Hang Seng Bank Boston Consulting Group Matrix

Hang Seng Bank's investment services experienced a robust 28% surge in income during 2024, a testament to its expanding market presence. This growth outpaces the overall wealth management sector's 20% year-on-year income increase, highlighting the bank's strong competitive position within a flourishing market segment.

Hang Seng Bank's life insurance segment is a clear star, demonstrating exceptional performance and market penetration. The bank achieved an impressive 80% growth in new business premiums in 2024, a figure that propelled it to become the second-largest life insurer by this metric. This robust expansion is further reflected in a 17% year-over-year increase in life insurance income, underscoring its strong revenue generation and market share in this dynamic sector.

Hang Seng Bank's core deposit base is a true Cash Cow, demonstrating impressive growth and stability. Customer deposits surged by HK$86 billion, or 7%, to HK$1,267 billion by the end of 2023. This substantial and growing funding source provides the bank with a reliable foundation for its operations.

This robust deposit base is crucial for Hang Seng Bank's financial health. It ensures strong liquidity, enabling the bank to confidently support its lending activities and generate consistent net interest income, even with a slight compression in its net interest margin.

Hang Seng Bank's wealth management services in Hong Kong represent a mature Cash Cow. The bank's established reputation and extensive client base allow it to generate consistent fee-based income from managing assets. This segment benefits from Hong Kong's status as a global financial hub, with a significant portion of high-net-worth individuals seeking such services.

In the first half of 2024, Hang Seng Bank reported a notable increase in wealth management deposits, reflecting sustained client confidence and engagement. This growth in managed assets directly translates into higher fee income, reinforcing the Cash Cow status of this division due to its stable and predictable revenue generation within a mature market.

Physical branches in areas experiencing demographic shifts or reduced customer visits are increasingly becoming a challenge for banks like Hang Seng. These locations, often in declining urban or suburban zones, face shrinking customer bases, directly impacting their revenue generation potential. For instance, a report from the Bank for International Settlements in early 2024 highlighted a consistent trend of declining branch usage in many developed economies, with some regions seeing a 10-15% year-over-year drop in in-person transactions.

If these underperforming branches aren't strategically reimagined, perhaps as specialized advisory hubs or integrated digital service centers, they risk becoming significant drains on operational resources. The ongoing costs associated with maintaining these physical spaces, from rent to staffing, can far outweigh the limited returns they generate in low-growth markets. This situation positions them as potential cash traps within the bank's portfolio, demanding careful consideration for their future role or potential divestment.

Dogs within Hang Seng Bank's portfolio represent offerings with low market share and limited growth potential, often consuming resources without generating substantial returns. Examples include legacy IT systems, underperforming physical branches in declining areas, and outdated financial products that fail to attract new investment. These segments, characterized by stagnation and high maintenance costs, are prime candidates for divestment or strategic restructuring to reallocate capital towards more promising ventures.

While the Greater Bay Area (GBA) is a strategic priority, Hang Seng Bank's expansion into other major mainland Chinese cities presents a significant, albeit less established, growth opportunity. This broader reach targets both retail and corporate clients in high-potential economic hubs, requiring continued investment to build market share.

In 2024, China's economic landscape continues to offer substantial potential beyond the GBA, with key cities outside the region experiencing robust growth in various sectors. Hang Seng Bank's strategy involves leveraging its existing strengths to capture a larger share of this diverse market, focusing on integrated digital banking solutions and tailored corporate services.

Hang Seng Bank's exploration of central bank digital currencies (CBDCs) like the e-HKD and its integration of AI-driven services represent significant investments in high-growth, yet currently unproven, sectors. These initiatives are classified as question marks due to their nascent market penetration and revenue generation capabilities, requiring substantial capital to foster development and achieve future market success. For example, while AI adoption in banking is projected to grow substantially, the specific revenue streams from Hang Seng's AI initiatives are still being established.

Hang Seng Bank's new digital-only financial products, such as the Global Money+ service and Prestige Multi-currency Debit Card, are also considered question marks. These offerings are strategic investments in the high-growth digital finance sector, aiming to attract tech-savvy customers. While Global Money+ launched in late 2023 and the Prestige Multi-currency Debit Card was introduced to cater to cross-border transaction demand, their market share and widespread adoption are still in early stages, with ongoing efforts to build user bases and establish market presence.