In 16 years at the helm of East West Bank, Dominic Ng has taken a small, struggling savings and loan with barely $600 million in assets and transformed it into one of the region’s ethnic banking powerhouses with nearly $11 billion in assets and 62 branches. He launched this transition during the most severe recession in decades, yet the bank still managed to turn a profit nearly every year and has seen its market capitalization increase from $40 million to $2.4 billion. Now the Hong Kong native and former accountant is looking at gradually expanding East West’s business in California and eventually the Western U.S., while still maintaining a presence in China and eyeing other East Asian countries. As if this isn’t keeping him busy enough, Ng has stepped up his civic involvement in recent years, including a recent appointment by Gov. Arnold Schwarzenegger to the California Commission on Jobs and Economic Growth. He’s also on the board of Mattel Inc. and may join more local corporate boards. And he still finds time for his favorite hobby: playing and collecting guitars.
Question: You took over as head of a bank at the tender age of 33 in an industry where bank presidents are typically in their 50s or 60s. What was that like for you?
Answer:
Not only did I come in as president of the bank, but this was only the second job I held for any length of time. But when I came in, I had a vision for what I wanted the bank to become, so I had a direction and focus, and that helped a lot.
Q: What was your vision?
A:
When I came to East West in 1991, it was a small struggling savings and loan with $600 million in assets. I realized that given what had just happened in the savings and loan industry, the institution needed to be refocused. I looked at the demographics of our customers and quickly realized that while we had the right customers, we were in the wrong business. Our customers were first and second generation Chinese immigrants and many had connections in Asia. The key was to take advantage of this by turning the business into a commercial and international trade-focused bank that would be a financial bridge between East and West.
Q: A “financial bridge?” Can you elaborate?
A:
I wanted the bank to connect Chinese business customers with the mainstream U.S. business community and to connect mainstream U.S. companies with businesspeople in China.
Q: That sounds like quite a change. It must have been difficult.
A:
Yes, it was. First of all, nobody thought a savings and loan could make the transition to a commercial bank. Others had tried, like Home Federal Savings and Glendale Federal Savings; but they failed. Second, nobody thought a Chinese bank could reach out to mainstream U.S. businesses. Also, this was at a time before China became as popular for business as it is today. And, to top it all off, I had decided to make this transition right in the middle of the worst recession to hit Southern California in 60 years.
Q: Was it easy to convince the rest of the management at East West to go along with this vision?
A:
To go from a savings and loan to a commercial bank meant we had to change the entire culture. Different skill sets and relationships had to be cultivated. That often meant changing executives and hiring managers away from other commercial banks. But it was sometimes difficult to convince them to come on board.
Q: Did you ever think this experiment wasn’t going to work?
A:
No. I never adjusted the vision or the bank’s main mission. It was chaotic at first, but each year save one we managed to be profitable. And that one year (1995) we would have been profitable if it weren’t for a charge off that the government required us to take. In hindsight, given China’s rise, our strategy seemed like a sure thing; but at that time, in the early 1990s, it wasn’t apparent to many that acting as a bridge to China and the East was the right way to go.
Q: But now, everyone’s rushing to get into China. How do you manage to compete?
A:
We’re in China for the long-term. Many of the bigger banks that are rushing into China today because it’s hot will bolt at the first sign of trouble with the economy. But we’re going to stay and that’s what we tell our customers: that they can always count on us to be there. We have offices in Beijing, Shanghai and Hong Kong and we’re looking at expanding into Vietnam.
Q: What are your goals for East West Bank here in the U.S.?
A:
We’re looking to expand with more branches throughout Southern California, especially the Inland Empire. With our recent purchase of Desert Community Bank, we now have a presence in desert communities like Victorville.
Q: Any plans to become a national bank?
A:
Not in the near term. We’re more focused now on expanding within California it’s such a huge market. In a few years, I think we’ll be ready to expand into Las Vegas.
Q: When you converted East West from a savings and loan into a commercial bank, you still kept a real estate portfolio. Why?
A:
We did continue to invest in Southern California real estate. Remember, in the early 1990s when I came in, all the banks were getting out of real estate. But we saw some opportunities. For example, I was the first lender in downtown L.A. When no one else would lend to Tom Gilmore to convert those old bank buildings into lofts, we lent him the money. Now look at what’s happened downtown.
Q: What about now, with all the turmoil among mortgage lenders and the prospect of a long downturn in the residential estate market?
A:
We have always been very conservative in our lending criteria and we have one of the lowest ratios of nonperforming assets. We’ve done this by staying away from exotic loan packages and making sure our borrowers put down sizable down payments.
Q: You grew up in Hong Kong. What made you decide to come to the U.S. to attend university?
A:
When I was growing up in Hong Kong in the 1970s, there were only two universities and the competition to get into them was very tough. Most young people my age were forced to look elsewhere to go to university. Also, at that time, there was a lot of uncertainty about the future of Hong Kong and whether it would retain a vibrant economy after the handover (from Britain to China, which took place in 1997). So I looked at the U.S.; I had an older brother who was already in the Houston area, so I applied to the University of Houston. I was accepted as a foreign student on an F1 visa.
Q: As a foreign student here on a visa, was it difficult getting a job?
A:
It was challenging. The university wouldn’t allow companies to recruit foreign students on campus, so I had to go to the company offices for interviews. Actually, that visa issue was key to getting my first job. While some companies gave vague promises about trying to get me an H1 work visa, the folks at accounting firm Touche Ross knew exactly how to handle the situation and said it would be no problem to get the visa for me. So that’s why I chose Touche Ross; it had very little to do with how much I liked the workplace or the job itself.
Q: You were climbing the career ladder in the accounting field. What made you decide to switch careers and become a banker?
A:
For that, I have to give credit to one very special lady, Itjin Nursalim. I was part of the China practice group at Deloitte Touche (Deloitte Haskins & Sells merged with Touche Ross in 1990) when I took her on as a client. She was looking for someone to start a U.S. investment arm for this Asian conglomerate (PT Gajah Tunggal Terbuka, a large Indonesian-based rubber and tire manufacturer that was then majority-owned by the Nursalim family). I resisted at first but she was very persistent and in 1990, I left Deloitte and took on the job of running this investment arm.
Q: What happened next?
A:
One of the first investments that we made was East West Bank, which we acquired in 1991. I was appointed president of the bank holding company, so that’s how I came to be running the bank.
Q: You’ve not only been running East West Bank, but you’ve also been very active outside the company. How do you find the time to do all this and still spend time with your family?
A:
It’s part of my job to represent East West in the community. I’ve been very involved in the United Way. I also serve on the board of Mattel and I may look at serving on the board of another public company. But all this takes maybe about 10 percent of my work time; the rest is with East West Bank. As for spending time with my family, we do get away for vacations. We just came back from a trip to Yellowstone. But even on vacation, I make sure I always have my laptop and my Blackberry.
Q: That doesn’t sound like much of a vacation.
A:
One can argue that it’s not a real vacation, but with the responsibility of running a bank, that’s part of life when I hold such a privileged position. My wife and children have always understood this.
Q: You say you like playing and collecting guitars. How did that come about?
A:
I’ve always played guitar. Even as a kid growing up in Hong Kong, I would always be playing the guitar. At one point, I wanted to be a rock musician. Now I spend my time buying guitars I’ll look at anything, whether it’s electric or acoustic. I occasionally ask guitar makers to custom make guitars for me.
Q: Do you have any famous guitars in your collection?
A:
I do. In fact, last year, I helped (former Eagles guitarist) Don Felder organize a concert for victims of Hurricane Katrina at the Cerritos Performing Arts Center. Don was so appreciative and he knew I collected guitars, so he gave me his Fender guitar.
Dominic Ng
Title:
Chairman, chief executive and president
Company:
East West Bancorp Inc.
Born:
Hong Kong, 1959
Education:
Bachelor of Arts in business administration from University of Houston
Career Turning Point:
Leaving Deloitte & Touche to join the banking and investment arm of the Nursalim family of Indonesia, owners of PT Gajah Tunggal Terbuka, a large rubber and tire manufacturer
Most Influential People:
Jim Durkin, recruiter and mentor at Touche Ross accounting firm (later Deloitte & Touche); Itjin Nursalim, who convinced Ng to leave Deloitte & Touche for her family business
Personal:
Lives in Pasadena with wife Ellen and two children, ages 9 and 12
Hobbies:
Playing and collecting guitars
