Chapter 760: Future Bank
Translator: _Min_ Editor: Rundi
A company is like a beast.
The more hands and feet on the beast, the larger the body, the more complex the blood vessels under its skin, and naturally more blood flows through the blood vessels. For a company, cash is the blood that maintains its normal operation. The blood vessels supply blood to the various organizations of the company and create value through its circulation.
Business expansions, business failures, strategic adjustments, and a series of other measures may cause the company to temporarily lose blood. In general, the best solution at those times would be to seek out a loan from banks, but Future Group faced a problem.
The bank of Xin did not have the ability to provide transfusion for Future Group.
Therefore, referring to the practices of B City Consortium and the Rothschild family, Jiang Chen decided to create a blood supplying heart for Future Group!
What was more convenient than opening a bank himself?
Since he decided on it, he would do it!
On the following day, the Future Group, through its subsidiary, purchased a Cali-based bank at a price of 600 million US Dllar and changed its name to Future Bank with lightning speed. The scale of Future Bank was not too large with only twenty locations in Cali. It also had less than one million depositors. The total amount of deposits was only 4.8 billion US Dollar, and the loan-to-deposit ratio was 71% with a few bad debts.
Just as people were beginning to speculate on why the Future Group would acquire this small, unnamed bank in far away Cali, Future Group announced in high profile that it would invest ten billion US Dollar in Future Bank, and at the same time acquire 11 small and medium-sized banks located in North America and Europe at a premium.
The progress of acquisitions was very smooth, mainly because the premium offered by Future Group made it impossible for shareholders of the banks to refuse.
Immediately afterward, Future Bank began its restructuring work, integrating the operations of these eleven small and medium-sized banks under the same name, Future Bank. It transformed itself into a multinational bank.
The news on Penglai City’s opening was still a heated topic and Future Group already made an unprecedented move. With such intensive acquisitions of banks, was Future Group looking to expand into the financial markets?!
Future Group’s move immediately caught the attention of American banks such as Citibank and Morgan. Although they didn’t think that Future Group would be their opponent in the financial sector, the influence on the Internet had caused the old banking giants to not take this move lightly.
And it turned out that their worry was not without warrant.
Future Bank immediately held a press conference after the completion of the reorganization and announced to the media that Future Bank had already reached an agreement with Future Group’s subsidiary Future Technology. The agreement was to simplify the payment procedures for virtual reality content payments. After opening an account with Future Bank, Future Technology would automatically register an online banking ID for the individual. After the identification information was verified, the individual’s account could be activated.
As soon as this move was announced, the number of depositors in Future Bank rose exponentially. However, what really motivated people to save money was not simplified payment procedures, but because Future Bank’s deposit interest rate was high as 1% for their chequing accounts, and the fixed-term interest rate was 4%. For the vast majority of ordinary people, it was direct benefit they could see!
At the press conference, the CEO of Future bank was even more direct.
“Yes, our bank’s primary business is to lend money to Future Group! Do you think making a loan to Future Group may lead to bad debt? Look at your family’s robot Xiao Lin and the Future around your wrist. Do you think Future Group could go bankrupt? So please rest a.s.sured in keeping your money here. Unless Future Group goes bankrupt, you will never have to worry about your own deposit.”
Of course, the questioning voice was not absent. For example, some compet.i.tors employed experts and scholars in the finance field and stated that Future Bank’s funding ratios were too concentrated and lacked risk management capability. They questioned the security of Future Bank’s deposits.
However, even if these dissonant voices existed, they were unable to stop the Group’s march into the financial industry. After Future Bank announced its cooperation with the parent company, the number of depositors and total deposits increased at a visible speed. By the end of March, this figure had grown to an astonis.h.i.+ng level…
“Currently, the Future Bank has 17.41 million depositors globally, and the total deposits, when converted to US Dollar, is 112.1 billion based on the current exchange rate, and the loan-to-deposit ratio is 77%. At present, the CEO of Future Bank has proposed to us to acquire additional funding by going public and then using the money to acquire other banks. What do you think?” Xia s.h.i.+yu asked.
Injecting ten billion USD into Future Bank to complete the acquisitions of eleven banks, counting the 20 billion previously injected into Celestial Trade, the group’s liquidity was pinched.
“Does going public mean information disclosure?” Jiang Chen asked what concerned him the most.
Xia s.h.i.+yu nodded. “If a listed company has a major investment project, or significant business adjustments that may cause stock price fluctuations, it is obliged to disclose the details of the project to the public. But the disclosure is only limited to the details of the investment, and the part involving trade secrets can be kept confidential. My suggestion is that if you just intend to use Future Bank to support the parent company’s business, it is not bad to go public.”
After all, only a large enough scale could support the beast known as Future Group.
Going public was undoubtedly the best choice for business expansion!
The financial giants, including Citibank, were all listed companies that allowed them to accelerate their expansion and squeeze their compet.i.tors out of the market.
Old financial giants such as Rothschild Bank, although very rich, had less influence than Citigroup. One of the key reasons for this is that Rothschild had been extremely stingy with its shares and had never considered going public.
In a sense, Jiang Chen was such a person, but recently he made some changes that followed the beat of the century.
In the field of finance, Jiang Chen did not have any cutting-edge technology to use. At most, he would devote some effort on privacy and information security of depositors. However, the depositor’s information security alone may not be enough of a selling point for absorbing deposits. If he wanted to expand the business of Future Bank in a short period of time, then going public was the only answer. Then, he could use that money to buy out the compet.i.tors and achieve his goal!
“Is 30% enough?” Jiang Chen advised after a long pause.
“That’s enough.” Xia s.h.i.+yu nodded.
“Excellent. Let’s put going public aside for now. I need to temporarily tighten the lending policy of Future Bank and maintain the loan-to-deposit ratio at 80%, giving priority to satisfy Future Group’s loan demand!”
“Okay!”