China's sizzling economy has created millionaires out of many entrepreneurs, and the growing number of nouveau riche has made "private banking" a buzzword in the financial industry.

 

Overseas and domestic banks are accelerating their plans to penetrate the infant but potential market. Bank Sarasin & Co Ltd, a Swiss private bank set up in 1841, is one of the players which are closely watching the development of the Chinese mainland's embryonic private banking market.

 

"Needless to say, China is a very interesting market. The opportunity is there," said Fidelis M. Goetz, head of division international of Bank Sarasin. "I am very positive that sooner or later we will be an active player in the market."

 

Asia is an important element in Bank Sarasin's growth strategy. The Swiss bank has operations in Hong Kong and Singapore. Goetz was in Shanghai over the weekend to witness the Swiss bank signing an agreement with Shanghai Art Museum to be a sponsor for the Shanghai Biennale for a decade.

 

"The sun rises in the east" is frequently quoted in the wealth management industry as the growing opportunities are in Asia, the Middle East and the Eastern Europe.

 

The Chinese mainland was home to 345,000 people with a net worth of at least US$1 million in 2006, up from 320,000 in 2005, according to a report by Capgemini SA and Merrill Lynch & Co.

 

To tap the high net worth individuals, Chinese banks such as Bank of China, China CITIC Bank and China Merchants Bank have set up their private banking business.

 

Although Chinese banks have their advantage like a sprawling network and brand recognition, Goetz noted that China still suffers from a lack of qualified private bankers.

 

"They (Chinese banks) are not there yet but they are learning fast, and they are trying to get their know-how in one way or another," he said.

 

His advice to his "friendly competitors" is not to focus on what competitors do but to listen to what clients want, he said.

 

(Shanghai Daily January 14, 2008)