Comparison of Corporate Image Between Hang Seng Bank and Bank of East Asia Essay Example

personal banking venture.

The report primarily emphasizes the local Hong Kong community, identifying issues and generating proposals for our firm. We employ two parameters to assess the reputations of BEA and HSB. The first segment involves a discussion on corporate social responsibility, divided into three sectors pertaining to CSR strategy and reporting, environmental operations and community engagement. Following that, we scrutinize the marketing tactics utilized by BEA and HSB, offering proofs of their branding and bank persona. Our final inference and suggestions will be formulated from these two aspects. By collating data and recent developments about our firm and HSB, we can acquire an in-depth understanding of the corporate image's relevance and explore potential remedies for the challenges.

Primarily, our conclusions stem from secondary sources owing to time constraints. We predominantly lay emphasis on two significant aspects. The reference content is gathered and distilled from formal websites, yearly reports, press releases, and authenticated organizational reports.

In BEA versus HSB's corporate social responsibility accomplishments, it is highlighted that a business typically has five principal stakeholder groups: shareholders, customers, employees, suppliers, and the surrounding community. While businesses naturally aim for profitability to satisfy their shareholder’s interests, the focus on corporate social responsibility has been growing over the recent past.

Companies fostering public welfare through community development and taking into consideration the public interest during business decision-making processes are encompassed under corporate social responsibility.

Hang Seng Bank and Bank of East Asia are significant players in terms of their involvement in multiple operations. These involvements exist in two areas: the safeguarding of the environment and investing in the community.

In terms of safeguarding the environment, the implementation of online banking was vigorously encouraged to

lower the use of paper. This was promoted by both the Bank of East Asia in their 2009 Annual Report and Hang Seng Bank Limited in 2010. In addition, both banks contribute to community investment through charitable donations, by taking part in the Dress Special Day event organized by the Community Chest.

A recent Corporate Social Responsibility Survey by Oxfam Hong Kong, which monitors the CSR policies and strategies of major companies in the Hong Kong stock market, found that Hang Seng Bank was ranked 9th out of 42 blue-chip corporations, with Bank of East Asia positioned at the 25th spot. The categories 'community investment' and 'environmental performance' attracted considerable interest. Our bank doesn't perform as well as Hang Seng Bank in these categories, and is one of the lowest-rated blue-chip companies in terms of 'community investment'.

The upcoming sections will delve into these two facets, with the aim of suggesting enhancements for our company's reputation.

The environmental conduct of a bank is a direct reflection of its engagement with society and its demonstration of social responsibility. Unfortunately, our bank's environmental performance falls short compared to HSB, recording separate scores of 13:16 respectively (Oxfam Hong Kong, 2009). These scores were determined based on factors such as the bank's consumption notation, waste disposal processes, advancements in initiatives, and reduction goals.

HSB demonstrates a notable footprint in both the amount and caliber of its environmental activity. It prides itself on being the first local organization awarded the ISO 14001 certification. This recognition is given to institutions that successfully manage their ecological repercussions, enhance their environmental initiatives, and employ a systematic plan for establishing environment-related goals (ISO Website, 2010). Known as a

Green Bank, HSB's procedures in Hong Kong have maintained a carbon-neutral stance from 2007 onwards (Hang Seng Bank Limited, 2010b).

HSB not only incorporates environmental campaigns into its everyday operations, but it also runs numerous events focused on the environment to enhance society's ecological consciousness. Examples include the Biogas Toilet Project and the PRD Environmental Awards (Hang Seng Bank Limited, 2010). HSB maintains its steady growth in this area, reducing yearly carbon dioxide emissions by 6,250 tons, and earning several environmental accolades for its excellent work (HSB annual report, 2009). In 2009, HSB received the Gold Award for Environmental Excellence from the Environmental Campaign Committee (HSB Website, 2010).

Relative to HSB, our engagement in addressing environmental concerns began later and was not initially as strong. The integration of Corporate Social Responsibility Report into our yearly report only occurred in 2007 (BEA annual report, 2007), while for HSB, it started back in 2003 (HSB annual report, 2003). Nonetheless, we are involved in activities relating to environmental preservation and energy reduction. For instance, BEA transitioned from using fluorescent tubes to high-efficiency LED light tubes and implemented the use of energy-efficient spotlights in May 2009 (BEA annual report, 2009). Nevertheless, when it comes to waste disposal and management, we have a deficiency in quantitative metrics, resulting in a lack of clarity regarding the impact and differences. According to Oxfam's report, top-performing companies often have commendable records of greenhouse gas emission tracking, a practice not currently featured in BEA’s yearly reports or future proposals.

Among all the corporate social responsibility initiatives, community investment stands out as a vital sector that differentiates corporations that view community investment as a long-term strategy from those

that merely make charity donations. In this regard, Hang Seng Bank and the Bank of East Asia exhibit distinct approaches.

The Corporate Social Responsibility Survey of Hang Seng Index Constituent Companies in 2009 (Oxfam Hong Kong, 2010) suggests that HSB managed to score 6 out of 12 in the field of community investment. However, our achievement was a mere one point in this segment, indicating that we are lagging significantly behind our competitors. In terms of community engagement evidence, HSB has displayed a significant level of interaction with different communities. Over the last decade, HSB has expended more than HK$211 million towards donations and support, out of which more than HK$29 million was spent in 2009 alone (Hang Seng Bank, 2010).

HSB's extensive involvement in community investment is recognized by the local population in Hong Kong. The bank is dedicated to endorsing events that foster social unity and promote charitable contributions. Its volunteers have been a part of home visits, excursions and special occasions for seniors and disadvantaged children. HSB not only assists those in need but also invests in the future by cultivating talents. While we actively sponsor a number of events, there are a few community areas such as education and sports where our involvement is relatively limited. Therefore, the extent of our community investment can be said to be somewhat confined.

Apart from the issue of breadth, HSB indeed outperforms in presenting itself as a more authentic and loyal participant in society compared to us. HSB honored the accomplishments of individuals surmounting severe physical hurdles to underscore the significance of positive life principles. They also brought joy to chronically sick children housed in the Children's

Centre for Cancer and Blood Diseases at Queen Mary Hospital. They even backed a sequence of seminars organized by YWCA, providing assistance with stress management. On the other hand, BEA is more committed to charitable actions, appreciates arts and offers support for professional bodies, which admittedly aren't sufficient.

As a result, HSB's endeavors are increasingly recognized by the community. HSB also releases an annual Corporate Social Responsibility Report, which acts as a gauge for evaluating its social and environmental impact. Observing HSB's ongoing positive influence on society tends to enhance customers' favorable perception of the corporation.

Despite our efforts, in terms of CSR, we seem to be more of a follower than a pioneer. Unlike HSB, BEA's contributions to community investment are not clearly documented or well-structured. When comparing BEA and HSB's marketing strategies, promotion is a key focus. This is the means by which we connect with our customers and each bank has its unique successful tactics. By examining both our own and HSB's promotional strategies above and below the line, we can identify areas for improvement.

Promotion above-the-line refers to product advertising strategies which involve paying an advertisement agency for placements such as on TV commercials. Hang Seng Banks has built a remarkable history of unforgettable TV commercials, including notable ones like the sharing by Lee Lai Shan, an ex-world windsurfing champion (YouTube, 2010), and the Chinese New Year greetings (YouTube, 2010). These impressive commercials not only display their evolution alongside ours but also cements their friendly and compassionate image. In contrast, our new advertisements launched under the fresh brand platform "Extending our reach" (Bank of East Asia, 2010) fell short of our predicted effectiveness. The

narrative's correlation with our message of standing with customers lacked clarity. Besides, compared to HSB's notable commercials' long-standing record, our marketing campaign has a short lifespan of only a year, creating a noticeable contrast.

While traditional marketing channels have been leveraged to send out direct persuasions, it has become increasingly commonplace for marketers to promote their products through less apparent avenues such as sponsorships and public relations. This technique is known as below-the-line promotion. As outlined in the earlier section, HSB's extensive efforts and historical engagement in corporate social responsibility take pole position in the banking sector, providing strong proof of its status as a considerate bank. However, we lack the corroborative evidence of sponsorships or contributions towards society. As such, the contrast between our efforts towards below-the-line promotion and its actual impact is stark compared to HSB. This shortcoming has positioned us unfavorably in the perception of our clientele.

Nonetheless, we have the capacity to utilize innovative below the line promotional channels in addition to a decent degree of sponsorships or public relations. By embedding product placements in TV soap operas or hosting trade shows, we can distinguish ourselves and consequently enhance customer loyalty.

The stability and reliability of a bank, according to Van Heerden and Puth (1995), significantly influence its reputation. They highlight the importance of a bank's trustworthiness and honesty. The bank's financial performance can primarily exhibit these qualities.

HSB has showcased superior stability and trustworthiness compared to us in the recent years, particularly during periods of financial market instability. The below illustration displays a comparison of the net income of both banks from 2006 to 2009. HSB enjoyed a significantly higher and more consistent

income, while ours saw numerous fluctuations. Notably in 2008, our net income took a steep dive from 4,414 million to just 39 million. As reported by Bloomberg news, our reputation took a hit on September 18th when we decreased our first-half profit by HK$109 million due to "manipulation" of valuations on equity derivatives we possess. On the day this was reported, BEA's stock declined by 53 percent making it the poorest performing among Hong Kong-traded banks, as losses on mortgage investments rose significantly.