary, the bank was closed during the examination.^[12][13]

On 27 August 1914, Secretary Seow Poh Leng had a notice published in the major newspapers, informing the public of a Government proclamation, dated 26 August and published at the bank, "Maxwell, acting Colonial Secretary, Straits Settlements, issues this Proclamation for general information. The Government has examined thoroughly the accounts of the Chinese Commercial Bank and finds that its assets exceed the liabilities. The present trouble is partly due to the fact that many traders are hoarding their money instead of paying it into the bank. The Government now allows the shareholders of the bank to raise ready money; if no cash can be raised then they must make a call on the unpaid capital to meet this emergency. If the bank is able within a reasonable time to raise cash, the Government will certainly lend it a sum of money equal to the amount so raised. The bank is authorised to collect all debts due to it in the usual way. Further it should be well known to all that in the present time of war, people who have cash should pay it into the various banks in the Colony and thus allow it to circulate freely to help commerce and should not hoard it. Hoarding not only does no good to those who hoard but will certainly do harm to the local situation and thus help the enemy."^[14][15]

On 30 September 1914, the bank's statement of accounts, dated 15 August, was published by its auditors, Welsh & Co.^[16] On 30 September, Secretary Seow Poh Leng issued an announcement that the bank would resume business on Tuesday 1 October 1914.^[17] Within the first five minutes of the bank opening its doors there was more paid in than paid out and by noon deposits exceeded withdrawals by $27,552.^[18] Due to repeated complaints from shareholders, particularly Tan Cheng Siong, Lim Peng Siang, resigned.

The fourth annual report of the bank, in November 1916, noted a net profit of $199,105.80.^[19] Within 12 months, business volume had nearly doubled.^[20]

The net profit for the year ending 30 September 1917, amounted to $269,704.22.^[21][22][23] The bank had successfully recovered from the run, but due to complaints from shareholders, particularly Tan Cheng Siong, Lim Peng Siang resigned his position as Managing Director.

First Malayan Chinese bank to go international

Seow Poh Leng focused his efforts towards bringing the Ho Hong Bank in line with the well-established "exchange banks" of the Straits Settlements and relying solely on his own study and observation cautiously began foreign exchange activities. He was joined in his efforts, in 1923, by Dr. H. L. Huang who had existing practical exchange experience.

The Ho Hong Bank was the first Chinese bank in Malaya to engage in international banking. Ho Hong Bank enhanced its foreign exchange business by establishing branches in Hong Kong and later Shanghai. This, together with close co-operation of the South East Asian (Nanyang) offices and correspondents, transformed this local bank into an important exchange bank in Shanghai, Hong Kong and Malaya.^[24][25][26]

The Ho Hong Foreign Exchange Training Program

The opening of the Shanghai office offered opportunities to send Bank staff there to experience modern exchange operations, a far-sighted policy, the brainchild of Lim Peng Siang and Seow Poh Leng. Among those sent over to learn under the program implemented by Ko Leong Hoe and Dr. H. L. Huang, were Tan Eng Hooi, Tan Eng Leong, Chua Keh Hai, Kwa Siew Tee, Hooi Yip Beng, Tan Chwee Lee and Yeo Tiam Siew.^[24]

Formation and Early History of the Ho Hong Bank

• On 15 1917, Lim Peng Siang registered the Ho Hong Bank.^[27] Advertisements in March 1917 informed the public of the establishment of the new bank, with its head office at Raffles Chambers 5 & 6 and branches at 155 First Cross Street in Malacca and 77/79 Jalan Suleiman in Muar. The bank was established with an authorised capital of $8 million and an issued capital of $4 million - $3.5 million (£40,406,976) was subscribed, half of which was paid up. This $3.5 million would grow to $4 million by 1920and over $6 by 1931. The board of directors of the new bank comprised Lim Peng Siang as Chairman, Lim Boon Keng, Lee Choon Guan, Tan Cheng Kock, Chee Swee Cheng, Goh Soo Pin, Chan Kang Swi, Teo Soon Lan, Ng Ah Si, Lim Chwee Chian and Seow Poh Leng as General Manager and Secretary. Business commenced on 2 April 1917.^[13][28][29] Lim Peng Mau became Managing Director, Mah Kee Keng its Head of The Business Department, Tan Eng Hin its Manager of the Malacca Branch and Tan Chin Tah its Sub Manager of the Muar Branch.^[24] A final vindication of Lim Peng Siang could be seen in the $100,000 invested by the Chinese Commercial Bank in the Ho Hong Bank by the end of September 1917.^[30]
• On 1 July 1917 a branch was opened at Batu Pahat, the Ho Siang Bank there having been acquired for that purpose.^[27]
• From the start of January 1918, current accounts were opened at its head office in Singapore.^[31]
• The Ho Hong Bank held its first annual general meeting on Saturday 16 March 1918, and a net profit of $57,574.94 was announced.^[27] The company announced an issuance of further capital for branch extension, the next of which would be in Penang.^[27][32]
• Business in Penang commenced in May 1918, at 85 Beach Street.^[33] Following that an agency in Siamese territory at Trang and another in Palembang, Sumatra (Indonesia) were established and by March 1919, arrangements had been made to establish further agencies in the Federated Malay States, Hong Kong, Shanghai and Amoy (China).^[34]
• In May 1919, with the approval of the Board of Directors, the Ho Hong Bank undertook the duties of executors and trustees.^[35]
• By the end of May 1919, agencies had also been established at London, New York, San Francisco and Semarang (Indonesia) and the bank's paid up capital had been increased to $3 million. It was also, at that time, the first Chinese bank to have that many branches and agencies and it was the only bank in Singapore to undertake the offices of executors and trustees.^[36]
• By October 1919 the bank had agencies in Batavia and Surabaya (Indonesia).^[37]
• In September 1920, in order to pave the way for future expansion, the authorised capital of the Ho Hong Bank was raised from $8 million to $20 million through the issue of 120,000 additional shares of $100 each.^{[38][39][40][41][42]}
• At the end of March 1921 the Ho Hong Bank removed from Raffles Chambers 4, 5 and 6 to 94 Market Street and were thus able to, as other banks had a practice of doing, provide board and lodging to clerks. Up till then, because of this lack, the bank had found it difficult to engage clerks.^{[43][44][45][46][47]}
• In May 1922 the Ho Hong Bank disposed by auction, various properties it had previously bought in Johore: Eng Teck San rubber and tapioca estate (985 acres) in Johore grant 2363 ($34,000); land and houses Nos 5 and 6 Jalan Mersing, Kluang, (2660 sq. ft.) in Johore grant 2787 ($5,000); land and house No. 7 Jalan Mersing, Kluang, (2660 sq. ft.) in Johore grant 2787 ($5,000); land and houses Nos 8 and 9 Jalan Mersing, Kluang, (1770 and 1790 sq. ft.) in Johore grants 2788 and 2789 ($3,700 each); land and houses Nos 10, 11 and 12 Jalan Mersing, Kluang, (1764, 1768 and 2295 sq. ft.) in Johore grants 2790, 2791 and 2792 ($3,500 each);^[48] Gowthia Rubber Estate, Pasir Gudang, Johore (978 acres) and 3 roads ($34,000).^[49]
• On 1 October 1923, the bank, which already had an agency in Hong Kong, formally opened a branch office there, in the Astor house building at the premises formerly occupied by the Bank of Asia.^{[50][51][52][53]}
• In July 1924 the bank bought No 1 Cairnhill Circle (50,804 sq. ft.) from Estate and Trust Agencies Ltd. for $35,000.^[54]
• On 30 January 1936 a branch was opened at Birch Road in Seremban.^{[55][56][57][58][59]}
• By April 1926, encouraged by the success of the Hong Kong and Seremban branches, plans were afoot to establish branches in Batavia and Shanghai, and to acquire its own premises for the Muar and Malacca branches.^[60]
• By the time of its tenth annual general meeting on 3 May 1927, Ho Hong Bank had established branches in Batavia and Shanghai. The bank now had nine (9) branches and had set their sights on opening a branch in Surabaya (Indonesia),^[61] but that was postponed and by 1928 premises for that branch had been acquired.^[62]
• Ho Hong Bank was appointed receiving agents for the sale of the Rehabilitation Short Term Bonds of the Ministry of Finance of the Nationalist Government of China in August 1928.^[63][64]

A final transformation: The Oversea-Chinese Banking Corporation

Difficulties brought on by the Great Depression forced the Ho Hong Bank to merge in 1932 with the Oversea-Chinese Bank (OCB) and the Chinese Commercial Bank (CCB) to form the Oversea-Chinese Banking Corporation (OCBC).^[65]

Ho Hong Group

One of the founders, Lim Peng Siang or Lin Bengxian (1872–1948) was also the owner of the Ho Hong steamer company that operated from Xiamen. In the Hokkien (Minnan) dialect the name Ho Hong means "good winds". The allusion here is to the trade winds that pre-steamer sailors depended on when sailing for trade.^[66]

Timeline

• 1917: Lim Peng Siang founded the Ho Hong Bank Limited, opening branches simultaneously in Singapore, and Muar and Malacca in what is now Malaysia. It then opened branches in Ipoh, Kuala Lumpur, Batu Pahat and Penang. Ho Hong rapidly opened branches in Batavia and Palembang in the Dutch East Indies.^[67]
• 1923: Branch opened in Hong Kong.^[67]
• 1925: Branch opened in Shanghai.^[67]
• 1930: CCB, Ho Hong and OCB agree a mutual support pact.^[67]
• 1932: The United Kingdom leaves the gold standard and devalues the pound sterling. This leaves Ho Hong and OCB in financial trouble and they approach CCB for help. OCBC is born as the result of the merger of Chinese Commercial, Ho Hong and OCB. Ho Hong and OCB branches in Malaya are converted to OCBC Bank branches.^[67]
• 1933: OCBC starts functioning on 2 January 1933. OCBC emerges as the biggest and strongest bank in the Straits Settlements. The Ho Hong and OCB branches in Malaya eventually become OCBC Bank (Malaysia) Bhd.^[67]

References

1. Chinese in Singapore, 7 Nov 2005, Michelle Tan
2. Weekly Sun, 24 August 1912, Page 6
3. The Straits Times, 27 November 1912, Page 5
4. The Straits Times, 20 November 1913, Page 8
5. The Straits Times, 20 November 1913, Page 9
6. The Singapore Free Press and Mercantile Advertiser (1884-1942), 21 November 1913, Page 7
7. The Singapore Free Press and Mercantile Advertiser (1884-1942), 27 November 1913, Page 342
8. The Straits Times, 16 December 1913, Page 9
9. The Straits Times, 13 March 1914, Page 10
10. The Singapore Free Press and Mercantile Advertiser (1884-1942), 13 March 1914, Page 12
11. The Straits Times, 23 March 1914, Page 11
12. The Straits Times, 7 August 1914, Page 9
13. Capital and entrepreneurship in South-East Asia By Rajeswary Ampalavanar Brown
14. The Straits Times, 27 August 1914, Page 10
15. The Singapore Free Press and Mercantile Advertiser (1884-1942), 27 August 1914, Page 6
16. The Straits Times, 30 September 1914, Page 6
17. The Straits Times, 30 September 1914, Page 11
18. The Straits Times, 1 October 1914, Page 8
19. The Straits Times, 10 November 1916, Page 9
20. The Straits Times, 11 November 1916, Page 9
21. The Singapore Free Press and Mercantile Advertiser (1884-1942), 16 November 1917, Page 10
22. The Straits Times, 16 November 1917, Page 8
23. The Singapore Free Press and Mercantile Advertiser (1884-1942), 22 November 1917, Page 326
24. The Chinese Banks Incorporated In Singapore And The Federation of Malaya by Tan Ee-Leong, published in The Journal of the Malayan Branch of the Royal Asiatic Society, Vol 26 Pt 1, 1953, reprinted in T.H. Silcock, ed., Readings in Malayan Economics (Singapore: Eastern Universities Press) 1961
25. Singapore By Gretchen Liu; p. 174
26. The International Expansion of Singapore's Largest Banks by Adrian E. Tschoegl
27. The Straits Times, 19 March 1918, Page 7
28. The Singapore Free Press and Mercantile Advertiser (1884-1942), 28 March 1917, Page 9
29. Banks as multinationals By Geoffrey Jones
30. The Straits Times, 26 November 1917, Page 10
31. The Straits Times, 5 December 1917, Page 4
32. The Singapore Free Press and Mercantile Advertiser (1884-1942), 21 March 1918, Page 11
33. The Singapore Free Press and Mercantile Advertiser (1884-1942), 12 May 1919, Page 9
34. The Straits Times, 15 March 1919, Page 9
35. The Straits Times, 12 May 1919, Page 11
36. The Straits Times, 31 May 1919, Page 12
37. The Straits Times, 24 October 1919, Page 8
38. The Singapore Free Press and Mercantile Advertiser (1884-1942), 11 September 1920, Page 6
39. The Straits Times, 11 September 1920, Page 10
40. The Singapore Free Press and Mercantile Advertiser (1884-1942), 29 September 1920, Page 14
41. The Straits Times, 29 September 1920, Page 14
42. The Straits Times, 29 September 1920, Page 8
43. The Straits Times, 22 March 1921, Page 12
44. The Singapore Free Press and Mercantile Advertiser (1884-1942), 31 March 1921, Page 4
45. The Straits Times, 31 March 1921, Page 10
46. The Singapore Free Press and Mercantile Advertiser (1884-1942), 28 March 1921, Page 1
47. The Singapore Free Press and Mercantile Advertiser (1884-1942), 1 April 1921, Page 11
48. The Singapore Free Press and Mercantile Advertiser (1884-1942), 5 May 1922, Page 7
49. The Straits Times, 7 February 1923, Page 8
50. The Straits Times, 19 September 1923, Page 8
51. The Straits Times, 30 October 1923, Page 8
52. The Singapore Free Press and Mercantile Advertiser (1884-1942), 12 October 1923, Page 7
53. The Straits Times, 8 October 1923, Page 8
54. The Straits Times, 9 July 1924, Page 8
55. The Straits Times, 6 October 1925, Page 8
56. The Singapore Free Press, 7 October 1925, Page 8
57. The Singapore Free Press and Mercantile Advertiser (1884-1942), 19 October 1925, Page 8
58. The Straits Times, 26 January 1926, Page 8
59. The Straits Times, 2 February 1926, Page 10
60. The Straits Times, 16 April 1926, Page 3
61. The Straits Times, 6 May 1927, Page 13
62. The Straits Times, 12 May 1928, Page 12
63. The Straits Times, 1 August 1928, Page 10
64. The Straits Times, 1 August 1928, Page 6
65. The Automobile Association of Singapore - Three Kings
66. Chinese Business Enterprise By Rajeswary Ampalavanar Brown; p. 137
67. Tschoegl (2002), pp.29-30.

• Tschoegl, Adrian E. 2002. "The internationalization of Singapore’s largest banks". Journal of Asian Business 18 (1): 1-35.

External links

• Application of the Ho Hong Bank Ltd. For Permission To Acquire Immovable Property In Hong Kong
• Application From The OCBC Ltd For Exemption From The Payment of Ad Valorem Duty On The Transfer To Them, Of Their Premises, 13 Queen's Road Central By Ho Hong Bank Ltd.
• OCBC Group Fact Sheet
• First Local Bank Engaged in International Banking
• OCBC 2001 Annual Report
• OCBC History
• Chinese In Singapore
• The International Expansion of Singapore's Largest Banks
• Paper Prepared to the Annual Conference on ‘Chinese Cities in Transition: The Next Generation of Urban Research: Part 4,’ Shanghai Academy of Social Science, Shanghai, 7-9 July 2005