Canadian bankers are generally a sour lot, secretive and uppity, heavily into the symbols of their economic clout, such as private jets and stretch limousines. John Cleghorn, chairman of the Royal Bank of Canada, broke the mould when he recently sold off the bank’s Challenger aircraft and bought himself a production-line Chrysler.
But Bill Dalton, 50, the head of Canada’s fastest-growing bank, regards the corporate trimmings of his job as basically silly. President of the Vancouver-based Hong Kong Bank of Canada, he’s as informal as if he were running a summer camp. He doesn’t even pretend to be a workaholic, surfs the Internet, belongs to no fancy clubs, has the laugh and gusto of a stevedore, and then, there’s his car. It’s a 1959 Triumph TR3, a low-slung two-seater much like the one Diana Rigg used to chase “rotters” during The Avengers TV series. It gets worse. Dalton’s vintage vehicle was originally racing green, but earlier this year, he had it painted fire-engine red.
That’s enough to get you drummed out of the Canadian Bankers’ Association. The only other Canadian banker who dared drive a red sports car, after all, was Howard Eaton, head of Edmonton’s Canadian Commercial Bank, who owned a Porsche 91 IE. The bank, the car and Eaton, who was dealing with controversial Toronto financier Leonard Rosenberg, all ended up on the rocks in 1985.
But Dalton’s not worried. His bank’s net income grew by 36 per cent last year, and its assets are well over $20 billion. The country’s seventh-largest bank, the Hong Kong has grown by absorbing smaller Canadian banking operations such as the Bank of British Columbia, AMZ Bank, Lloyd’s, the Midland and, most recently, Barclay’s. It now has 112 branches, is in every province except Prince Edward Island, and has expanded into leasing, money management, insurance, brokerage, discount brokerage and mutual funds. “I like to tell people that we’re the largest international bank in Canada,” Dalton told me, “and we are, because none of the other Canadian banks can match our global capabilities.” What he’s talking about are the bank’s links through its parent company, HSBC Holdings PLC of London, which, in terms of the capital at its disposal, ranks as the world’s largest banking conglomerate, with assets of $514 billion, and 3,300 offices in 72 countries.
Hong Kong-based clients are encouraged to open their Canadian accounts before they leave, so that their business is lined up even before they hit our shores. ‘We have this 130-year history in Asia,” says Dalton, “and unlike other Canadian banks who view their Asian business as one segment of their operations, for us it’s the mainstream. Some other Canadian banks have more people working in Asian banking than we do, but what they don’t have is the name, Honk Kong Bank, and we take full advantage of that.” Dalton has made a special effort to cater to Oriental clients by
The Hong Kong Bank’s Bill Dalton could double its assets to $50 billion—but he fears that might dilute its culture
expanding branches in various Chinatowns across the country. Its new branch in Vancouver’s Chinatown, for example, is housed in a $10-million, five-storey building that has 2,200 safety deposit boxes and a huge fish tank, representing fung shui, the happy relationship between humanity and nature.
Dalton boasts that his bank has the country’s lowest loan-loss ratio—half the Big Six average. “Being the new boys on the block 15 years ago, we recognized this was an opportunity to get into serious trouble, because everybody would be trying us out. So we decided one way to avoid big hits was not to specialize in big loans, and 85 per cent of our lending is for less than $500,000. Also, instead of burdening our managers with 150 accounts or so, as our competitors do, we assign them only 40 or 50 accounts. That way, we know much more quickly who is getting into trouble, and if we can help them out. Also our people know when not to blow the whistle, because every situation is different.” Jim Cleave, who preceded Dalton at the bank and now heads the Hong Kong’s American operation, was responsible for formulating its basic strategy of stressing personalized service. “It sounds so motherhoody and so hokey,” Dalton admits, “but when we set up this bank, we knew that we couldn’t give loans cheaper than anyone else, that we couldn’t pay more on deposits, and that even if we managed to invent new products, the other guys would have them the next day and spend 10 times as much promoting them, and have 1,500 more branches to sell them through. So, we decided we were going to compete on customer service—and we’ve managed to achieve that.”
Four times a year, the bank surveys its customers and it has so far received favorable notices. According to a recent Canadian Bankers’ Association survey, 94 per cent of the Hong Kong’s small business customers said they would recommend the Hong Kong to their friends and associates. Unlike most bank CEOs, Dalton is constantly on the prowl at every level of his bank, to make certain customers aren’t unhappy. Maybe he cares partly because he grew up without privilege, having been raised in the east end of Vancouver, not being able to attend university until he did so as an adult, financed by a Bank of Montreal scholarship. He spent 18 years at the BMO, starting as a teller, and was rescued in 1980, when Gene Nesmith, another BMO employee, was asked to open the Hong Kong’s operations in Vancouver and he asked Dalton to be his assistant.
Dalton’s enviable problem at the moment is to decide how fast his bank should grow. Doubling its assets to $50 billion is attainable, but he fears such a leap might dilute its culture. Maybe he’s mellowing a bit. He bought a new sedan recently. It was a BMW 535i with a five-speed transmission and MAG aluminum wheels. ‘That’s about as hot-roddy as I can get, and still be legal,” he says—not sounding like any banker I’ve ever known.
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