By penetrating beneath the layers of paint he may recite the roll-call of the disappeared - or in this case the street-front brand names that were painted over again and again until they were replaced by just a handful of survivors.
Remember them? In the present decade, to take just the city's banking sector, they have included the likes of Kwangtung Provincial Bank, Sin Hua Bank, the China & South Sea Bank, Kincheng Banking Corp, China State Bank, National Commercial Bank, Yien Yieh Commercial Bank - all rebranded in an exercise that began on China's national day holiday on October 1, 2001, into the Bank of China (Hong Kong).
Gone more recently is Belgian Bank, which itself was a newcomer layered over a predecessor called Fortis Bank (Asia), both of which are now painted over in the livery of yet a more recent replacement on the streetscape, namely ICBC (Asia) - whose parent had earlier gobbled up First Union Bank.
Kwong On, Dao Heng and Overseas Trust Bank all now painted over in the colours of DBS Bank (HK).
Even though the decade has run just half its course, the list goes on - Chekiang First Bank (now Wing Hang) ... Hongkong Chinese Bank (Citic Ka Wah) ...
In the uncertain business of banking in Hong Kong, there is at least one certainty and that is the inevitability of further consolidation.
The introduction by the end of next year of the new supervisory regime and method of calculating regulatory capital spelled out in what is known in shorthand as 'Basel II' will ensure this is the case.
To simplify one aspect of a complex new regime, consider the following scenario.
Bank A has loans of $100 and a capital adequacy requirement of 11 per cent. Assume all of those loans are risk-weighted at 100 per cent. The regulatory capital required to support those loans is then $11.
Now, if under Basel II the capital adequacy ratio is raised to 11.5 per cent and because the loan portfolio is judged to carry a higher risk under the new method of calculating these things, it is risk-weighted at 120 per cent, there will have to be an increase in the regulatory capital set aside on that loan portfolio to $13.80 (11.5 per cent of $120).
If the bank's cost of capital is, say 12 per cent, then the annual carrying cost of that additional $2.80 of regulatory capital is 33.6 cents (12 per cent of $2.80), or expressed as a percentage of the unchanged loan book of $100, 33.6 'basis points' (33.6 cents as a ratio of $100).
Assuming the bank's loan portfolio is generating a net interest margin of 1.6 per cent, the increased capital requirement will then cut those earnings by 33.6 basis points to 1.26 per cent.
That means a decline of 20 per cent or so in interest earnings - from a net return on its loan portfolio of 1.60 per cent to 1.26 per cent - and since interest income is roughly half of a bank's bottom line, it means more or less a 10 per cent fall in net profit.
That begins to translate into a lot of money - $100 million on a $1 billion profit - and continuing on that downward spiral will mean steadily lower dividend distributions, a falling share price, higher cost of capital, lower credit ratings, etc ...
The extent to which Basel II will create winners and losers depending on how well or badly lenders adapt to the new regime will be multiplied if bigger, better-equipped risk managers succeed in shaving 50 basis points off their regulatory capital requirements and lowering the overall risk-weightings on their loan portfolios.
For the moment all of this is a purely academic reflection since Hong Kong banks for historical reasons are all operating with significantly more capital than the Hong Kong Monetary Authority requires them to hold.
But as those levels are pared down to the regulatory limits, banks with a lower risk profile and lower capital adequacy ratios will plainly either be in a position to book vastly superior returns on their assets - or use their wider margins to make significantly lower-priced loans.
Smaller operators struggling to adapt to the new regime will be forced to take on higher-risk borrowers and this in turn, could lead to higher credit defaults and thus add another twist to their cost spiral relative to bigger banks.
That all sounds like a recipe for accelerated consolidation and the disappearance of a few more familiar names.
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