Top Biz News

Bank looking to manage rich clients' wealth

By Hu Yuanyuan (China Daily)
Updated: 2006-04-01 06:27

China Merchants Bank (CMB), the nation's sixth-largest lender, is in discussions with foreign banks about developing products for richer clients, a top manager at CMB revealed.

"We have talked with several foreign counterparts, such as UBS and Credit Suisse Group," Yuan Danxu, deputy manager of CMB Retail Banking, told China Daily on Friday.

"The deposit threshold for our personalised banking customers is about 2 million yuan (US$247,000) to 5 million yuan (US$617,000). The form of co-operation hasn't been finalized yet."

As foreign banks will be allowed to run RMB retail banking for local citizens from December 1 this year, competition is expected to intensify.

Personalised banking, which is the most lucrative sector in retail banking, has become the main focus of competition.

Citigroup opened its first personalised bank office on Chinese mainland on Tuesday, underlining its commitment to taking a share of the nascent Chinese wealth management market.

According to an industry report, China had US$910 billion assets under management (AUM) for people with a minimum of US$100,000 in 2004.

Of this, US$530 billion was held by households with assets of at least US$1 million.

The report estimated that there are at least 300,000 millionaires in China.

The total amount of AUM in China is expected to grow to US$1.73 trillion by 2009, making China one of the fastest growing markets in the world.

"As foreign banks have a limited network, it is impossible for them to target all customers," said Yuan, "Besides, around 80 per cent of profits are from the very rich."

Yuan acknowledged that the entry of foreign banks would affect local lenders, but local banks' huge customer base gives them an advantage.

"We have been preparing for three years, especially focusing on product innovation and services."

(China Daily 04/01/2006 page5)