East West’s Chairman and CEO Dominic Ng.
East West Bank, today one of the largest American banks to service the US-China business community, started out its life banking to Chinese immigrants in California in 1973. Much has changed in the banking industry since, but East West hasn’t lost its early focus.
That niche in turn, is likely to help it weather interest rate hikes and the economic downturn in the US this year, Chairman and CEO Dominic Ng said in an interview.
“If you’re in the business and you have 6,000 US banks that can compete against you, then every time the market slows down you’re going to get hurt bad and competition is going to eat you alive because they’re all doing exactly the same thing,” Ng said in a Zoom interview from Los Angeles on Tuesday.
“But if you are one of a few choices for your customers in a market, you are literally able to pick and choose and to get business even when the economy slows down,” he said. “We take that mentality and continue to somehow find customers.”
The bank, whose Nasdaq market capitalization is nearly $11 billion and which operates in over 120 locations in the US and China, earlier this month reported net income of $258 million in the three months to June, an increase of 15% from a year earlier. More than 90% of its business is with US-based customers, Ng said.
Ng knows the world of migration and immigration first-hand. His parents lost most of their property when they fled from the Shanghai area to Hong Kong after China’s civil war; his father rebuilt with a bus-transport business, but gave all seven of his vehicles to employees after he retired.-Ng came to the US in 1977 to obtain a business degree at the University of Houston. New to the language and culture, he adapted in part by watching television shows such as The Mary Tyler Moore Show other All in the Family. He later became a CPA and worked for nearly a decade at Deloitte & Touche in Houston and Los Angeles, before forming an investment advisory company that purchased East West Bank’s precursor (East West Federal Bank) in 1991 for $40 million on behalf of the Nursalim family of Singapore.
And as Asia’s financial crisis hit the Southeast Asian regions in the second half of the 1997s, he engineered East West’s sale in a management-led buyout which raised $238 million in June 1998. He then took the bank public in February 1999.
Discussing the US outlook, Ng said the current economic slowdown is likely to continue as the Federal Reserve raises interest rates to combat inflation, now at a four-decade high.
“I am not optimistic that with the rapid interest rate hikes the Federal Reserve has implemented, ‘business as usual’ can continue in that environment,” he said.