Banks tailor service to super rich
By Zhang Fengming (China Daily)Updated: 2007-04-09 16:15 Private banking is emerging in China's nascent market as domestic banks follow the path set by overseas rivals, banking on the country's growing millionaires.
Bank of China forayed into the super high-end sector by opening an office offering services in Shanghai. It drew lots of attention as the first domestic bank to tap the business.
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Private banking not only means sophisticated investment products, but also includes tax planning and even overseas education planning for the children of the super rich.
The bank followed the route set by overseas rivals such as Citigroup, HSBC, AIG Private Bank and BNP Paribas.
"Overseas investors are investing for growth potential though the bank can only offer limited products under the private banking scheme," said Peter A. Horowitz, senior vice president of BearingPoint, a management & technology consulting firm.
Available information on the workings of the private banking services in Shanghai is limited as banks are very low-key on the development of the sector because of client confidentiality.
Citigroup opened its first private-banking office on the Chinese mainland in Shanghai in March last year.
Citigroup has signed deals with clients under its private-banking sector.
However, the bank declined to offer more details such as client figures.
Citigroup set a threshold of a net worth of US$10 million or other currency equivalent, currently the highest level for private banking services in Shanghai.
Todd Thomson, chairman and chief executive officer of Citigroup Global Wealth Management, said the private banking office in Shanghai is "an investment for the future."
The Chinese mainland has 320,000 US dollar millionaires, according to a
report by Capgemini SA and Merrill Lynch & Co.
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