Hongkong and Shanghai Banking Corp., as part of a major marketing shift, is targeting Asian consumers living in New York City.

Michael F. Geoghegan, senior executive vice president and U.S.-area manager, said that in the past Hongkong and Shanghai used its New York City branches to take deposits to fund business with companies.

Retail banking was previously left to the company's Marine Midland Bank unit and was not focused on Asians.

Fertile Ground

Bank officials estimated that Manhattan's Chinatown and other Asian neighborhoods, such as Flushing in the borough of Queens, hold more than $7 billion in deposits. About half a million Asians reside in New York City.

Hongkong and Shanghai, owned by London-based HSBC Holdings PLC, has 14 direct U.S. branches, one of the largest totals among foreign banks in the United States.

Assets Growing Fast

Branches outside New York focus mainly on wholesale corporate business, while New York branches have mainly concentrated on serving small and medium-sized companies.

As of midyear 1992, the bank's U.S. branches had total assets of $3.4 billion, up 55% over the same period a year earlier. They have since climbed to around $4 billion.

Hongkong and Shanghai last year signed up 9,000 retail accounts in New York City, bringing the total to 33,000.

Can Be Tricky Business

Hongkong and Shanghai is not the only bank to target retail business in Chinatown.

Citicorp, Chase Manhattan Corp., Chemical Banking Corp., and several Asian and community banks are chasing after the same customers.

But banking in the Asian community can be tricky for outsiders who lack staff fluent in the various Chinese dialects or are unfamiliar with Asian business practices.

With extensive operations around Asia, Hongkong and Shanghai believes it has an advantage over its rivals.

Although many Asians lack the U.S. credit references needed to obtain a loan from most banks, Hongkong and Shanghai officials overseas often know the Customers' creditworthiness.

S.K. Cheung, executive vice president for retail banking in New York, outlined several steps the bank is taking to build its Asian customer base:

* It is reorganizing six New York City branches. Each will have automated teller machines in the front, a sales and service center, and a third area devoted to specific business operations.

* The bank is expanding retail products so that each branch offers home mortgages, consumer loans, credit cards, and investment products. It is considering opening seven days a week.

* The bank is stressing its global access card, which permits customers to withdraw cash from 150,000 ATMs in 50 countries.

Retaining Customers a Problem

Retaining customers is a major hurdle for banks operating in Chinatown, officials said.

They noted that Chinatown is frequently a stopover point for immigrants who later move on to New Jersey.

But officials said that expanding the number of products, linking the bank's ATMs to the NYCE network, and focusing on special services for the Asian community will help the bank retain customers.

"Don't forget, even if people move out of Chinatown, they still come back because they have business or shopping to do, Mr. Cheung said.

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