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Jumat, 15 Mei 2009

Private Banking is developing fast under International Financial Crisis

In China, the private banking service objects in Chinese funded banks are the customers whose financial assets are above 8 million Yuan (1.17 million USD) or 10 million Yuan (1.46 million USD). According to the conservative estimation, there are at least 500 thousand people whose financial assets are above 1 million USD by the end of the first quarter of 2009 in China, the total financial assets of them exceeding 5 trillion USD.

In order to occupy more shares of the private banking, the banks in China include the private banking in their key development strategy in droves. At present, they set up the private banking branches in domestic large cities so as to open up the high-income group market.

In the battle of attracting more private banking customers, the joint stock banks and foreign funded banks are more popular. When Chinese customers choose the private banks, they are likely to choose the joint stock banks and foreign funded banks. The state owned commercial banks, however, are slightly inferior because of service quality and so on.

By the end of 2008, China Merchants Bank had opened seven private banking centers in Shenzhen, Beijing, Shanghai, Tianjin and Harbin with the customers reaching to 6,398, up by 36% year on year, and the scale of asset management of the private banking customers reaching to 129.9 billion Yuan (18.56 billion USD), up by 34% year on year.

On 1st April 2009, Agricultural Bank of China announced that it would engage in propelling the strategic transformation of the retail business and integrating the retail business. Therefore, it will establish 5 private banks, 15 gold key wealth management centers and 500 gold key money-managing centers. Besides, Agricultural Bank of China will initially set up private banking department in Shanghai and set up the private banking headquarters and divisions in the branch banks in Beijing, Shenzhen, Ningbo and Tianjin etc, where have abundant high-end customer resources, directly extending and maintaining the private banking customers.

On the afternoon of 2nd April, the private banking center of China Citic Bank gathered a group of macro-economic experts and initially set up the macro-economic expert consultant group. China Citic Bank expressed that to establish the macro-economic expert consultant group is to provide the value added services of macro-economic trend analysis, business investment and personal investment analysis for the private banking customers.

There is huge potential for the private banking market in China, but there still exist shortcomings. Chinese private banks are short in establishment time, short of experiences and basically similar in the customer positioning and services and devoid of distinct characteristics.

As far as the foreign funded banks are concerned, their services and experiences are hard to reflect in short time in China because of the serious strikes from the international financial crisis and supervision policy limitation in China’s banking industry.

Apart from the careful advantage and the advantages from the financial crisis, Chinese funded banks also have emotional and policy advantages.

The foreign funded banks are hard to compare with Chinese funded banks in the field of establishing close personal relationship with the customers, owing to the differences in the cultural backgrounds and communications.

In January 2009, Citi Bank, the first bank of setting up the private banking in China, closed its private banking department, which had been set up for about three years. The original customers were all integrated into the retail business department. However, the private banking department of Chartered Bank announced that its private banking customers were two folds by the end of 2008 compared with those in 2007.

Besides, Chinese funded banks have policy advantage, less service limitation compared with the foreign funded banks. Chinese funded banks have internet resource advantage within China, which can cover more cities and provide inter-bank convenient cross region business for the customers.

Under the influences of international financial crisis, the private banks are heavily stricken regardless of the brand or the assets. However, for the private banking in China, it is an opportunity. China has become the comparatively safe place for investment.

It is predicted that the private banking among Chinese local banks and the foreign funded banks will be much fiercer in recent years.


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