Bank of East Asia Ltd. will shift jobs to China's mainland and expand its network there - already the second-biggest of any overseas bank's - hoping lower costs and faster growth in mainland will offset a slump in Hong Kong, where it has its home.

"Unless you have a pre-sence in China's mainland and unless you can reduce the cost of operating in Hong Kong, you cannot basically survive in this very difficult environment," bank Chairman David Li, 63, told Bloomberg News.

The city's third-biggest publicly traded lender will move 126 data-entry jobs this year to the city of Guangzhou, and 500 other jobs will cross the border in the next two years.

The move is part of a broader revamp in which Li, whose family comes from Guangdong, is using his China experience to try to give the bank a head start over other overseas lenders.

"Li's personal and the bank's historical relation-ship with the mainland is definitely putting it in a better position as China starts to open its doors," said Ian Lui, who helps manage US$547 million at Allianz Asset Management Co. in Singapore.

"Still, they need to be cautious as that factor will diminish in importance, and they need to compete with rivals that may be bigger," Lui said.

The bank's net income fell 15 percent last year to US$205 million.