China Construction Bank (CCB) announced on Wednesday it will bid for a share of the country's increasingly large and lucrative private banking service industry.
The bank said it is scheduled to open highest-end banking services to people with liquid financial assets above 10 million yuan (1.47 million U.S. dollars) in the country's four most affluent areas, Beijing, Shanghai, Guangdong Province and Shenzhencity.
The CCB would provide services including wealth management, consulting, charitable trustee, tailor-made financing products and so on.
Bank of China is the first Chinese-funded bank to provide such services since March last year targeting those with liquid financial assets above 1 million U.S. dollars, after Citibank, Standard Chartered and other leading foreign-funded banking titans.
The country has the world's fifth largest number of households with more than 1 million U.S. dollars in liquid assets, trailing only the United States, Japan, Britain and Germany, according to a Boston Consulting Group (BCG) report.
The number of such Chinese households rose from 124,000 in 2001to 310,000 by the end of 2006 and is predicted to nearly double by2011, reaching 609,000.
The CCB said it started the private banking service after serious preparations and when the market conditions got mature, as it established its high-end service departments as early as in 2005 to serve well-off clients.
Some experts predicted that the Chinese wealth management market will expand at an annual rate of more than 100 percent, as this market is relatively new in the country.
China Merchants Bank, China CITIC Bank, the Industrial and Commercial Bank of China, the country's largest commercial bank, all had dished out private banking services since last year to capture a share of the most lucrative financial service.
Foreign-funded banks enjoyed the advantage of more mature products, better-qualified wealth managers and top trustworthy brands, according to Dr. Ou Minggang, deputy chief editor of the Chinese Banker magazine.
"However, Chinese-funded banks had a larger group of clients and more outlets compared with their foreign competitors," he added.
(Xinhua News Agency July 17, 2008)
