Chapter 573: Swallowing Both Banks

Xia Dingji had been observing the expressions of everyone present. Seeing that everyone had finished reading, he spoke up: "Now that everyone has read the documents, are there any questions?"

The attendees looked at each other and shook their heads.

Shen Bi was the first to speak, "Director Xia, could you please tell us the government's requirements?"

Xia Dingji smiled kindly and glanced at Mai Lihao. Seeing the latter nod in approval, he straightened up and said, "The government's requirements are straightforward. After taking over one or both of the banks, you must ensure that the banks resume operations, guarantee that the public can withdraw their funds, and make every effort to quell the panic withdrawal crisis. If other banks seek your assistance, you must provide loans to help them weather the storm and prevent further crises."

Upon hearing this, everyone in the room frowned.

Before coming, they had anticipated the government's requirements, including resuming operations at Henglong Bank and Jiahua Bank and ensuring public withdrawals.

However, they did not foresee the requirement to completely address the panic withdrawal crisis and to assist other potentially troubled banks.

This added a significant level of difficulty due to the high level of unpredictability.

No one knew which banks in Hong Kong might be experiencing tight liquidity. According to the government's requirements, if those banks encountered problems, they would be obligated to assist, which would require substantial capital. If too many banks faced issues, there was a risk of dragging themselves down as well.

However, the capital-rich HSBC and the slightly less prominent Standard Chartered Bank were not intimidated by this.

Therefore, Shen Bi and Galas Liddell agreed.

"HSBC agrees to the requirements."

"Standard Chartered Bank also agrees to the requirements."

On the other hand, Ho Shan Heng of Hang Seng Bank and Ma Jianming of Bank of China Hong Kong were hesitant.

Both their banks had relatively weak capital. If they took over one or both banks, they would immediately face a rush of withdrawal requests, leading to rapid depletion of funds and dealing with the losses from gold futures.

If they were to take over both banks simultaneously, it would require at least 800 million HKD in emergency funds.

Additionally, they would need to quickly resolve the panic withdrawal situation; otherwise, if other banks followed in the footsteps of Henglong Bank and Jiahua Bank, they would need to allocate even more funds, potentially starting at 1 billion HKD.

Such a huge cash flow would put significant pressure on Hang Seng Bank and Bank of China Hong Kong.

Seeing Mai Lihao and Xia Dingji looking their way, Liu Tianci gave a faint smile and confidently said, "Jiu Ding Bank also agrees to the requirements."

The confirmation from Jiu Ding Bank, a newer player, increased the pressure on Ma Jianming. Subconsciously, he looked at Shen Bi. Seeing Shen Bi nod slightly, he felt reassured and replied, "Hang Seng Bank also agrees to the requirements."

With four agreeing, the pressure fell entirely on Ma Jianming. The others watched him with barely concealed smiles, hoping he would back down.

At this moment, Bank of China Hong Kong was not very strong. Although it was one of Hong Kong's major banks, its funds were not easily accessible. It was not yet the second-largest bank in Hong Kong as it would be in later years.

Given that mainland China had just decided to open up for reform and its economy had not yet developed, the trend of remittances through Bank of China Hong Kong from mainland Chinese merchants had not yet appeared.

Under the pressure, Ma Jianming gave up on trying to take over both banks and decided to settle for taking over one bank, thus sharing the pressure and reducing the risk significantly.

"Alright, since everyone has agreed to the requirements, we will now decide the allocation of the two banks."

"The government does not need your money but requires that the problems be resolved quickly and effectively. Therefore, you need to present your proposals and advantages."

Xia Dingji said earnestly.

"HSBC has enough cash to take over both banks and absorb their debts. With HSBC's reputation, the two banks will be able to easily overcome the panic withdrawal crisis."

Shen Bi glanced past Xia Dingji and directly at the silent Mai Lihao, speaking calmly.

Mai Lihao nodded slightly in agreement.

Seeing Shen Bi's eagerness to monopolize, Galas Liddell furrowed his brow slightly and, unwilling to be outdone, said, "Standard Chartered Bank also has strong cash flow. After taking over both banks, we will immediately settle all gold futures business to eliminate the source of the panic withdrawal crisis."

Mai Lihao also nodded slightly, acknowledging Galas Liddell's stance.

At this point, Liu Tianci did not want to wait any longer. Seeing Ho Shan Heng preparing to speak, he jumped in, "Your Excellency the Governor, Director Xia, Jiu Ding Bank has prepared 2 billion HKD in cash and is capable of taking over both Henglong Bank and Jiahua Bank."

The specific figure of 2 billion HKD made everyone turn their heads. They were surprised by Jiu Ding Bank's financial strength.

Liu Tianci remained composed and continued, "We can use Jiu Ding Media Company to manage public opinion in Hong Kong and calm the citizens' fears. This is a unique advantage we have."

"Furthermore, Jiu Ding Bank has already been actively addressing the panic withdrawal crisis behind the scenes, having acquired gold futures contracts worth 100 million HKD from Henglong Bank and 70 million HKD from Jiahua Bank. We are the largest creditors of both banks and have priority claims under bankruptcy law."

"As soon as we take over both banks, I can immediately promise all clients outside the government that we will fully cooperate with gold futures contract settlements and withdrawal requests."

Having said that, Liu Tianci sincerely looked at Mai Lihao, who seemed to have a slightly changed expression, meeting his scrutinizing gaze calmly.

Shen Bi, Galas Liddell, and others were all taken aback by Liu Tianci's statements. Jiu Ding Bank, being a major creditor and holding a significant amount of gold futures contracts, was one of the main victims of this panic withdrawal crisis.

Of course, given their intelligence, they were skeptical of Liu Tianci's claims and suspected that the panic withdrawal crisis might have been caused by Jiu Ding Bank itself.

At this moment, in their minds, Jiu Ding Bank was almost synonymous with the hidden mastermind.

Ma Jianming of Bank of China Hong Kong looked directly at Liu Tianci, his expression fluctuating. After a deep sigh, he decided to give up.

In his view, if Jiu Ding Bank had indeed caused this situation and aimed to take over both banks, trying to acquire either one would mean offending both Jiu Ding Bank and its backer, Xia Yu, which was unnecessary for Bank of China Hong Kong.

From his position, it was crucial to consider not just economic issues but also political ramifications. Offending Jiu Ding Bank and Xia Yu would be detrimental.

Ho Shan Heng, sitting next to Ma Jianming, was also experienced and, after much consideration, remained silent, making his stance clear.

The meeting room fell silent, filled with an eerie atmosphere.

…

With Jiu Ding Bank holding the trump card, Mai Lihao had to lean towards Jiu Ding Bank in his heart.

Although he was also suspicious of whether Jiu Ding Bank was behind the scenes, the bankruptcy of Henglong Bank and Jiahua Bank had been thoroughly investigated, showing that the Zhu brothers and Liu brothers had embezzled client funds, and Jiu Ding Bank was not involved.

Moreover, the situation had already occurred, and further investigation would be futile. Mai Lihao needed to quickly resolve the panic withdrawal crisis.

Despite Shen Bi and Galas Liddell raising their commitments again, they could not match Jiu Ding Bank's advantages.

While Jiu Ding Bank's capital was not as strong as HSBC's, it was sufficient to handle the crisis.

Jiu Ding Bank also had the advantage of using Jiu Ding Media Company to support the government's position publicly, which was extremely effective.

Most importantly, Jiu Ding Bank held gold futures contracts, and taking over both banks would internally absorb 170 million HKD of losses, which was a significant advantage.

Additionally, Jiu Ding Bank was the largest victim and creditor, which was another major advantage.

Thus, the negotiation ended swiftly, with Mai Lihao approving Jiu Ding Bank to take over both banks simultaneously, with a symbolic price of one HKD each. 

Although this outcome left Shen Bi and others stunned, they accepted it with grace and congratulated Liu Tianci before leaving.

Subsequently, the Hong Kong government held a press conference. The moment Liu Tianci took the stage, there was a brief silence.

When Mai Lihao announced that Jiu Ding Bank would take over Henglong Bank and Jiahua Bank for one HKD each and the obligations Jiu Ding Bank would fulfill, the audience erupted in astonishment.

Thanks to Global Television's live broadcast, the news spread like wildfire across Hong Kong.

Jiu Ding Bank's two vice managers promptly went to Henglong Bank and Jiahua Bank, depositing 500 million HKD into each bank's account. The government also sent police to protect the cash trucks delivering money to various branches. After issuing instructions, the banks reopened for business.

On that day, clients holding gold futures contracts flocked to the two banks for settlement. Although many depositors still withdrew their funds, seeing Jiu Ding Bank's takeover and the cash trucks delivering money calmed many depositors. With strong persuasion from bank employees, many chose not to withdraw their funds immediately.

That night, Global Television's "News 30 Minutes" focused

 on the news, urging citizens to stay calm and promoting that the panic withdrawal crisis was coming to an end.

The next day, Jiu Ding Media Company's efforts shifted public opinion in Hong Kong entirely. After reading the newspapers, citizens noticed that the negative tone from the previous day had vanished, replaced by positive news.

For example, Jiu Ding Bank promised that depositors from Henglong Bank and Jiahua Bank who withdrew their funds due to special circumstances could reinvest in Jiu Ding Bank, Henglong Bank, or Jiahua Bank and extend their fixed deposit period to recover their losses.

If a client had a three-year fixed deposit with Henglong Bank and withdrew after two and a half years, they could reinvest in Henglong Bank or Jiu Ding Bank to restore the deposit period and recover two and a half years of interest.

This policy was highly attractive to depositors who had withdrawn their funds due to the panic, as most depositors were not keen on losing interest and preferred keeping their money in the bank.

In the following days, the panic withdrawal crisis gradually subsided. Many depositors returned their money, and some concerned citizens went directly to Jiu Ding Bank branches to deposit their funds.

The bustling scene made other Hong Kong banks envious.

With Hong Kong's financial market stabilizing and public opinion calming, Mai Lihao was finally able to head north with peace of mind.