With the booming economy, mainland China now has about 320000 “super-rich”, those (defined by Merrill Lynch) who have at least $1 million of financial assets. Among them, 4540 people have a net worth of $30 million, estimated by Merrill. According the same report, the average net worth of the group of wealthy is about $5 million, a number only lags behind Hong Kong in the Asia-Pacific region. Chinese and foreign banks are now chasing this rising class of wealthy for private banking service. CitiGroup Inc.’s Citibank(China) Co. and Bank of China now offer separate programs to cater to China’s upper crust, providing them wealth management service with their own bankers. Citibank(China), with its branches in Shanghai and Beijing, targets clients with a net worth of at least $10 million. BOC’s privating backing threshold is $1 million. Now BOC says it has about 100 to 200 private banking clients.
For now, one of the urgent issue for BOC is the lack of talents and experiences in private banking. BOC is now partnered with Royal Bank of Scotland to get financial planning expertise and management advice. The partnership may become a joint venture once they get regulatory approval, probably in next 12 or 18 months. BOC also views its newly opened wealth management service as a training ground for its private bankers.