Video Game Empire

Goldman Sachs is still quite efficient. Less than a month after Rubin and Li Xuan met, they first served an appetizer to Jiahua Group. Bowery Bank of New York has a total of 35 branches in New York City and the surrounding Long Island area, with total assets reaching 6.25 billion US dollars, and the original shareholder's selling price is about 220 million US dollars.

Bowery Bank has been in existence for more than 150 years, and it got its name because the bank building was located on Bowery Avenue when he first opened its doors.

The word "Bowery" in English originated from the Dutch word "bouwerij" (farm). Before 1664, New York was actually a Dutch colony. The early Dutch immigrants established many farms on both sides of Bowery Street, so it was named "Bowery" Street.

Although Bowery Bank's history is not short, its expansion area has always been limited to the periphery of New York City, especially when it was on the verge of bankruptcy a decade ago. In the early 1980s, due to the second oil crisis triggered by the Iran-Iraq War, the U.S. economy fell into recession around 1980-1981, causing a large number of banks to fall into operational crisis in the early 1980s.

Bowery Bank was one of the lucky ones, when it fell into insolvency when it was bought by an investment group organized by senior New York Democrat and construction mogul Richard Lavitch. Subsequently, the United States ushered in the "Reagan boom" period, and Bowery Bank's performance quickly turned losses into profits.

But after Bush took office, the US economy ushered in another recession. With the economic downturn and the rise in unemployment, a large number of ordinary American people's income has decreased or even gone bankrupt, resulting in a decline in the overall social consumption scale, a decrease in the sales revenue of enterprises, and the beginning of business difficulties.

And for banks, bad-debt rates on both business and personal loans are starting to soar. Once the scale of bad debts exceeds the digestion capacity of the bank, it will lead to insolvency and the doom of being forced to go bankrupt and liquidate.

In the case of the external market getting worse and worse, Richard Lavitch and his investment partners are not prepared to continue to hold Bowery Bank, but choose to sell the bank as soon as possible to be safe. When they bought Bowery Bank for $100 million, they sold it for $220 million, and the profit has doubled, not to mention the annual profit dividends over the years.

Since the Great Depression in the 1930s, the United States has enacted extremely strict banking laws, which do not allow banks to operate across states and regions. Although large banks such as Citi and Morgan can still find some loopholes and bypass the law to open business outlets in the United States, small and medium-sized banks still occupy the mainstream in the United States.

The small size of the bank directly leads to the poor ability to resist risks. In the event of an economic crisis, large-scale failures are prone to occur. In fact, since 1988, the US banking industry has entered a new round of bankruptcy. So much so that the financial community is calling for the US government to revise the law and liberalize the restrictions on banking operations.

For foreign banks such as Xiang Jiahua Bank, the US government has stricter restrictions. Because few domestic banks like Citi and Morgan can circumvent the restrictions of U.S. law by establishing separate legal entities in each state.

As for foreign banks, the United States clearly stipulated in the International Banking Act passed in 1978 that only one state can be selected as the main state, and commercial banking business such as deposit absorption and loan issuance can only be carried out within that state.

For example, Cathay Bank, which was previously acquired by Jiahua Bank, not only opened several branches in New York Chinatown, but also opened branches in Los Angeles, San Francisco and other Chinese gathering places on the West Coast of the United States.

Therefore, when Jiahua Bank acquired Cathay Bank, it promised the Fed that it would divest and sell all Cathay Pacific branches outside New York State immediately after the acquisition. The new M&A target Goldman Sachs recommended to Jiahua this time also deliberately chose banks that only operate locally in New York State.

Jiahua Bank spent the equivalent of $70 million in stock to complete the acquisition of Cathay Bank’s $1 billion in assets. And Bowery Bank's total assets are as high as 6.45 billion US dollars, but it only asks a price of 220 million US dollars, which seems to be very cheap.

But in fact, Chinese are one of the ethnic groups with the highest savings rate in the United States, unlike most Americans who will fall into personal financial bankruptcy without income for a month. This also makes the bad debt rate of Chinese-funded banks that provide services to the Chinese community generally much lower than that of American banks of the same size, and in turn, the profitability is much higher, so the purchase price is naturally expensive.

A small Bowery bank naturally cannot satisfy Li Xuan's appetite. Although the United States has strict restrictions on foreign commercial banks, the restrictions on other financial fields such as investment banks are much looser!

And the current Wall Street is no longer the era of commercial banks, and the current commercial banks have long been reduced to a secondary role such as fund providers. Instead, investment banks like Goldman Sachs, Morgan Stanley, and Merrill Lynch can really stir the storm!

But according to US law, investment banks and commercial banks cannot belong to the same company. This is also one of the famous policies formulated during the Great Depression to limit the monopoly of the financial industry. Therefore, the original Morgan Bank was forced to be split into JP Morgan (Small Morgan), which was responsible for the commercial banking part, and Morgan Stanley (Morgan Stanley), which was responsible for the investment banking business.

If Li Xuan wants to acquire an influential investment bank on Wall Street, he must not use the name of Jiahua Bank. So Jiahua Bank quickly issued an announcement announcing the sale of its subsidiary, Asia Sun Hung Kai Securities, to LH Investment Fund. For Li Xuan, this is just a matter of turning his left hand to his right!

The real goal of Li Xuan's entry into Wall Street was also quickly locked - Express.

That's right, the American Express, known for its Centurion Black Card, is best known for issuing credit cards and traveler's checks.

Of course, it is impossible for Li Xuan to swallow the entire Express Company. Even if the board of directors of Express Express is willing to be acquired by Li Xuan, the Federal Reserve will definitely veto such a big transaction that affects the financial structure of the United States. After all, Li Xuan is a foreigner. He is just about to buy their investment banking business from Amex. Compared with investment banks with a long history such as Goldman Sachs and Merrill Lynch, Amex's investment banking department has only been established for ten years.

In the early 1980s ~www.readwn.com~ Amex CEO James Robinson wanted to make the company a super financial company, so he formed a new investment banking department and started a frenzy of acquisitions on Wall Street. journey of.

Express first acquired Hillson, the second largest securities brokerage company in the United States, and then acquired the famous Wall Street investment bank Lehman Brothers, then acquired the well-known mutual fund company IDS in the United States, and finally acquired another investment bank EF. Hutton Company.

In just a decade, James Robinson built a formidable investment banking division for Express through a series of acquisitions, and was dubbed "the barbarian at the door" by his Wall Street counterparts. However, Amex's investment banking division was a hodgepodge of hodgepodge and failed to deliver the company's expected good returns.

So after James Robinson retired earlier this year, the new CEO Harvey Grub, who jumped from McKinsey & Co., began to implement a completely different business strategy from his predecessor. He advocates refocusing on the main business of Express - credit cards and traveler's checks, and intends to split the investment banking department of the selling company!

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