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BOC explores private banking

(Shanghai Daily)
Updated: 2007-03-21 09:31

TheBank of Chinawill begin offering private banking services next Wednesday - becoming the first domestic bank to target China's growing ranks of millionaires.

TheBeijing-based bank will provide the elite services first in the capital and inShanghai, using a specially trained team to serve high-end clients, the country's second-biggest lender said yesterday.

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It will later expand the operation into other cities, according to bank spokesman Wang Zhaowen.

The private banking service, which is targeting customers with more than US$1 million in financial assets, is a joint project with the Royal Bank of Scotland. The two lenders decided to tap the sector in February 2006 and began training staff and seeking locations.

Overseas banks such as BNP Paribas, HSBC and Citigroup Inc have already begun private-banking operations in China.

Banks mainly target business owners and entrepreneurs in the sector to capitalize on the notion that high-end clients represent only 20 percent of a bank's customers but provide 80 percent of its revenue.

The Chinese mainland was home to 320,000 millionaires in 2005, according to a report by Capgemini SA and Merrill Lynch & Co. The total assets held by this group topped US$1.59 trillion at the time, ranking China No. 2 in the Asia-Pacific region following Japan, the report said.

That number is bound to increase rapidly given the country's continuing economic boom, analysts said.

The Royal Bank of Scotland, Britain's second-biggest by market value, owns about 4.4 percent of the Bank of China.