The attempt by this British territory's reigning financial institution to buy into a major U.S. bank marks another step in the rapid modernization of a company that glories in its buccaneer past.

The Hong Kong and Shanghai Banking Corp., usually referred to here simply as "the bank," was founded 113 years ago by the rough-and-tumble British merchants who inspired the novel "taipan." In its early years, the bank financed the lucrative sale of opium and purchase of tea in China. Before revolution swept the mainland, it had become deeply involved in bringing railroads and other bits of the modern world to the last Chinese dynasty.

Today, after years of traditional, ingrown British management, the bank has entered a more aggressive period, building up assets of more than $17 billion and 1977 earnings of $113 million from its solid base in this bustling city and a century-old involvement in the Middle East that has suddenly exploded into profits.

Its announced entry into negotiations to acquire "a significant equity position" in Marine Midland Banks Inc. illustrates its concerted effort to move from what one financier here calls "the old, colonial, seat-of-the-pants style" of banking to a more international and competitive posture.

In the process, the bank has apparently decided, assuming the Marine Midland deal goes through, to slough off a California subidiary that has been plagued by state tax claims. Marine Midland, a Buffalo-based holding company that is the 13th largest U.S. bank, has $12 million in assets and a location in New York that the Hong Kong bank envies. "The money market center, the financial capital of North America, that's the place to be," said one bank official.

"Despite the current state of the greenback, the U.S. represents a market that cannot be ignored," he added. This seens to represent the attitude of specialists in market analysis from other companies the bank has begun to hire for high-level jobs here, a marked departure from its tradition of slow promotion from the ranks of young recruits brought out from Britain.

That tradition and dependability has drawn investors and depositors to the bank in an area where, in the last century, unstable governments and businesses have often been the rule. Ownership is dispersed among 50,000 stockholders. Overseas Chinese distressed by political changes in Thailand, Vietnam and Indonesia have been particularly eager customers.

Key events in the bank's growth occurred in the aftermath of World War II. The bank had shifted its headquarters to London just before the Japanese conquered Hong Kong, but bank officials left behind were forced by the occupiers to issue all the currency remaining in the bank vaults even without the proper franking. Then, as now, the bank had held the bulk of Hong Kong government funds and issued most of the local currency, with the bank's name stamped boldly on the front of each bill.When the war ended, with Hong Kong in a shambles, notes circulated under Japanese order, thus speeding recovery.

In 1949, when mainland China gave way to Communist administration, the bank began to sink funds into hundreds of businesses set up in the colony by destiture Chinese refugees. The decision to take the risk, based on bank officials' long familiarity with Chinese initiative and responsibility, paid off handsomely that give Hong Kong its economic power.

TR FOR ADD TWO.

Management control of the bank still resides in the hands of less than 400 British officer soverseeing nearly 20,000 local employees throughout the world. Advancement has usually followed a set pattern, with junior officers being housed in a comfortable hilltop dormitory, sent to of out the way Asian offices for years of routine work, but gradually winning access to the luxurious life of the British expairiate that is so unlike what remains for their contemporaries back in Britain. Last year Chairman Guy sayer retired after more than 30 years at the bank and was succeeded by another long-time official, Michael Sandberg, a genial man who seems keenly aware of the need to respond to new competitive pressures. Asian governments have forced the bank to train and install non-British supervisors. New competition from formerly meek Hong Kong competitors has brough a mushrooming of branch offices, from just four in 1960 to more than 140 now.

To counter competition from American banks lending to governments and exporting industries, the bank has established a merchant banking arm, Wardley Ltd.