Private banking clients of the Bank of China will mushroom from several hundred to more than 1,000 in the next two years, Huang Jinlao, marketing director of the lender's Personal Banking Department, said in Beijing recently.

 

These clients will have a total 10 billion yuan (US$1.35 billion) of funds that will be managed by the country's second-largest lender, he said.

 

It is the first Chinese-funded bank to provide domestic private banking services since March 28, targeting those with liquid financial assets above US$1 million, after Citibank, Standard Chartered and other leading foreign-funded banks. The Chinese bank aims to capture a bigger share of the country's increasingly large wealth management market.

 

The country ranks No. 5 in terms of households with more than US$1 million in liquid assets, following the United States, Japan, Britain and Germany, according to a recent report released by the Boston Consulting Group.

 

The number of such Chinese households totaled 310,000 by late 2006, up from 124,000 in 2001, and about 48,000 of them have more than US$5 million in liquid assets.

 

Given China's continuous and rapid economic growth, the report predicted the number to double by 2011, reaching 609,000.

 

Meanwhile, the number of wealthy families, those with financial assets worth US$100,000 to US$1 million, or people classified as China's middle class, is also expanding, according to the report.

 

BCG forecast the number of wealthy families in China will rise to 6.4 million by 2011 from 3.25 million now.

 

"It's quite possible that this wealth management market will increase at an annual rate of more than 100 percent, as this market is relatively new in China," said Huang.

 

According to Huang, BOC already had five years' experience in middle and high-end management and had 770,000 well-off clients as well as a team of more than 2,000 wealth managers.

 

"We can collaborate with our strategic partners like the Royal Bank of Scotland and UBS to provide a wide array of customer-tailored personal banking services, including investment consulting, securities, insurance and others," added Huang.

 

He reiterated that the bank's advantages won't be able to be easily copied in a short span of time by its foreign and domestic competitors.

 

"Foreign-funded banks enjoy the advantage of more mature products, better-qualified wealth managers and top trustworthy brands," Ou Minggang, deputy chief editor of the Chinese Banker magazine, said.

 

(Xinhua News Agency November 12, 2007)