Everyone likes to deliver positive news and, as president of the Hong Kong Institute of Bankers (HKIB), Peter Wong Tung-shun finds himself in that fortunate position.
The banking sector may not be out of the woods yet, despite stronger markets and economic recovery taking shape, but at least the general prospects for next year give room for optimism.
"We are saying the situation is challenging, but it's going to be a lot better than it was going into this year," said Wong, who is also executive director of HSBC.
"Plenty of lessons can be learned, but there is still a tremendous amount of liquidity and Asia will be the driving force of the economic momentum."
Considering strategic issues likely to affect the next 12 months, he sees interest rates continuing low, yet few signs this will spur loan demand significantly. Therefore, success for banks in the local market will depend to a certain extent on how much they can cross-sell insurance and other wealth management products to existing clients.
"These are things you really need to think about to make the mortgage product profitable," Wong said. "The main business in terms of deposit interest rates is still not robust."
He said institutions obviously had to be ready for new or amended regulations. At present, there is much debate about everything from capital ratios to selling techniques, and change is on the way.
The important thing, though, while accepting the inevitability of closer scrutiny, is to find solutions that are practical, do not inconvenience the customer and can avoid unwarranted extra costs.
It makes little sense, for example, to mandate a complete physical separation of staff handling investment and deposit products, or just to think additional reporting is the answer.
"Regulation is one thing, but the implementation can be very different," Wong said. "There has to be a healthy dialogue with the regulator and consultation on things like a cooling-off period [when selling derivative products]." Regarding opportunities for business development, he noted that Hong Kong already had a significant head start as a pilot centre for the internationalisation of the renminbi. As the mainland pushed the use of the currency for trade settlement, a next logical step will be to develop a bond market that encourages secondary trading.
Local banks should support such a move, including efforts to become a fund and asset management centre. This will add an important new dimension to the city's role as a financial hub and make it possible to play a bigger part in the mainland's overall economic development.
"As a service centre, Hong Kong needs to work more closely with China and the Pearl River Delta to increase the geographical market," Wong said. "Instead of constantly saying there is a competition with Shanghai, it is better to see how we can work together to grab more market share from other countries."