In March 1995, after the acquisition of Bank of Bahrain, Hang Seng Bank quickly began to quickly restructure its assets and business.

The original Bank of Bahrain was supposed to be an investment bank similar to Morgan Stanley and Goldman Sachs, and it has always enjoyed a high status in the high-end wealth management market in Europe.

It can be said that the previous Bank of Bahrain managed 27 billion pounds in assets, but the size of the customer base was less than 100,000, and most of the customers were wealthy people with high net worth. Since these wealthy high-net-worth individuals have more financial institutions to choose from, the rate of return that Bahrain banks actually receive from these high-net-worth clients is very low. It is precisely because of this that the Bank of Bahrain has to constantly expand into new markets and new businesses, and employ a large number of traders to participate in the speculation of its own capital in the financial markets.

In recent years, the Bank of Bahrain seems to have been transitioning well, with profits even exceeding £1 billion at one point. But the 1 billion pounds of profit is not earned by customers, but all the profits obtained by the Bank of Bahrain itself, at high risk, and its own funds are used for financial speculation. Quite a few profits, even highly leveraged financial derivatives. Therefore, no matter how glorious the past was, risk tolerance is also very fragile.

With the second bankruptcy of the Bank of Bahrain, the brand reputation in the high-end wealth management market has plummeted. Including the Queen Elizabeth family, they have redeemed the wealth management products entrusted to the Bank of Bahrain for management.

It is precisely because of this that there is less resistance to the transformation of the Bank of Bahrain as a company. After all, the Bank of Bahrain has proven the failure of past business models with previous bankruptcies.

Therefore, the team of Hang Seng Bank successfully borrowed the shell of the Bank of Bahrain to expand its business into securities, funds and Internet finance.

The assets of the Bank of Bahrain are not seen by the Hang Seng Bank, and more importantly, the reputation of the Bank of Bahrain in the European market is much greater than that of the Hang Seng Bank, and with the help of the shell of the Bank of Bahrain, the Hang Seng Bank can do the business it wants to do.

On March 16, Bahrain Securities, a subsidiary of Bank of Bahrain, took the lead in announcing the resumption of business. At the same time, Bahrain Securities announced in a press conference: "Bahrain Securities will focus on providing securities brokerage services for securities investors in the future, and will provide market software and trading software to all investors free of charge, so that investors in Bahrain Securities no longer need to be entrusted by the securities company's business hall or by telephone and other traditional modes." Originally, it was a more timely market and online entrustment that only VIP customers of major securities companies can enjoy, but now it is provided free of charge to all customers. In addition to this, we offer 10 commission-free trades per year to our online commission trading users...... In terms of commissions, we will achieve the lowest in the market, and users in the British securities market only need to charge one-thousandth of the commission! The specific company resumes business, you can wait patiently, it should be soon! At present, we are investing in the research and development of more advanced securities trading servers and clients! After the launch of the client, the new and old users of Bahrain securities will enjoy the lowest rates in the market! In the future, we will become the lowest securities company in the market, and whoever has lower rates, tell me, I will be lower than them!

With the release of this news, the British stock market couldn't help but be shocked!

"What, a thousandth commission!"

"Oh my God, the previous Bahrain Securities, the commission was as high as five thousandths!"

"I love the Bank of Bahrain, the Bank of Bahrain after bankruptcy is so cute!"

"This is the generosity of Hang Seng Bank, the new major shareholder of the Bank of Bahrain!"

"I decided, go to Bahrain Securities to open an account, I don't know when they will be able to resume account opening and services. ”

Institutional investors in various countries, as long as their capital strength is sufficient, have a way to get a seat on the exchange and trade directly on the exchange, and the cost is the lowest.

Ordinary investors, on the other hand, are not qualified to trade directly on the exchange, and can only be intermediated by securities companies and securities brokers, rent the trading channels of securities brokerage companies, and pay commissions to securities companies, so as to obtain the authority to trade stocks on the exchange.

In the past, securities trading fees have been very expensive. It is precisely for this reason that securities companies can rely on the advantages of licenses to provide expensive intermediary services.

For example, the average commission in the UK market was as high as 7 per 1,000 before 86 years. In 86, the British securities market underwent some reforms, and more securities institutions were established, so the commission for stock trading was gradually reduced from 7 per 1,000 to 2.8 per 1,000, and the commission for individual investors was reduced from 1.07% to 0.28%. For some more expensive securities companies, the handling fee is still as high as 0.6%, even for some securities companies with low handling fees, it is only 0.2%!

In other old developed countries, basically the securities transaction fees are extremely expensive!

It is only after the Internet era that the cost of securities transactions in various countries has gradually decreased. Because, the Internet provides brokerage services, the labor cost required is very low, and a large number of securities transactions are mainly carried out through the client and the server. Due to the reduction of costs, later brokerages began to reduce fees in order to attract customers.

China's later securities market was extremely liquid. This is because the commission war between brokerages in China's securities market has erupted round after round. Before the commission war, the commissions charged by domestic brokerages were generally charged according to three thousandths, that is, the highest standard. However, the Internet has brought about cost reduction, and many challengers in the brokerage industry have begun to continue to provide better services and lower rates. At the beginning, the securities rate in China's A-share market was similar to that of Hong Kong and Europe, about 2/1000 or 3/1000, but more than 100 securities companies continued to reduce their rates to grab users, and the transaction commission was gradually reduced to 1/10000, 5/10,000, 3/10,000, 2.5/10,000 or even 2/10,000.

After more than a decade of price reduction competition at the beginning of the 21st century, the Chinese market has become the world's lowest rate securities market. After continuous cost reduction, securities companies actually do not lose money, because, after reducing the rate, they have seized users. After the user's funds are deposited in the market, they will not only trade stocks, but also buy funds or wealth management products, or margin trading.

Securities companies with more than one million users earn tens of billions a year in a bull market, and if they are more conservative and cautious, it is difficult to lose money in a bear market. To a certain extent, the revenue and profits provided by a single user of a securities company are far greater than those provided by banks, insurance companies and other institutions.

A securities user is conservatively estimated to contribute 10 times the profit of a bank customer.

Warren Buffett summed up where the money lost by ordinary retail investors goes?

In fact, the loss of buying stocks is only a small part, and the vast majority of retail investors lose money mainly from high-frequency trading, continuous trading, and contributing fees to brokers. It can be said that the vast majority of retail investors are really not because of stock losses, but because they are keen on frequent trading, and the money they earn is not enough for the loss of fees, and it is precisely because of this that the yield is very bleak.

Even if the Bahrain Securities Company reduces the commission to one thousandth, it is still a windfall profit. According to calculations, even if the labor cost and transaction channel fee in the UK are expensive, the rate of service provided by securities companies to customers will not exceed 5/10,000. A thousandth rate can actually earn 50% of the gross margin.

Even if you offer 10 trades without commission, as long as you attract customers, sooner or later there will be some customers who are keen on high-frequency trading. After the 10 commission-free opportunities are used up, the client will contribute more commissions.