Dominic Ng is the chair and CEO of East West Bank. The Pasadena-based bank was founded in 1973 as a federally chartered savings institution serving the immigrant Chinese American community and remains one of the few U.S. banks with a full banking license in China, thanks to many decades of cross-border banking experience, though over the years it has also grown into a full-service commercial bank focused on U.S. and Chinese markets.
In spite of its growth, Ng says serving the underbanked remains a core mission of the institution.
You oversaw East West Bank’s transformation from a small savings and loan association into the leading full-service commercial bank it is today. How did you help influence that growth?
When the bank was founded 50 years ago in Los Angeles, it was focused on helping immigrants who were underserved by mainstream banks. Many banks at the time were not comfortable with extending credit to immigrants, and that made it difficult for them to buy a home or even get a car loan.
When I became CEO of East West Bank in 1992, I felt that the bank had an obligation and responsibility to not just provide banking services, but to help immigrants expand beyond their communities and cross over into the mainstream. I told the board that I wanted to make the bank recognized as the premier financial bridge between the East and West and acknowledged for delivering relationship-based solutions to an increasingly diverse and sophisticated customer base.
I converted East West’s savings and loan charter into a commercial bank charter in 1995. We had customers with business and family ties in Asia, so it made sense to support them with trade financing services. That expertise was not common at the time… In time, East West expanded its capabilities and grew to a size where we could compete with national banks.
What did you do prior to East West Bank, and how did that previous experience influence your strategy as chief executive?
Prior to East West Bank, I spent 10 years in Houston and Los Angeles with Touche Ross, which later became Deloitte & Touche. I served in a senior role in the banking practice as well as a marketing role as Head of the Chinese Business Service Group. At the time, there was great potential for overseas investment in California. I also witnessed how the firm benefitted from the advisory service demand from Asia and saw parallel needs in financial services. That influenced my strategy when I joined East West Bank as CEO in 1992.
What’s a typical day look like for you?
I am always working. The day is taken up by internal meetings at the bank and meetings with corporate and nonprofit boards. I also have leadership role activities as Chair of the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC). It is a multilateral economic forum comprised of business leaders from 21 Asia Pacific economies. The U.S. is the host this year, and ABAC is preparing policy recommendations to present to the APEC heads of state and economy leaders in San Francisco this November.
What is one of the most important professional lessons you’ve learned from your time in the industry? How has it guided how you handle your work?
The lesson I have learned is to be prudent and deal with potential problems early on. During the global financial crisis of 2009, I prepared for the worst, but we pressed onward to obtain a positive result. The FDIC asked East West Bank to take over a troubled bank in San Francisco called United Commercial Bank. That doubled the size of East West overnight.
The Bank was in a position to do that because we went into 2009 with a strong balance sheet. Among my peers, I was one of the first to call out the impending real estate market collapse. Starting in the fourth quarter of 2007, East West took early measures to reappraise our commercial real estate portfolio and took an aggressive stance in managing down potential problem credits.
We sold a lot of loans that were not healthy. Also, we raised additional capital in 2008. Both moves put our balance sheet in a strong position. That is why the FDIC deemed us strong and safe enough to take over another bank.
Who or what helped you climb the ladder in the early years of your career?
When I was at Touche Ross, one of my clients at the time was the Nursalim family from Indonesia. They wanted to make a few strategic investments in the U.S. and asked me to become the president of their investing arm. One of the investments they were interested in was a financial institution. So in 1991, I helped them acquire East West, which was a federal savings bank at the time. That is how I got involved with East West as the executive chair of the board. A year later in 1992, the Nursalims asked me to step in as CEO.
What trends in the finance industry should more people be paying attention to? Why is it important?
Cybersecurity has the potential to have a major impact on how banks manage operational risk. Cyberattacks can cause significant financial losses, reputational damage, legal and regulatory penalties, and business disruption. It is an ever-evolving concern.
Another megatrend is Environmental, Social and Governance. It creates opportunities for banks helping to finance the massive investments required to support the transition of businesses looking to transform their operating models, perhaps shifting to net-zero emissions. Improving ESG performance has become a core strategic objective for many businesses across industries.
What are some greater economic developments that are impacting or could impact East West in the near future? How is the bank preparing for or handling these challenges?
Economic growth in 2023 is decelerating. The confluence of a high interest rate environment, persistent inflation, tight credit, sluggish spending, and tepid employment can possibly tilt the economy into recession later this year.
At East West, we always prepare for the worst. We are proactive and do everything upfront. It is the professional lesson learned that I referenced earlier. That is how we stay several steps ahead.
As in the example I gave earlier about the financial crisis of 2009, the bank always does well whenever economic cycles go down. We always manage to turn a crisis into an opportunity.
What is next for the bank?
We will continue to grow our balanced and diversified customer base. We are proud of our highly liquid balance sheet, which gives us the flexibility to pursue strategic growth opportunities. We are confident that we can navigate emerging and changing economic cycles well to foster steady organic growth.